Under the Texas Probate Code, standard compensation is a five (5%) percent commission on (all) amounts the executor or trustee receives; or (paid in cash) in estate management (Texas two-step executor's compensation). However, if the estate is so large that you owe federal assets (which is very rare, since more than 99% of states will not owe the tax) and your personal tax rate is lower than that of the estate, accepting compensation can be a good tax measure. If the estate is large enough to owe estate taxes, you should consult an estate attorney anyway. If the will does not establish a charge and you decide to charge a reasonable fee, it's up to you to determine what is reasonable under the circumstances.
The probate court is unlikely to argue with your bill, unless the beneficiary of the estate objects. Some states have statutory rules about how much an executor can claim, and you may not receive objections from beneficiaries if you follow your state's formula. Even if your state's law doesn't have a table of statutory rates, you may be able to charge a percentage of the value of the estate. For example, if you sold real estate, you could claim a percentage of the sale price of the property.
If the beneficiaries don't object, there will be no problem. Typical executor fees are intended to compensate for the time and energy required to finalize another person's affairs. They are calculated as a percentage of the estate, a flat rate, or an hourly rate, according to state law. A common question from someone who has been named executor of a will after the will has been proven (the process in which the decedent's will is determined to be valid) is “What can I charge to act as executor? After all, it often takes a long time for the executor to collect and inventory the estate's assets, pay all debts, taxes and expenses before distributing the estate, not to mention liability if things are done incorrectly.
Texas law does not allow compensation to an executor for cash available at the time of the decedent's death, including checking accounts, savings accounts, certificates of deposit, money market accounts, collecting life insurance policy income (unless difficult to obtain), or paying bequests in cash to beneficiaries. The executor could receive more than five (5%) percent commission if the type of work involved is difficult. If your estate is greater than this exemption, the executor's income tax rate may be lower than the wealth tax rate. For those of you who don't speak Latin, however few you may be, the body of inheritance is the main body of inheritance.
But if you're weighing this decision, remember that being an executor requires a commitment to work on behalf of the beneficiaries of the estate for months or even years. To fulfill your obligations as executor of an estate, you must first be granted authority through a testamentary letter. Many states agree that the executor of a will is entitled to reasonable compensation for his or her services. Some executors may choose to waive payment, especially if they are going to receive estate assets; generally, you don't have to pay taxes on an estate, unless you live in one of the six states with a state inheritance tax.
In states that require a specific percentage of the estate, there is also the possibility that the executor may charge an “extraordinary fee” if the duties of managing the estate have gone beyond the usual situations, such as being involved in litigation or tax disputes on behalf of the estate. Executors' fees are usually stipulated in a person's last will and will, and if there is no will, then the amount paid to the executor will will depend on state law, which may have guidelines for how much should be paid. North Carolina law says executor's fees are at the discretion of the clerk of the superior court, but should not exceed five percent (5%). Executors receive 5% of the value of any money they actually receive or pay in cash while performing their tasks.
Because an estate cannot be distributed to beneficiaries until the will is proven, the length of the probate process directly affects the beneficiaries. In this determination, a court may consider factors such as the complexity of the estate and the issues involved, and the time the executor spent carrying out the tasks, among others. If there is no will, or there is no provision governing executor's fees in a valid will, state law governs how the executor will will be paid. Executors' fees in Georgia are governed by a wide range of laws, including taking into account executor's fees established by a will or other agreement.