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

By Tom Streissguth

By creating a will and naming an executor, you set forth instructions for the transfer of assets from your estate to your heirs after your death. A will must go through probate, meaning a civil court approves the document and holds authority over the actions of the executor. By state laws, executors and attorneys involved in the probate process are entitled to reasonable compensation for their work. The fees are paid out of the estate's assets.

Names and Titles

To be legal, a will must be signed and witnessed. If the will appoints an executor, that individual is responsible for carrying out the will's instructions. That means paying any valid claims against the estate and transferring assets to the heirs named in the document. If the will does not name an executor, then the probate court or a registrar of wills must appoint an administrator to carry out the task. Both executors and administrators are informally known as "personal representatives." Their role is different from that of an attorney, who represents the interests of the estate in probate court and in any litigation that may arise.

Statutory Fees and Executor Fees

State law sets out guidelines for the fees an executor or attorney may collect from an estate. In some states, including New York, there is a sliding-scale limit on executor fees, figured as a percentage of estate assets: 5 percent of sums received and paid out, up to $100,000; 4 percent for the next $100,000; 3 percent for the next $500,000; 2.5 percent on the next $4 million; and 2 percent for any sums over $5 million. Kentucky sets a flat rate of 5 percent of value and 5 percent of income generated by the estate. Attorneys will charge for probate and estate work with an hourly fee, a flat rate or a percentage of assets, depending on what state law permits and how the executor negotiates the matter. .

Protect your loved ones. Start My Estate Plan

Reasonable Standards and Attorney Fees

Not all states adhere to a strict percentage rate for executors; Connecticut law, for example, only requires that compensation be "reasonable," leaving it up to the probate court to make that determination. If the will fixes the executor fee, then other parties such as heirs may challenge that fee on grounds that it is unreasonable. In many cases, the fee is subject to an agreement between the executor and the heirs. The same "reasonable" standard applies to attorney fees, which are subject to a written fee agreement with the estate (which pays the fee) and the executor. .

Fees and Taxes

The executor may be an individual (and heir) named in the will. If that is the case, any compensation paid by the estate as an executor's fee is subject to personal income tax, both state and federal. If the estate is large enough to be subject to federal estate tax, as well as state inheritance tax, then declining the fee may be to the executor's financial advantage -- even if the executor's fee is a deductible expense. Unless they are named as heirs, attorneys don't have a choice in the matter; any fees they collect are declared as business income and subject to income tax.

Protect your loved ones. Start My Estate Plan
What Percentage Does the Executor Get in Illinois?

References

Related articles

What to Expect in Tennessee Probate Court

When someone passes away owning property in Tennessee, the probate court is charged with supervising administration of the estate. The depth of the court's involvement will depend on the amount and type of property in the estate, and whether there are any objections raised by those who may inherit under a will or by intestacy laws. The process is highly legal in nature, and for all estates valued at over $25,000, Tennessee requires an attorney to open the probate process and to represent the person appointed to administer the estate. Estates valued at less than that amount and having no real property can take advantage of a streamlined procedure known as a small estate probate.

Can an Executor Probate a Will Without a Lawyer?

A will must be probated and an executor must be appointed before the assets of a deceased person can be legally distributed. Probate is the legal proceedings in which a person -- typically referred to as an executor or executrix -- is given the legal authority to handle the estate's financial affairs, and transfer the shares and assets to the heirs as dictated by the provisions of the will.

California Executor Checklist

The executor is the person who manages the estate of the deceased, also known as the decedent, during the probate process. The executor is responsible for paying debts of the estate and distributing assets to the heirs. California law allows for the compensation of executors from the estate assets.

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

Related articles

Can Executors of Estates Get Paid?

When a testator draws up a will, she usually names an executor who is responsible for carrying out the will's ...

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 ...

Is It Customary to Pay the Executor of a Will?

Drawing up a will is essential if you want to leave property to your family, close friends, charities or any other ...

Does the Executor of a Will Have to Use an Attorney to Execute the Will?

When you create a will, you not only leave instructions for how your property should be distributed upon death, you ...

Browse by category
Ready to Begin? GET STARTED