Executor Fees: Definition, Calculation Methods, and Executor Fees by State

Executor fees are payments given to individuals appointed to manage and settle an estate after someone passes away. These fees serve as compensation for the executor’s time, effort, and responsibilities involved in handling the legal and financial aspects of estate administration. The amount an executor receives can vary depending on the state, the complexity of the estate, and the executor’s specific duties. This article explains what executor fees are, how they are calculated, and the rates by state, offering a comprehensive guide for those appointed as executors or for beneficiaries curious about the costs involved.

What Are Executor Fees?
Executor fees are the monetary compensation provided to an individual who is responsible for managing and settling a deceased person’s estate. The executor, also known as a personal representative, is tasked with duties such as gathering and valuing assets, paying debts and taxes, and distributing the remaining estate to beneficiaries according to the will or state law if there is no will. Executor fees serve as payment for the time, effort, and legal obligations undertaken throughout the probate process.

The fees can vary based on the size and complexity of the estate, as well as the laws of the state where probate is taking place. Some states have statutory guidelines that specify a percentage of the estate value as the fee, while others allow for “reasonable compensation,” which may be determined by the court.

Why Does an Executor Get Paid?

Executors are paid because they are responsible for managing the complex and time-consuming tasks involved in settling an estate. These tasks include filing legal documents, paying debts and taxes, distributing assets to beneficiaries, and handling potential disputes. Executors are compensated for their effort, expertise, and the significant responsibilities they undertake, ensuring the estate is properly managed according to the law and the deceased’s wishes.

When Does the Executor of a Will Get Paid?

An executor of a will gets paid when the estate administration process is nearing completion. This happens after the executor has fulfilled their duties, such as paying off debts, taxes, and other estate obligations and distributing the remaining assets to the beneficiaries. Executor fees are typically paid from the estate’s funds and require court approval before disbursement. Once the final accounting is submitted and approved by the court, the executor is compensated.

How Much Does an Executor Get Paid?

An executor typically gets paid based on the value of the estate they are managing, with fees varying by state. The compensation is often a percentage of the estate’s total value, and in many states, the percentage decreases as the estate value increases. For example, executors may receive 5% compensation for the first $100,000 of the estate, and 4% for the next $200,000, and the percentage continues to diminish as the estate’s value grows larger. Some states have statutory guidelines outlining specific fee structures, while others allow for “reasonable compensation,” which is determined by the complexity of the estate and the court’s discretion.

For example, in California, executors are paid according to a statutory fee schedule that follows this diminishing rate model, whereas in states like New York, the courts often determine what constitutes “reasonable” compensation. Therefore, the exact amount an executor receives can vary depending on both the state laws and the size of the estate.

What Is the Most An Executor Can Charge?

An executor is entitled to charge fees that are typically based on a percentage of the estate’s value, but the exact amount they can charge varies by state and is subject to court approval. For example, many states use a tiered percentage system that diminishes as the estate’s value increases.

In a state like California, the maximum executor fee is calculated as follows:

1. 5% of the first $100,000 of the estate’s value
2. 4% of the next $100,000
3. 3% of the next $800,000
4. 2% of the next $9 million
5. 1% of the next $15 million

For example, if the estate is valued at $500,000, the executor would receive:

1. 5% of the first $100,000 = $5,000
2. 4% of the next $100,000 = $4,000
3. 3% of the next $300,000 = $9,000

Total compensation would be $18,000.

The most an executor can charge depends on the size of the estate and the state’s laws. Some states have no statutory limits and only require “reasonable” fees, which may increase if the estate is particularly complex. However, the court has final approval over these fees, ensuring they are fair based on the executor’s responsibilities.

Does Executor Get Paid Before Beneficiaries?

Yes, an executor gets paid before the beneficiaries. The executor’s fees are considered part of the administrative expenses of the estate, which must be settled before the distribution of assets to the beneficiaries. The executor is compensated from the estate’s funds after paying debts, taxes, and other liabilities, but before any remaining assets are distributed to the heirs or beneficiaries. This ensures that the executor is reimbursed for their time and effort in managing the estate.

How Long Does the Executor Have to Pay the Beneficiaries?

An executor should pay beneficiaries within six to twelve months after the probate process begins. This timeframe allows the executor to complete necessary tasks such as gathering assets, paying debts and taxes, and obtaining court approval for final distributions. The reason for this duration is that settling an estate can be complex, requiring time to ensure all legal obligations are met. Delaying payments longer than this period may lead to disputes, as beneficiaries expect timely distribution after estate matters have been resolved.

