If you're named the executor in a will, it is your job to guide that estate through probate, a legal process to distribute the assets. Many people avoid probate by putting assets in a trust, but the duties of an executor and a trustee are similar -- to see that the assets are passed to the designated heirs. If there is no will or the will does not name an executor, a court will appoint one.
The difficulty of an executor's job varies with the size and complexity of the estate. An executor may have to spend several weeks identifying, locating and evaluating the assets of the estate. All states have some provision to compensate an executor for that work, subject to approval of the probate court.
State laws regulate executor compensation, and a probate court specifically oversees it. A 2 percent fee is standard under the Uniform Probate Code adopted by all states, but wills can specify an amount. Some states, such as New York and Pennsylvania, allow fees up to 5 percent of the estate value. Some states have sliding scales that vary with the size of the estate.
A family member serving as an executor who also is a beneficiary of the estate usually is not compensated because he shares in the proceeds under the will. A sole beneficiary of an estate, for instance, would usually not need or receive compensation. Any fees paid to an individual executor are subject to income tax.
An executor can be a company. Some wills name a trust company as executor. A person designated as an executor in a will can hire a trust company to oversee the details. That company is paid, typically up to 5 percent of the value of the estate. Any legitimate expense, such as travel costs or appraisal fees, is added to the compensation.
Some lawyers and estate handlers use a sliding scale for executor fees and some state laws provide for varying fees. A small estate, for instance, may be charged 5 percent of asset value, while a large estate might be assessed only 1 percent. Any brokerage commissions for sale of real estate, securities or other assets are charged separately against the estate.
- New York City Bar: What is an Executor?
- Fromhold Jaffe & Adams: Executors Fees in Pennsylvania
- Find Law: State Laws: Estates & Probate
- Edmond Financial Group: Your Executor
- Richard A. Whitney Law Offices: Guidelines for Executors
- Unruh, Turner, Burke & Frees: How Much Can Executors Be Paid Under Pennsylvania Law?
- After Bankruptcy, Can a Company Report You as a Charge-Off to the Credit Bureau
- How to Repair Credit Damage Due to Cosigning
- Difference Between Incurred Expenses & Paid Expenses
- The Average Cost of Chapter 7
- Is the Bank Obligated to Refund Stolen Money From My Debit Card?
- Can a Judge Make Me Pay a Credit Card Debt?
- Do Creditors Work with People Who Got Laid Off?
- What to Do If You Pay for Your Furniture & It Came Broken?
- Four Types of Charge Accounts
- High-Paying Jobs That Involve Little Interaction with People