One of the most common questions about serving as the executor of a will is whether an executor gets paid for administering a decedent's estate—and the logical follow-up to that question is, “If so, how much?"
The simple answer is that, either through specific will provisions or applicable state law, an executor is usually entitled to receive compensation. The amount varies depending on the situation, but the executor is always paid out of the probate estate.
Typical executor fees are meant to compensate for the time and energy involved in finalizing someone else's affairs, and depending on state law, they can be calculated as a percentage of the estate, a flat fee, or an hourly rate.
How is executor compensation calculated?
Executor compensation is determined by either the will itself or state law. Some states allow a last will and testament to specify how an executor should be compensated. This may be a flat fee stated in the document, or the will may specifically defer to state law.
If no will or no provision addresses the executor's fee in a valid will, state law governs how an executor will be paid.
Determining executor fees by state
Each state has its own laws concerning executor fees. Washington state, for example, provides that executors are entitled to “reasonable" compensation. In determining what is reasonable, a court may consider factors such as the complexity of the estate, the issues involved, and the time the executor spent performing their duties. Other states have their own standards and guidelines for determining reasonable compensation.
California has one of the most detailed statutory schemes. Under California law, executor fees are calculated as follows:
- 4% of the first $100,000 of the estate
- 3% of the next $100,000
- 2% of the next $800,000
- 1% of the next $9 million
- 0.5% of the next $15 million
- A “reasonable amount” for estates above $25 million
In states that mandate a specific percentage of the estate, executors may also collect an “extraordinary” fee if their duties go beyond the usual administration of an estate, such as handling litigation or tax disputes.
Keep in mind that some states allow executors to collect fees both for receiving assets into the estate and for paying them out, which can effectively double a percentage-based calculation. Consult with the probate attorney handling the estate to confirm the calculation method that applies in your jurisdiction.
Texas takes an approach that falls somewhere in between. Under normal circumstances, executor fees are set at five percent of the amounts paid out of the estate, but may not exceed five percent of the total fair market value of the estate. However, if the calculated amount is unreasonably low or the executor manages a business for the estate, the probate court may adjust the fees.
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What expenses can executors be reimbursed for?
An executor is also usually entitled to be reimbursed for any out-of-pocket expenses incurred during estate administration. These reimbursements are separate from executor fees and, unlike compensation, are not considered taxable income.
Common reimbursable expenses include:
- Court filing fees and legal document costs
- Certified copies of death certificates
- Postage, mailing, and shipping costs
- Travel expenses for estate-related business
- Property maintenance, utilities, and insurance premiums
- Professional appraisal fees for estate assets
- Estate attorney and accountant fees
Some expenses may be paid directly from estate accounts, while others—particularly those arising before the estate is opened for probate, such as utility or medical bills—may require the executor to pay upfront and seek reimbursement later. Keeping detailed records and receipts for all expenses is essential, as the probate court may require documentation before approving reimbursements.
Does the executor get paid before the beneficiaries?
Yes, executor fees are typically paid before beneficiaries receive their inheritances. This is because executor compensation is considered an administrative expense of the estate, similar to court costs, attorney fees, and accountant fees.
The general order of estate payments follows a specific priority. First, the estate pays funeral and burial expenses. Next come the costs of administering the estate, which include executor fees. The estate then settles any outstanding debts and taxes owed by the decedent. Only after all of these obligations are satisfied does the remaining estate pass to the beneficiaries.
This payment priority doesn't mean executors take money away from beneficiaries. Rather, the executor fee is a legitimate expense that compensates for the substantial time and effort required to settle the estate properly. Beneficiaries cannot receive their inheritance until all administrative tasks are complete, which is typically when executor fees are finalized and paid. In most cases, executors request their fee as part of the final accounting submitted to the probate court before closing the estate.
What are the benefits of being an executor?
Serving as an executor comes with both financial and non-financial benefits, which are as follows:
- Compensation for your work. Executors typically have a statutory right to receive payment for their time and effort, along with reimbursement for reasonable out-of-pocket expenses incurred during estate administration.
- Ensuring the decedent’s wishes are honored. You have direct oversight of how assets are managed, protected, and ultimately distributed, helping ensure the estate is handled according to the will.
- Transparency for family members. If you are a family member, serving as executor can provide peace of mind and clarity about how the estate is being administered.
- Control over the administration process. While you must act in the estate’s best interest, you generally have discretion over decisions such as when to sell property, how to manage specific assets, and how to coordinate distributions with beneficiaries.
That said, serving as executor is a significant responsibility. The role requires substantial time, attention to detail, and the ability to navigate complex legal and financial matters. Executors can face personal liability for mismanaging estate assets, and family dynamics sometimes create conflicts during the probate process. Many executors find the experience rewarding despite these challenges, particularly when they're able to honor a loved one's legacy, which is why some choose to serve even when waiving their fee.
FAQs on charges of a will executor
Are executor fees taxable income?
Yes, executor fees are considered taxable income for both state and federal tax purposes. This is one reason why some executors, particularly those who are also beneficiaries, choose to waive their fee—because inheritances are generally not taxable, while executor compensation is taxed as ordinary income.
Should I waive my executor fee if I'm also a beneficiary?
Often, yes. Since executor fees are taxed as income while inheritances are generally tax-free, waiving the fee may make financial sense. Consult a tax advisor or estate planning attorney to determine what's best for your situation.
Can the executor decide who gets what?
No, an executor cannot arbitrarily decide how assets are distributed. Executors are fiduciaries, meaning they are legally bound to follow the instructions in the will and act in the best interest of the estate and its beneficiaries. Their role is administrative, meaning they gather assets, pay debts and taxes, and distribute what remains according to the decedent's wishes.
This is a common misconception. While executors temporarily manage and control estate assets during probate, they do not own those assets or have discretion over who receives them. The only exception is when a will specifically grants the executor discretionary powers over certain distributions, which is relatively rare.
If an executor deviates from the will's instructions or misappropriates estate assets, they can be held personally liable and removed from their position by the probate court. Beneficiaries who believe an executor is acting improperly have the right to petition the court for an accounting or to challenge the executor's actions.
While the above gives a general overview of executor fees, you may find it beneficial to consult with an estate planning attorney who is knowledgeable about your state's laws as you navigate the probate system.
Michelle Kaminsky, Esq., contributed to this article.