Many states allow the executor of an estate to receive compensation for his work on the estate. The monetary percentage the executor of a will receives in these states depends on the law of each particular state. Some states use a percentage amount set by law, while others allow the probate court to set the rate.
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Fee Schedule States
As of 2011, California, Nevada, Hawaii and Iowa all use a fee schedule set by state law to determine what percentage of the estate an executor or personal representative should receive as compensation for his work on the estate, according to the Arizona Courts. Of these states, the most complex fee schedule is California's, which provides for different percentage amounts depending on the size of the estate -- the executor may receive up to 4 percent of the first $100,000 of the estate, up to 3 percent of the next $100,000 and up to 2 percent of the next $800,000. For estates over $25 million, the percentage must be set by the court, according to the California Probate Code.
Uniform Probate Code States
Some states have adopted the Uniform Probate Code, including the section on how to compensate the executor of a will. In these states, no specific amount or fee is set by law. Instead, the probate code gives the probate court the discretion to determine what percentage to pay the executor, as long as that amount is "reasonable." The burden is placed on the executor to demonstrate that the monetary percentage she wants is reasonable and will not unduly deprive any of the estate's beneficiaries. As of 2011, the states that had adopted the Uniform Probate Code were Alaska, Arizona, Colorado, Hawaii, Idaho, Maine, Massachusetts, Michigan, Minnesota, Montana, Nebraska, New Jersey, New Mexico, North Dakota, Pennsylvania, South Carolina, South Dakota, Utah and Wisconsin.
Flat Percentage States
Most of the remaining states have a specific flat percentage listed in their probate codes. This percentage represents the amount of the estate the executor may take in compensation, regardless of the estate's size. To prevent unreasonably large executor fees, some states have enacted a flat percentage plus a requirement that the monetary compensation be reasonable overall. For instance, Virginia's probate code allows the executor to take a monetary percentage of 5 percent, but requires the probate court to check the dollar amount this represents and reduce it if it is unreasonably large for the amount of work the executor has done.
Hourly Rate States
When setting a "reasonable" fee for the executor, Uniform Probate Code states and other states that allow a judge to set a reasonable fee often permit the judge to set an hourly rate for the executor rather than giving him a certain percentage of the estate's assets. The hourly rate is designed to compensate the executor for the work he actually does, rather than compensate him based on the size of the estate.
References & Resources
- Arizona State Courts: Probate Fees - A State by State Comparison
- Roanoke County, Virginia: Probate FAQ
- California Probate Code: Personal Representatives
- Government Web Services: Income Tax for Decedents
- Indiana Probate Code: Personal Representatives
- Prince George's County, Maryland: Personal Representatives
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