Yes, Executors Can Get Paid
Serving as executor (sometimes called a personal representative or administrator) is a significant responsibility. You are managing assets, paying debts, filing tax returns, communicating with beneficiaries, and navigating the probate court -- often over a period of months or even years. It is real work, and the law recognizes that.
Every state allows executors to receive compensation for their services. The amount varies based on your state's approach: some set fees by statute, while others leave it to the court to determine what is reasonable. Understanding how compensation works helps executors know what to expect and helps beneficiaries understand what will be deducted from the estate.
For an overview of everything the role involves, see our executor responsibilities guide.
How Executor Compensation Works
Executor fees come from the estate's assets -- not from the beneficiaries' personal funds. The compensation is typically taken after debts, taxes, and expenses are paid but before final distributions to beneficiaries. Most probate courts require the executor to file an accounting that includes their requested compensation, and the court must approve the amount.
There are two main frameworks states use to determine executor pay:
Statutory Fee States
These states set executor compensation by formula -- usually a percentage of the estate's gross or net value. The percentage often decreases as the estate's value increases.
Reasonable Compensation States
The majority of states follow a "reasonable compensation" standard, meaning the court considers several factors to determine an appropriate fee. There is no set formula, which provides flexibility but also less predictability.
State-by-State Breakdown
States with Statutory Percentage Fees
California uses a declining percentage of the gross estate value:
- 4% of the first $100,000
- 3% of the next $100,000
- 2% of the next $800,000
- 1% of the next $9,000,000
- 0.5% of the next $15,000,000
For a $500,000 estate in California, the statutory executor fee is $13,000.
New York uses a similar declining scale:
- 5% of the first $100,000
- 4% of the next $200,000
- 3% of the next $700,000
- 2.5% of the next $4,000,000
- 2% of amounts over $5,000,000
For a $500,000 estate in New York, the statutory executor fee is $18,000.
Florida sets fees at:
- 3% of the first $1,000,000
- 2.5% of the next $4,000,000
- 2% of the next $5,000,000
- 1.5% of amounts over $10,000,000
For a $500,000 estate in Florida, the statutory executor fee is $15,000.
Other states with statutory or specific fee schedules include Arkansas, Iowa, Missouri, Montana, and Wyoming, though their formulas vary.
States with Reasonable Compensation
The majority of states -- including Texas, Illinois, Pennsylvania, Ohio, Michigan, Georgia, North Carolina, Virginia, and many others -- allow "reasonable compensation" as determined by the probate court.
Courts in these states typically consider:
- Time and effort the executor spent administering the estate
- Complexity of the estate (number of assets, types of property, multi-state issues)
- Skill and expertise required (business management, tax complexity)
- Results achieved (preservation of estate value, efficient administration)
- Local custom and rates charged by professional fiduciaries in the area
- Size of the estate
In practice, reasonable compensation in these states often falls in the range of 2% to 5% of the estate's value, though it can be higher for complex estates or lower for straightforward ones.
States with Specific Guidelines
Some states blend the approaches:
- Massachusetts: Reasonable compensation, but courts generally follow an informal guideline of approximately 2.5% to 5% of the estate's personal property value
- New Jersey: Reasonable compensation, with courts commonly approving 5% to 6% of income received and corpus distributed
- Connecticut: Reasonable compensation, but courts may refer to a customary range of about 1.5% to 4%
Typical Executor Fee Ranges
To put these numbers in perspective, here is what executor compensation might look like for estates of different sizes:
| Estate Value | Low End (2%) | Mid Range (3-4%) | High End (5%) |
|---|---|---|---|
| $200,000 | $4,000 | $6,000 - $8,000 | $10,000 |
| $500,000 | $10,000 | $15,000 - $20,000 | $25,000 |
| $1,000,000 | $20,000 | $30,000 - $40,000 | $50,000 |
| $2,000,000 | $40,000 | $60,000 - $80,000 | $100,000 |
These are rough guidelines. Actual compensation may be higher or lower depending on your state's rules, the estate's complexity, and whether extraordinary services were required.