How to Calculate Executor Fees

In order to calculate executor fees, you typically use a percentage-based system that is determined by the value of the estate. This fee structure varies by state, but many states follow a similar tiered model where the percentage decreases as the value of the estate increases. Here’s an example calculation:

For an estate valued at $600,000, using the following tiered system:

1. 5% of the first $100,000
2. 4% of the next $200,000
3. 3% of the remaining $300,000

Step-by-step calculation:

1. 5% of $100,000 = $5,000
2. 4% of $200,000 = $8,000
3. 3% of $300,000 = $9,000

Total executor fees:

$5,000 + $8,000 + $9,000 = $22,000

In this example, the executor would receive $22,000 for managing an estate worth $600,000. The calculation method varies by state, and some states allow for “reasonable” fees, which may be determined by the court depending on the estate’s complexity.

How Much an Executor Gets Paid if a Valid Will Specifies Compensation

When there is a valid will that specifies compensation, the executor is entitled to receive the amount stated in the will. The testator (the person who created the will) may outline a specific fee or percentage of the estate as the executor’s compensation. This specified amount takes precedence over state statutory guidelines, as long as it is not unreasonable or in violation of state law. If the court finds the compensation to be fair and within legal bounds, the executor will be paid according to the terms outlined in the will, regardless of the estate’s value or state laws governing executor fees.

How Much an Executor Gets Paid if There Is No Specified Compensation

When there is no valid will that specifies compensation, the executor is entitled to receive fees based on the laws of the state where the probate process occurs. Most states have statutory guidelines that outline how much an executor can be paid, usually calculated as a percentage of the estate’s total value. For example, an executor may receive 5% for the first $100,000, 4% for the next $200,000, and so on, with the percentage decreasing as the estate value increases. If state law does not specify an exact amount, the court may award “reasonable compensation” based on the complexity of the estate and the time and effort the executor has invested.

How Much an Executor Gets Paid if There’s More Than One

If there are more than one executor, each is entitled to a portion of the total compensation, which is typically divided among them based on the responsibilities they share. The total executor fee remains the same as it would for a single executor, and the court or the will (if specified) will determine how the fee is split. In most cases, co-executors either agree on how to divide the compensation or receive equal shares unless one has performed significantly more duties than the other. The exact distribution depends on the complexity of the tasks and the court’s or will’s instructions.

How Much an Executor Gets Paid if the Executor Is an Institution

If the executor is an institution, such as a bank or a trust company, the institution is entitled to charge fees according to its standard fee schedule for estate administration. These fees are typically higher than those charged by individual executors and may include both a base fee and a percentage of the estate’s value. For example, institutions may charge an annual management fee plus a percentage ranging from 1% to 5% of the estate, depending on the estate’s size and complexity. Institutional fees are often outlined in the service agreement between the institution and the estate or its beneficiaries, and they must still be approved by the court.

How Much an Executor Gets Paid if They’re Also the Attorney for the Estate

When there is an attorney for the estate, the executor is entitled to receive compensation for both roles, but this is subject to court approval and state regulations. The executor may be paid a separate fee for their duties as executor and an additional fee for legal services rendered to the estate. However, in some states, laws require that the fees for serving in both roles must be reasonable and cannot be excessively duplicative. In such cases, the court may reduce the total compensation to avoid overpayment, ensuring that the executor-attorney does not receive excessive fees for overlapping services.

How Much Does an Administrator of an Estate Get Paid?

An administrator of an estate, who is appointed when there is no will or when no executor is named in the will, gets paid similarly to an executor. The compensation is typically determined based on the value of the estate and follows the same tiered percentage system used for executor fees. For example, an administrator may receive 5% of the first $100,000, 4% of the next $200,000, and so on, with the percentage diminishing as the estate’s value increases.

The criteria used to determine the administrator’s fee are usually set by state laws, which often specify statutory guidelines based on the estate’s size. In states that do not have specific guidelines, the court will determine “reasonable compensation” based on the time, effort, and complexity of the administrator’s duties, similar to how executor fees are assessed. The court ensures that the administrator’s fee is fair, given the responsibilities involved in managing and settling the estate.

Can an Executor Get Reimbursed for Expenses?

Yes, an executor can get reimbursed for expenses. The executor is entitled to recover any out-of-pocket expenses incurred while administering the estate. These expenses may include court filing fees, postage, travel costs, professional services (such as appraisals or legal advice), and other necessary costs directly related to the management of the estate. The executor must keep accurate records and receipts for all expenses and typically submit them to the court for approval before reimbursement is granted from the estate’s funds.

Can an Executor Reject Compensation?

Yes, an executor can reject compensation. The executor has the right to waive their fees if they choose to, which often happens when the executor is a family member or close friend of the deceased and does not wish to accept payment for their services. By rejecting compensation, the executor may avoid potential tax implications, as executor fees are considered taxable income. If the executor decides to forgo compensation, this decision must be formally documented to ensure the court and other beneficiaries are aware of the choice.

Does the Executor Pay the Inheritance Tax in PA?

