Being an executor is real work — sometimes weeks or months of work. Executors are legally entitled to compensation, though the rules differ by state and family members often choose to waive fees. Here's how executor compensation works.
The Legal Basis for Executor Fees
Every state has laws governing executor compensation. These laws exist because the job is substantial: gathering assets, paying debts, filing tax returns, communicating with beneficiaries, managing property, and eventually distributing the estate. An executor who does this well deserves fair compensation.
The will can specify the executor's fee — and many professionally drafted wills do. The will might say "I authorize my executor to take a reasonable fee" or specify a percentage. If the will doesn't address it, state law governs.
How Fees Are Calculated
Percentage-based states
Many states set statutory fees as a percentage of estate value. California's statutory fee schedule is one of the best-known examples:
- 4% of the first $100,000
- 3% of the next $100,000
- 2% of the next $800,000
- 1% of the next $9 million
- 0.5% of the next $15 million
- A "reasonable amount" above $25 million
Other percentage-based states include New York, Florida, and Pennsylvania. The percentage typically applies to the gross estate value passing through probate.
Reasonable compensation states
Many states use a "reasonable compensation" standard — the executor takes what is reasonable given the work involved, and the probate court can review fees if beneficiaries object. Factors courts consider: time spent; complexity of the estate; skill required; results achieved; and customary rates for similar services in the community.
Extraordinary Services
Standard executor fees typically assume a straightforward estate. For extraordinary services — prolonged litigation, managing or selling a business, dealing with multiple real estate properties, handling tax disputes, or any other service that goes well beyond typical estate administration — additional compensation is appropriate. Always document the time and nature of extraordinary work, and ideally get beneficiary agreement before taking extraordinary fees to avoid disputes.
Should a Family Member Executor Take the Fee?
This is a common question — and the answer depends on the individual situation:
Arguments for waiving the fee
- The fee is taxable income; your inheritance share is not — so you're often better off financially taking your inheritance share instead
- Taking a fee when you're also an equal beneficiary may seem unfair to other beneficiaries
- It simplifies the administration and reduces potential conflict
Arguments for taking the fee
- If you did significant work — months of time, complex administration — compensation is fair and appropriate
- If you receive a smaller share of the estate than other beneficiaries, the fee compensates for your disproportionate work
- Professional executors always charge; there's no shame in being compensated for real work
Professional Executors
Banks, trust companies, and attorneys can serve as executors. They always charge fees — typically the statutory fee or a percentage of assets under administration. Professional executors provide continuity and expertise, but their fees can be substantial. For a $1 million estate at California's statutory rate, the professional executor fee would be approximately $23,000.