Executor compensation is how an executor of a will is paid, whether a set amount or a percent of the estate. Learn about forms of executor compensation from an estate planning and probate lawyer in this free video on estate law.
What should an executor get paid? Maybe another way to put it is how should an executor get paid? And executors get paid a couple of different ways. One way that executors get paid is they get left a certain amount in the will of the deceased. We have done wills where somebody will say I leave my executor ten thousand dollars, but I don't want them to receive any other compensation. That's one way to limit the amount of money an executor receives. The problem with doing it that way is that if things get really complex, if things get really crazy, the executor's going to get that ten thousand dollars and no more money. And frankly they may quit being the executor. They don't have to serve. And you may end up with a situation where the family has to go hire a trust company or a bank to serve as executor at a lot more money than that ten thousand dollars you thought. Another way executors get paid is by the hour. If you're an individual executor, we recommend from the get-go that you keep track of the time that you've got. Talk to a lawyer in your area and find out what reasonable compensation may be. Sometimes we have two levels of compensation for our clients. We have one level if you're doing real executor stuff, and we have another level if you're just kind of running around town trying to find paperwork. You get to charge less if you're running around town looking for paperwork, you get to charge more if you're really doing executor stuff--helping to manage the money, helping to actually pay bills, and attorney conferences and things like that. The other way executors get paid is a percentage of the estate. Some states provide laws that say executors are entitled to be paid this much. Most states don't, some states do. Check with the law in your area. If you're in a state that does not have a set amount, then you may be able to call a bank trust company, you may go online, look and see what other trustees or other trust companies charge, and you can charge maybe a commensurate amount, bearing in mind you have less experience than they do, you probably ought to charge less.