Yes, the executor is responsible for paying the inheritance tax in Pennsylvania. The executor must ensure that the tax is calculated and paid from the estate’s assets before distributing the remaining assets to the beneficiaries. Pennsylvania requires that inheritance tax be paid within nine months of the decedent’s death, and the executor is tasked with filing the appropriate tax forms and making the payment to the Pennsylvania Department of Revenue. If the tax is not paid on time, penalties and interest may accrue, which the executor must also manage on behalf of the estate.

Do Executor Fees Get Reported to the IRS?

Yes, executor fees must be reported to the IRS. The compensation an executor receives is considered taxable income and must be included on the executor’s personal tax return. This applies to any executor, whether they are a family member, friend, or professional. The executor will need to report the fees on their income tax return, typically under “other income,” and may be issued a Form 1099 from the estate if the fees exceed a certain threshold. Executors should be aware that while the fees are taxable, any reimbursements for expenses are not, as long as they are directly related to estate administration.

Executor Fees by State

Executor fees vary significantly depending on the state where probate is being administered. Each state has its own statutory guidelines or court-determined allowances for calculating executor compensation, which can be based on a percentage of the estate’s value or deemed “reasonable” based on the complexity of the estate.

Executor Fees in California

In California, executors are entitled to compensation based on a fixed percentage of the estate’s value, as outlined in the state’s statutory fee schedule. The calculation is as follows:

1. 4% of the first $100,000 of the estate’s value
2. 3% of the next $100,000
3. 2% of the next $800,000
4. 1% of the next $9 million
5. 0.5% of the next $15 million

For example, if the estate is valued at $500,000, the executor would receive $13,000 in fees based on this tiered percentage structure. California does not typically allow for hourly rates unless approved by the court in exceptional circumstances.

Executor Fees in New York

In New York, executors are entitled to compensation based on a percentage of the estate’s value. The calculation is as follows:

1. 5% of the first $100,000
2. 4% of the next $200,000
3. 3% of the next $700,000
4. 2.5% of the next $4 million
5. 2% of any amount over $5 million

For example, if the estate is valued at $1 million, the executor would receive:

1. 5% of the first $100,000 = $5,000
2. 4% of the next $200,000 = $8,000
3. 3% of the next $700,000 = $21,000

Total compensation: $34,000. In New York, executors are generally paid based on this percentage formula, rather than an hourly rate.

Executor Fees in New Jersey

In New Jersey, executors are typically entitled to a percentage of the estate’s value. The standard calculation for executor fees is:

1. 6% of all income the estate generates
2. 5% of the first $200,000 of the gross estate value
3. 3.5% of the value exceeding $200,000

For estates valued over $5 million, the court may reduce the percentage to a reasonable rate. For example, if the estate is valued at $400,000, the executor would receive:

1. 5% of the first $200,000 = $10,000
2. 3.5% of the next $200,000 = $7,000

Total compensation: $17,000. Executors in New Jersey typically receive a percentage of the estate rather than an hourly rate, unless otherwise specified by the court.

Executor Fees in Massachusetts

In Massachusetts, executors are entitled to “reasonable compensation” rather than a fixed rate or set percentage. The calculation of executor fees depends on the complexity of the estate and the duties involved. While there is no specific statutory percentage, the fees are generally aligned with standard practices in probate courts, often ranging between 2% and 5% of the estate’s value.

Example Calculation:

For an estate valued at $500,000, if the court deems a 3% fee as reasonable, the executor would receive:

1. 3% of $500,000 = $15,000

Alternatively, if the executor charges an hourly rate, they must keep detailed records of the time spent on estate administration. For example, if the executor spends 100 hours at a rate of $100 per hour, the fee would be:

1. 100 hours × $100 = $10,000

The court reviews the complexity and scope of work to ensure that the compensation is fair and reasonable based on the estate’s circumstances.

Executor Fees in Florida

In Florida, executors (referred to as personal representatives) are entitled to compensation based on a percentage of the estate’s value, as outlined in the Florida statutory fee schedule. The fees are calculated as follows:

1. 3% of the first $1 million of the estate’s value
2. 2.5% of the next $4 million
3. 2% of the next $5 million

For estates larger than $10 million, the court may award an additional reasonable fee based on the complexity of the work.

Example Calculation:

For an estate valued at $1.5 million, the executor would receive:

1. 3% of the first $1 million = $30,000
2. 2.5% of the next $500,000 = $12,500

Total compensation: $42,500.

Executors in Florida may also be entitled to additional compensation if the estate administration involves extraordinary services, such as handling litigation or managing complex assets. These additional fees would need court approval. Hourly rates are generally not used unless specifically requested and approved by the court.

