Executor Fees: How Much Does an Executor Get Paid?

Serving as executor can mean months of paperwork, phone calls, and responsibility. So it is fair to ask: does the executor get paid? Usually, yes. Here is how executor compensation works — and why some people choose to waive it.

Yes, executors are entitled to compensation

An executor performs a real job with real legal liability, and the law recognizes that. Compensation is paid from the estate (not by the heirs personally) before the remaining assets are distributed.

How the amount is determined

The fee usually comes from one of three sources:

• The will. If it specifies the executor's compensation, that generally controls.
• State law. Many states set a fee schedule — often a percentage of the estate's value (for example, a tiered percentage that decreases as the estate grows), or a standard of “reasonable compensation.”
• Court approval. In some cases, the court reviews and approves what is reasonable based on the work involved.

What “reasonable” depends on

• The size and complexity of the estate
• Time and effort required — a contested estate or a business takes far more work
• The executor's skill and any specialized tasks performed
• Local norms and court expectations

The tax catch

Here is what surprises many executors: executor fees are taxable income to the person who receives them. An inheritance is generally not taxed to the heir, but a fee is. This is why a family member who is also a beneficiary often waives the fee — taking their share as a (tax-free) inheritance instead of as taxable compensation can leave them better off.

Should you take the fee or waive it?

• Take it if you are not a beneficiary, the work is substantial, or you simply earned it.
• Consider waiving it if you are also inheriting and the tax math favors taking more as inheritance — run the numbers.

For those planning ahead

If you are writing your own will, you can address executor compensation directly so there are no surprises. And whether your executor is paid or not, the single best way to reduce their workload — and any fee tied to it — is to leave a complete, organized inventory of your estate so they spend their time settling, not searching.

This article is general educational information, not legal or tax advice. Executor fee rules and tax treatment vary by state and situation. Consult a qualified attorney and tax advisor.