What Percent Does an Executor of a Will Get? Complete Fee Breakdown By State

Being named as an executor of someone’s will is both an honor and a significant responsibility One question that frequently comes up is “What percent does an executor of a will get paid?” If you’re wondering about executor compensation – whether you’re planning your own will or you’ve been named as someone’s executor – you’ve come to the right place

Understanding Executor Compensation: It’s Not Just a Simple Percentage

Many people assume executors receive a flat percentage of the estate’s value, but the reality is much more nuanced. Executor fees vary widely based on several factors:

1. What the will specifies about payment
2. State laws governing executor compensation
3. The size and complexity of the estate
4. Whether extraordinary services were required

For you to fully understand what you’re looking at when it comes to executor pay, let me break this down into simple terms.

How Is an Executor’s Fee Determined?

There are typically three ways an executor’s compensation gets determined

1. The Will’s Instructions

The person writing the will is called the testator, and they can be very clear about how they want their executor to be paid. They might:

• Set a flat fee amount
• Establish a percentage
• Request that the executor serve without compensation
• Leave a bequest instead of a fee (which has tax advantages since bequests aren’t taxable income)

2. State Law

If the will doesn’t mention compensation, state law kicks in. Each state has its own rules about executor fees, which we’ll go over in more detail below.

3. Court Determination

When neither the will nor the state law makes it clear, the court will decide what “reasonable compensation” is by looking at:

• Time spent on estate matters
• Complexity of the estate
• Skills required
• Results achieved

Why Do Executors Get Paid Anyway?

Before diving into percentages, it’s worth understanding why executors deserve compensation. Being an executor is often like having a second job. Their responsibilities typically include:

• Filing the petition to open probate with the court
• Locating and securing all the deceased’s assets
• Notifying heirs, beneficiaries, and creditors
• Managing the estate during probate (paying bills, closing accounts, etc.)
• Paying debts and taxes from estate funds
• Distributing remaining assets to beneficiaries
• Filing final accounting and closing the estate

This process can take months or even years to complete, requiring significant time and effort. That’s why most states provide for reasonable compensation.

Executor Fee Percentages by State

Here’s a breakdown of how executor compensation works in different states. I’ve organized this info to help you easily find what you need:

States with Decreasing Percentage Scales

Many states use a “graduated percentage” approach where the percentage decreases as the estate value increases:

California:

• 4% on the first $100,000
• 3% on the next $100,000
• 2% on the next $800,000
• 1% on the next $9 million

New York:

• 5% on the first $100,000
• 4% on the next $200,000
• 3% on the next $700,000
• 2.5% on the next $4 million
• 2% on amounts over $5 million

Florida:

• 3% of the first $1 million
• 2.5% for amounts $1-5 million
• 2% for amounts $5-10 million
• 1.5% for amounts over $10 million

New Jersey:

• 5% on the first $200,000
• 3.5% on the next $800,000
• 2% on amounts over $1 million

Ohio:

• 4% on the first $100,000
• 3% on the next $300,000
• 2% on amounts over $400,000
• Plus 1% on real property not sold

States with Simple Percentage Rates

Some states keep it simple with straightforward percentages:

Georgia: 2.5% on all funds received and 2.5% on all funds paid out

Kentucky: 5% of the personal estate plus 5% of income collected

Louisiana: 2.5% of the gross estate (if not specified in the will)

North Carolina: Up to 5% of the estate after debts are settled

Wisconsin: 2% of the net estate value

Texas: 5% commission on cash received or paid out (up to 5% of fair market value)

States with “Reasonable Compensation” Standards

Many states don’t specify exact percentages, instead allowing for “reasonable compensation”:

• Alaska
• Arizona
• Colorado
• Connecticut
• Hawaii
• Idaho
• Illinois
• Maine
• Massachusetts
• Michigan
• Minnesota
• Montana
• Nebraska
• New Hampshire
• New Mexico
• North Dakota
• Rhode Island
• Utah
• Vermont
• Washington

In these states, courts typically look at factors like time spent, difficulty of tasks, skills needed, and results achieved.

What Estate Assets Count Toward the Executor’s Fee?

Here’s something important that many people don’t realize: executor fees are typically calculated based only on the probate estate – not all assets the deceased owned.

Assets that typically count toward fee calculation:

• Real estate titled solely in the deceased’s name
• Bank accounts in the deceased’s name only
• Personal property (furniture, jewelry, vehicles, etc.)
• Business interests owned solely by the deceased

Assets that typically DON’T count:

• Life insurance proceeds with named beneficiaries
• Retirement accounts (401k, IRA) with designated beneficiaries
• Property held in a living trust
• Jointly owned property with right of survivorship
• Payable-on-death accounts

This means an executor’s fee might be smaller than expected if most of a high-value estate consists of non-probate assets.

Additional Compensation for Extraordinary Services

Sometimes executors have to go above and beyond normal duties. In these cases, they may be eligible for additional compensation for “extraordinary services” such as:

• Managing or selling a business
• Handling real estate sales or management
• Defending the estate in litigation
• Dealing with complicated tax matters
• Running the deceased’s business operations

To receive this extra compensation, the executor must:

1. Keep detailed records of the extraordinary work
2. Request approval from the court
3. Justify why the services were necessary
4. Get court approval before receiving payment

When Does an Executor Get Paid?

Executors don’t get paid upfront. The executor fee is considered an administrative expense of the estate and is typically paid:

• After debts and taxes are paid
• Before final distribution to beneficiaries
• Subject to court approval
• After submitting a final accounting

Before payment, the executor must submit a detailed accounting showing all financial activities of the estate, including how they calculated their fee. Beneficiaries can object if they believe the fee is unreasonable.

Can an Executor Decline Payment?

Yes! Many executors who are also family members choose to waive their fee, especially if they’re also beneficiaries. This can sometimes make financial sense since:

1. Executor fees are taxable income
2. Inheritances generally aren’t taxed as income

However, even executors who waive their fee can still get reimbursed for out-of-pocket expenses like:

• Travel expenses
• Postage and office supplies
• Funeral expenses they covered
• Professional fees they paid (attorneys, accountants, appraisers)

Real-World Example: Calculating an Executor Fee

Let’s say you’re the executor of a $1 million estate in California. How much would you get paid?

• 4% of the first $100,000 = $4,000
• 3% of the next $100,000 = $3,000
• 2% of the remaining $800,000 = $16,000
• Total executor fee = $23,000

This represents about 2.3% of the total estate value, showing how the decreasing percentage scale works in practice.

Final Thoughts on Executor Compensation

Whether you’re planning your estate or serving as an executor, understanding compensation is important. Here are some key takeaways:

1. Be specific in your will about executor compensation to avoid confusion
2. Keep detailed records if you’re serving as an executor
3. Consult with an attorney if you have questions about reasonable fees in your state
4. Consider tax implications when deciding whether to accept or waive fees

Serving as an executor is a significant responsibility that often involves months of work. The compensation provided is meant to recognize this important service while ensuring the bulk of the estate goes to the intended beneficiaries.

Remember, an executor’s primary duty is always to act in the best interests of the estate and its beneficiaries, regardless of compensation. The fee structure is designed to be fair to both the executor and the beneficiaries.

Have you served as an executor or are you planning to name one in your will? What questions do you still have about executor compensation? I’d love to hear your experiences in the comments!