Executor Fees in Georgia

In Georgia, executors are entitled to compensation based on a percentage of the estate’s value, as outlined by state law. The standard executor fee structure is as follows:

1. 2.5% of all money received by the executor on behalf of the estate
2. 2.5% of all money paid out by the executor from the estate

Additionally, Georgia law allows the executor to receive 10% of any interest earned on the estate’s money, as well as a reasonable fee for managing real estate, if applicable.

Example Calculation:

For an estate where the executor receives $500,000 and pays out $400,000, the calculation would be:

1. 2.5% of $500,000 received = $12,500
2. 2.5% of $400,000 paid out = $10,000

Total compensation: $22,500.

If the estate earns $10,000 in interest, the executor would also be entitled to 10% of that, or $1,000, bringing the total to $23,500. In some cases, if the estate is complex, the court may allow additional fees, but these must be approved.

Executor Fees in Ohio

In Ohio, executors are entitled to compensation based on a percentage of the estate’s assets, as specified by state law. The fee structure is typically calculated as follows:

1. 4% of the first $100,000 of personal property and income received
2. 3% of the next $300,000
3. 2% of the remaining estate value above $400,000
4. 1% of the value of real estate that is not sold but distributed to beneficiaries

Example Calculation:

For an estate valued at $600,000, the executor’s fee would be calculated as:

1. 4% of the first $100,000 = $4,000
2. 3% of the next $300,000 = $9,000
3. 2% of the remaining $200,000 = $4,000

Total compensation: $17,000.

Ohio executors may receive additional compensation if the court finds that extraordinary services were performed, but this must be approved. Hourly rates are generally not used unless there are specific circumstances that justify it and the court approves such an arrangement.

Executor Fees in Illinois

In Illinois, there is no statutory percentage or fixed rate for executor fees. Instead, executors are entitled to “reasonable compensation” based on the work they perform in administering the estate. This compensation is determined by factors such as the complexity of the estate, the amount of time spent on duties, and the executor’s responsibilities.

The executor may either request an hourly rate or a percentage of the estate’s value, depending on the circumstances and the court’s approval. In practice, fees in Illinois often range between 2% and 5% of the estate’s total value, though this can vary.

Example Calculation:

If an estate is valued at $500,000 and the executor requests a fee of 3%, they would receive:

1. 3% of $500,000 = $15,000

Alternatively, if the executor charges an hourly rate, they must document the time spent on estate administration. For example, if the executor spends 120 hours and charges $100 per hour, the compensation would be:

1. 120 hours × $100 = $12,000

The final amount must be approved by the court to ensure that it is reasonable based on the executor’s duties.

Executor Fees in Virginia

In Virginia, executors are entitled to “reasonable compensation,” which is determined by the court based on the complexity of the estate and the responsibilities involved. While there is no statutory fixed rate or set percentage, the Virginia probate courts often follow general guidelines that suggest an executor’s fee be around 5% of the estate’s value. This percentage can vary depending on the size of the estate and the work required.

Example Calculation:

For an estate valued at $400,000, if the court approves a 5% fee, the executor would receive:

1. 5% of $400,000 = $20,000

If the estate is more complex or involves extraordinary services, the executor may petition for additional compensation, which the court must approve. In some cases, if the executor prefers, they can request an hourly rate, but this too must be approved by the court based on the nature of the work performed.

Executor Fees in Pennsylvania

In Pennsylvania, executors are entitled to “reasonable compensation” for their services, but the state does not provide a fixed rate or statutory percentage. Instead, Pennsylvania probate courts follow general guidelines, often based on a percentage of the estate’s value, which can range between 3% to 5%. The exact amount is determined by the court, taking into account the complexity of the estate, the time and effort required, and the executor’s responsibilities.

Example Calculation:

For an estate valued at $500,000, if the court deems a 4% fee reasonable, the executor would receive:

1. 4% of $500,000 = $20,000

Courts in Pennsylvania may adjust this percentage depending on the size of the estate and whether the executor had to perform extraordinary tasks. Executors are typically not paid by an hourly rate unless otherwise arranged or approved by the court.

Executor Fees in New Jersey

In New Jersey, executors are entitled to compensation based on a percentage of the estate’s value, as outlined in state law. The standard fee structure for executor compensation in New Jersey is:

1. 6% of all income the estate generates
2. 5% of the first $200,000 of the estate’s value
3. 3.5% of the value above $200,000

For estates valued over $5 million, the court may adjust the percentage to ensure the fee remains reasonable.

Example Calculation:

For an estate valued at $600,000, the executor’s compensation would be calculated as:

1. 5% of the first $200,000 = $10,000
2. 3.5% of the remaining $400,000 = $14,000

Total compensation: $24,000.

If the estate generates income, the executor is also entitled to 6% of that income. Executor fees in New Jersey are generally calculated based on this percentage system, and hourly rates are uncommon unless specifically approved by the court for extraordinary services.