GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2005
SESSION LAW 2005-388
HOUSE BILL 561
AN ACT relating to commissions allowed to personal representatives.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 28A-23-3 reads as rewritten:
"§ 28A-23-3. Commissions allowed personal representatives; representatives guilty of misconduct or default.
(a) Personal
representatives, collectors or public administrators shall be entitled to
commissions to be fixed in the discretion of the clerk of superior court not to
exceed five percent (5%) upon the amounts of receipts, including the value of
all personal property when received, and upon the expenditures made in
accordance with law, which law. In determining the maximum
commissions allowable under this subsection, the clerk of superior court may
take into consideration fees paid by the estate for professional services
performed in the ordinary course of administering the estate, including
services performed by attorneys and accountants. However, the clerk is not
required to reduce the maximum commissions allowed by the aggregate fees paid
to professionals on a dollar-for-dollar basis.
The commissions shall be charged as a part of the
costs of administration and, upon allowance, may be retained out of the assets
of the estate against creditors and all other persons claiming an interest in
the estate. Provided, however, when If the gross value of an
estate is two thousand dollars ($2,000) or less, the clerk of superior court is
authorized and empowered to may fix the commission to be received by
the personal representative, collector or public administrator in an amount as
he, the clerk of superior court, in his the clerk's
discretion, deems just and adequate.
(b) In determining the
amount of such the commissions, both upon personal property
received and upon expenditures made, the clerk of superior court shall consider
the time, responsibility, trouble and skill involved in the management of the
estate. Where real property is sold to pay debts or legacies, the commission
shall be computed only on the proceeds actually applied in the payment of debts
or legacies.
(c) The clerk of superior court may allow commissions from time to time during the course of the administration, but the total commissions allowed shall be determined on final settlement of the estate and shall not exceed the limit fixed in this section.
(d) Nothing in this
section shall be construed:construed to:
(1) To prevent Prevent
the clerk of the superior court from allowing reasonable sums for necessary
charges and disbursements incurred in the management of the estate; orestate.
(2) To allow Allow
commissions on distribution of the shares of heirs or on distribution of
shares of devisees; ordevisees.
(3) To abridge Abridge
the right of any party interested in the administration of a decedent's
estate to appeal an order of the clerk of superior court to a judge of superior
court.
(e) No personal
representative, collector or public administrator, who has been guilty of such
default or misconduct in the due execution of his or her office
resulting in the revocation of his or her appointment of the personal
representative, collector, or public administrator under the provisions of
G.S. 28A-9-1, shall be entitled to any commission under the provisions of
this section.
(f) For the purpose
of computing commissions whenever any portion of the dividends, interest, rents
or other amounts payable to a personal representative, collector or public administrator
is required by any law of the United States or other governmental unit to be
withheld for income tax purposes by the person, corporation, organization or
governmental unit paying the same, the amount so withheld shall be
deemed to have been received and expended.
(g) Subsection (a) of this section does not apply if the testator's will specifies a stipulated amount or method or standard for determining the compensation for the services rendered by the personal representative, including a provision in the will that the compensation of the personal representative is to be determined by applying the personal representative's regularly adopted schedule of compensation in effect at the time of performance of those services. Subsection (a) of this section also shall not apply if the testator's will provides that the personal representative is to receive "reasonable compensation" for those services or similar language to that effect if the personal representative and the beneficiaries whose shares would be charged with the payment of the personal representative's compensation consent in writing to the specific amount that constitutes reasonable compensation.
(h) Subsection (a) of this section shall apply if the testator's will provides that compensation of the personal representative shall be the amount "as provided by law," the "maximum amount provided by law," or other similar language."
SECTION 2. G.S. 28A-19-6, as amended by S.L. 2005-180, reads as rewritten:
"§ 28A-19-6. Order of payment of claims.
(a) After payment of costs and expenses of administration, the claims against the estate of a decedent must be paid in the following order:
First class. Claims which by law have a specific lien on property to an amount not exceeding the value of such property.
Second class. Funeral expenses to the extent of two thousand five hundred dollars ($2,500). This limitation shall not include cemetery lot or gravestone. The preferential limitation herein granted shall be construed to be only a limit with respect to preference of payment and shall not be construed to be a limitation on reasonable funeral expenses which may be incurred; nor shall the preferential limitation of payment in the amount of two thousand five hundred dollars ($2,500) be diminished by any Veterans Administration, social security or other federal governmental benefits awarded to the estate of the decedent or to his or her beneficiaries.
Third class. All dues, taxes, and other claims with preference under the laws of the United States.
Fourth class. All dues, taxes, and other claims with preference under the laws of the State of North Carolina and its subdivisions.
Fifth class. Judgments of any court of competent jurisdiction within the State, docketed and in force, to the extent to which they are a lien on the property of the decedent at his death.
Sixth class. Wages due to any employee employed by the decedent, which claim for wages shall not extend to a period of more than 12 months next preceding the death; or if such employee was employed for the year current at the decease, then from the time of such employment; for medical services within the 12 months preceding the decease; for drugs and all other medical supplies necessary for the treatment of such decedent during the last illness of such decedent, said period of last illness not to exceed 12 months.
Seventh class. A claim for equitable distributions.
Eighth class. All other claims.
(b) Notwithstanding subsection (a) of this section, if payment of the commissions of the personal representative under G.S. 28A-23-3(g) would cause the estate to be unable to pay all claims against the estate of a decedent, then the commissions shall be limited to the amount allowed under G.S. 28A-23-3(a)."
SECTION 3. This act becomes effective January 1, 2006, and applies to commissions paid on or after that date.
In the General Assembly read three times and ratified this the 23rd day of August, 2005.
s/ Beverly E. Perdue
President of the Senate
s/ James B. Black
Speaker of the House of Representatives
s/ Michael F. Easley
Governor
Approved 3:29 p.m. this 13th day of September, 2005