Extraordinary Compensation
Beyond the base fee, executors can often petition for additional compensation for services that go beyond ordinary administration. Examples include:
- Defending or prosecuting litigation on behalf of the estate
- Managing or selling a business owned by the estate
- Handling complex tax issues such as audits or estate tax returns
- Selling real property (especially if it requires repairs, staging, or protracted negotiations)
- Dealing with contested claims from creditors or disputes among beneficiaries
- Managing rental property during the probate period
The court evaluates these requests on a case-by-case basis. Executors should keep detailed records of the time spent on extraordinary tasks to support their petition.
Tax Implications of Executor Compensation
This is an important consideration that many executors overlook:
Executor compensation is taxable income. It must be reported on your personal federal income tax return, and it is generally subject to self-employment tax (15.3% for Social Security and Medicare) since it is considered payment for services rendered rather than employment income.
The estate, on the other hand, can deduct the executor's compensation as an administrative expense, which may reduce the estate's income tax or estate tax liability.
The Waiver Calculation
This creates an interesting calculation for executors who are also beneficiaries:
- Executor compensation is taxable income (subject to income tax + self-employment tax)
- An inheritance is generally not taxable to the beneficiary
If you are set to inherit from the estate anyway, taking executor compensation means converting a portion of your tax-free inheritance into taxable income. For family member executors, this is often why they choose to waive their fee.
Example: An executor/beneficiary is entitled to $15,000 in executor compensation. If they are in the 24% federal tax bracket and pay 15.3% self-employment tax, they would owe approximately $5,900 in taxes on that $15,000. By waiving the fee, that $15,000 remains in the estate and flows to them as part of their tax-free inheritance.
However, if the estate owes estate tax, the calculus may flip -- the estate's deduction for the executor fee could save more in estate tax than the executor pays in income tax.
When Executors Waive Compensation
Family members who serve as executor frequently waive their fee. Common reasons include:
- Tax efficiency (as described above -- keeping the money as inheritance is often more tax-favorable)
- Family harmony (taking a fee can create tension with other beneficiaries)
- Sense of duty (feeling that managing a parent's or spouse's estate is a family obligation, not a job)
- Small estate (the fee may not be worth the paperwork and tax reporting)
There is no shame in accepting compensation, though. If you are spending dozens of hours over many months handling an estate, you are performing valuable work. If the estate is complex or if you are not a beneficiary, compensation is entirely appropriate and expected.
How to Claim Executor Compensation
The process varies by state, but typically involves these steps:
- Track your time and expenses. Keep a log of hours spent and tasks performed. Save receipts for any out-of-pocket expenses (mileage, postage, copies, etc.).
- Include compensation in your accounting. When you file your final accounting or petition for distribution with the probate court, include the requested executor fee.
- Get court approval. The court reviews the amount for reasonableness (even in statutory fee states, the court confirms the fee).
- Report it on your taxes. Include the compensation as income on your personal tax return for the year you receive it.
If beneficiaries object to the compensation amount, the court will hold a hearing and make a determination. Having detailed time records makes it much easier to justify your fee.
Professional Executors and Corporate Trustees
When no family member is willing or able to serve, some estates name a professional executor -- such as a bank trust department or a corporate fiduciary. Professional executors typically charge:
- Annual fees of 1% to 2% of the estate's value
- Transaction fees for specific services
- Minimum fees of $3,000 to $5,000 per year
Professional executors can be more expensive than family members, but they bring expertise that can be valuable for large or complex estates. Some families find a middle ground by naming a family member as co-executor alongside a professional.
How SwiftProbate Can Help
Whether you are a first-time executor figuring out what the role involves or someone trying to understand the overall costs of probate, SwiftProbate helps you organize and track every step of estate settlement. Our personalized task lists are tailored to your state and your estate's specific circumstances, helping you navigate the process efficiently -- so the work of being executor feels manageable rather than overwhelming.
This article is for informational purposes only and does not constitute legal or tax advice. Executor compensation rules vary by state and can change. Consult a qualified attorney or tax professional for guidance specific to your situation.