How is an administrator’s commission calculated, and what paperwork should show how they arrived at the commission amount? – North Carolina

Short Answer

In North Carolina, an administrator (personal representative) generally may receive a commission that the Clerk of Superior Court approves, up to a statutory maximum that is commonly calculated as a percentage of certain “commissionable” estate receipts and disbursements. The commission is not automatic at a specific rate; the Clerk sets the amount within the legal limits based on what was handled and what work was required. The paperwork that should show how the commission was calculated is the estate accounting (annual and/or final) plus a petition and order approving commissions that itemize the commissionable totals and the percentage applied.

Understanding the Problem

In a North Carolina estate administration, can an administrator take a commission, how is that commission calculated, and what probate paperwork should show the math used to reach the commission amount? This question usually comes up when an estate settlement is being negotiated and the commission affects how much each heir receives, especially when the estate includes real property and the parties disagree about values used in the settlement.

Apply the Law

North Carolina treats an administrator’s “commission” as compensation for serving as the personal representative. The commission is typically based on a percentage of the estate’s commissionable receipts and disbursements, subject to a statutory cap, and it must be allowed by the Clerk of Superior Court (the probate judge in most estate matters). The commission amount should be supported by the estate’s filed inventory and accountings and is usually approved by a specific commission order (or through approval of an accounting that clearly shows the commission calculation).

Key Requirements

Clerk approval: The commission should be allowed by the Clerk of Superior Court in the estate file; it is not simply “taken” without court approval.
Commissionable base: The calculation depends on what counts as commissionable receipts and disbursements shown in the estate accounting (not every number discussed in a private settlement is necessarily part of the commission base).
Within the statutory limits and any will terms: The commission must stay within the statutory framework, and a will can limit compensation or set a different approach that the Clerk applies.

What the Statutes Say

N.C. Gen. Stat. Chapter 28A (Administration of Decedents’ Estates) – North Carolina’s main probate administration chapter; it includes the rules the Clerk uses to allow personal representative compensation and to require inventories and accountings.

Analysis

Apply the Rule to the Facts: Here, the estate settlement discussions involve a buyout/loan tied to a deceased parent’s interest in real property, and the proposal uses the county tax-assessed value rather than an estimated market value. Whether that valuation choice affects the administrator’s commission depends on what transactions actually occurred in the estate (for example, whether the personal representative received and disbursed sale proceeds, collected rents, paid liens, or otherwise handled cash flows that show up as receipts/disbursements in the probate accounting). The commission should be traceable to the estate file through the accounting totals and the Clerk-approved commission paperwork, not just a number inserted into a private settlement spreadsheet.

Process & Timing

Who files: The administrator/personal representative. Where: The Clerk of Superior Court (Estates Division) in the county where the estate is administered in North Carolina. What: A petition/request for payment of personal representative commissions and a proposed order, along with supporting accounting detail showing the commissionable receipts and disbursements. When: Often during administration (sometimes around an annual accounting) or at the end with the final account; local practice varies by county.
How the amount is shown: The estate’s annual and/or final account should list receipts and disbursements in categories and totals. The commission request typically ties the requested percentage to those totals so the Clerk can audit the math.
How it becomes official: The Clerk signs an order allowing commissions (or approves an accounting that clearly reflects the commission). The signed order/accounting becomes the best “paper trail” showing how the commission amount was reached.

Exceptions & Pitfalls

Will terms can change the analysis: A will may limit compensation or describe compensation differently, and the Clerk generally applies those terms when they are valid.
Not everything is “commissionable” in the way families assume: A private settlement number based on a tax value or a market estimate may not match the commission base used in the probate accounting. The commission is usually tied to what the personal representative actually received and paid out through the estate administration.
Multiple personal representatives: If more than one person served at different times, the total commissions allowed across all personal representatives generally must still fit within the legal limits, and the Clerk may apportion commissions based on services performed.
Misconduct/waiver issues: A personal representative can waive commissions, and serious misconduct can affect entitlement to commissions. The estate file should reflect any waiver and any order affecting compensation.
Paperwork gaps: A common problem is a commission number that appears in a settlement proposal without a matching petition/order or without accounting schedules that show the receipts/disbursements used for the calculation.

For more detail on what should appear in the estate file, see the probate inventory and accounting and how a personal representative commission is approved.

Conclusion

In North Carolina, an administrator’s commission is typically calculated as a Clerk-approved percentage applied to commissionable receipts and disbursements shown in the estate accounting, subject to statutory limits and any controlling will terms. The commission amount should be supported by the filed annual/final account and should be reflected in a petition and Clerk’s order (or an approved accounting) that shows the commissionable totals and the percentage used. The next step is to obtain the estate’s filed accountings and the Clerk’s signed commission order from the estate file and compare the commission math to the accounting totals.

Talk to a Probate Attorney

If you’re dealing with a disputed administrator commission during an estate settlement involving real property values, our firm has experienced attorneys who can help explain what North Carolina probate filings should show and what questions to raise with the accounting and commission request. Call us today at (919) 341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.