Can Executors of Estates Get Paid?

By Tom Streissguth

When a testator draws up a will, she usually names an executor who is responsible for carrying out the will's instructions. When there is no will, the court will appoint a person for the same task, known as a personal representative or administrator. This can be a complex and difficult task since the executor must abide by the law, follow the terms of the will and deal with any controversies among beneficiaries. However, under most circumstances, an executor is entitled to compensation for the service he provides.

Naming an Executor

When drawing up a will, most people name an executor. This person takes over the estate upon the death of the will maker and accepts legal responsibility for carrying out the will's instructions. The executor must submit the will to probate, if state law requires it, and has the option of hiring an attorney to assist in the process if a lengthy probate case looms. If someone dies without a will, a probate court will name a personal representative or administrator; this person might be a relative, spouse or attorney who voluntarily accepts the assignment.

Executor Functions

An executor -- who must be notified of his appointment when the will is prepared -- notifies surviving relatives, beneficiaries and creditors when the death occurs. The executor is also responsible for paying any outstanding debts of the deceased and transferring remaining assets to beneficiaries. Creditors have a deadline within which to file their claims; the executor has the right to dispute these claims in probate. The executor may also transfer title to real estate and other property to beneficiaries or, if necessary, sell property in order to satisfy outstanding claims against the estate. These issues can demand a lot of time and attention; an executor may need to resolve disputes among beneficiaries, negotiate with creditors, prepare tax returns, file pleadings in probate and attend hearings. For this reason, state laws universally recognize the right of executors to charge a reasonable fee for their services.

Protect your loved ones. Start My Estate Plan

Statutory Guidelines

State law sets out the statutory guidelines for executor fees. In Virginia, for example, the law allows "reasonable compensation" but the amount is set by local courts. Fairfax County sets the fee at 5 percent of the estate value and 5 percent of any income it generates for estates up to $400,000 in value. The percentage declines as the estate grows; for the next $300,000 in value, compensation is limited to 4 percent; the next $300,000, 3 percent; and any amount over $1 million, 2 percent. In Nevada, the law sets a statutory fee of 4 percent of the first $15,000 of an estate; 3 percent of the next $85,000; and 2 percent of the amount over that. Some states also require executors to purchase an "executor bond" that insures against any fraud or misconduct on the executor's part; the charge for the bond typically varies with the size of the estate.

Executor Legal Issues

Executor fees are subject to approval by the probate court overseeing the estate. In some cases, usually involving spouses or close relatives, there is no executor fee involved (particularly if the executor is also named as a beneficiary of the will). Beneficiaries have the right to contest the amount of the fee and request a hearing to decide the issue; the executor may also petition for his own replacement if there is a conflict of interest or other legal or personal issue that would interfere with the administration of the estate.

Protect your loved ones. Start My Estate Plan
Is It Customary to Pay the Executor of a Will?
 

References

Related articles

New Jersey's Probate Estate Laws With an Executor Fee

Being asked to settle a deceased person's estate can sometimes feel like taking on a second job. In addition to the time-consuming process of wrapping up the individual's financial affairs, you may be required to make court appearances and could be placed in the middle of a highly contentious family situation regarding inheritance rights. For this reason, New Jersey law gives executors the right to take a percentage of the estate as payment for their services.

Estate Administrator Duties

When a person dies, his estate will likely go through the probate process, whether or not he left a will. During probate, the estate will be collected, debts paid and remaining assets distributed to beneficiaries. The person assigned the duty of managing the estate through this process is called an administrator or executor. Since state statutes govern estate administration, the administrator must follow state law regarding procedures and time frames.

How to Settle a Personal Estate

When a person creates a will, she often includes language in the will identifying a person who will serve as the executor of the estate when the will creator dies. A person who dies without a will is said to have died “intestate.” Whereas an executor handles estate assets under a will, an administrator handles a deceased person’s estate if the person died intestate. Although the titles differ, both executors and administrators are responsible for managing the distributing the decedent’s estate.

LegalZoom. Legal help is here. Start Here. Wills. Trusts. Attorney help.

Related articles

What Percentage Does the Executor Get in Illinois?

An executor in Illinois handles your estate according to the instructions in your will. If there is no will, the ...

Who Pays the Cost for the Attorney Fees & the Executor of Probate?

By creating a will and naming an executor, you set forth instructions for the transfer of assets from your estate to ...

Who Gets Paid First Out of a Deceased's Estate?

Probate is the process of settling a decedent's estate under court supervision. State law may establish an informal ...

Does an Executor of a Will Receive More?

The job of an executor is to handle the estate of the deceased. In most cases, the deceased names the executor in his ...

Browse by category
Ready to Begin? GET STARTED