In some states, including New York, there is a sliding-scale limit on executor fees, figured as a percentage of estate assets: 5 percent of sums received and paid out, up to $100,000; 4 percent for the next $100,000; 3 percent for the next $500,000; 2.5 percent on the next $4 million; and 2 percent for any sums over $5 million.
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Jul 29, 2019 · Six in ten readers said their estate administration lawyers charged between $200 and $400 per hour. Hourly Rates Many attorneys charge by the hour for probate or other estate administration work (typically in smaller increments like one-tenth of an hour, or six minutes).
However, in many cases, it will not. In most states, it is acceptable for an estate executor to be paid a “reasonable” fee for work done in the role. In other states, there is a statutory (legal) formula for calculating estate executor compensation, which is often a percentage of the probate assets. A number of questions you might ask ...
In Oregon, the law states that the executor’s compensation is based on the following: • Probate property, including income and gains: (A) Seven percent of any sum not exceeding $1,000. (B) Four percent of all above $1,000 and not exceeding $10,000. (C) Three percent of all above $10,000 and not exceeding $50,000.
Dec 24, 2019 · Some attorneys charge an hourly rate for their services, which can range from $150 to upward of $300. It can depend on several factors, including the lawyer’s experience, whether they’re a general practitioner or a dedicated probate lawyer, whether they’re part of a firm or work on their own, as well as their location.
In states that use reasonable compensation to determine executor fees, it means compensation is determined by the probate court. Typically, the probate court will find executor compensation reasonable if it is in line with what people have received in the past as compensation in that area.
Even though executor compensation in Alabama is supposed to be reasonable compensation, Alabama executor fees should not exceed 2.5%.
Maryland executor fees, by law, should not exceed certain amounts. Reasonable compensation is not to exceed 9% if less than $20,000; and $1,800 plus 3.6% of the excess over $20,000. Executor Fees in Massachusetts. Massachusetts is a reasonable compensation state for executor fees.
Reasonable fees are not to exceed six percent (6%) for the first $1,000; four percent (4%) for the next $1,000-$5,000; and two percent (2%) for remaining amounts greater than $5,000. Kansas is a reasonable compensation state for executor fees.
Reasonable compensation for executor fees in Arkansas should not to exceed ten percent (10%) of the first $1,000, five percent (5%) of the next $4,000, and three percent (3%) of the rest.
For example, if in the last year, executor fees were typically 1.5%, then 1.5% would be considered reasonable and 3% may be unreasonable. But the court can take into account other factors such as how complicated the estate is to administer and may increase or decrease the amount from there.
Connecticut does not have a statute governing executor compensation, but case law seems to suggest that Connecticut executor fees fit within the reasonable compensation heading. In states that use reasonable compensation to determine executor fees, it means compensation is determined by the probate court.
The executor is entitled to be reimbursed for any estate administrative expenses she might pay out of her own pocket. These might include expenses that had to be paid before the estate could be opened for probate, such as doctor and funeral bills.
Some states provide specific rules for fees. They're typically calculated by multiplying the gross value of the probate estate by a specific percent. As the gross value increases the percent decreases. 3  For example, the fee might be equal to 4 percent of the first $100,000 then decrease incrementally until it's just 1 percent of values over $9 million. 4 
Even if the will provides for compensation and sets a certain amount, it's not required that an executor must accept payment. 3  Sometimes close family members are reluctant to do so because they're effectively taking the funds from other beneficiaries who only get what's left after the executor and other expenses are paid. If you find yourself in this situation, you don't have to feel compelled to take the money.
If there is more than one personal representative and the will is silent as to how each is to be paid—it doesn't include any provisions for this—state law will dictate the fees paid to each of them. In some states, the law requires that multiple executors must divide the fee equally. In others, each executor can collect the full fee that one personal representative would be entitled to receive. 9 
In other states, the executor's fee can only be paid after a court hearing and with a judge's approval. 4  The requirement for a hearing might be waived, however, if all the beneficiaries are informed of the fees to be paid and they sign consents to authorize payment without a judge's order. 17 .
This actually provides an income tax benefit for the personal representative because a bequest is nontaxable while fees are taxed as ordinary income. 2  3 
Even in states where the personal representative's fee is set by state law, he might be entitled to receive an additional fee for "extraordinary" services that are rendered above and beyond the call of duty. 4 
The most common rate (reported by 35% of readers) was between $300 and $400, although half of readers paid less than that. Only 15% paid $400 or more per hour.
Nationally, the average minimum hourly rate attorneys reported was $250, while the average maximum was $310. Individual lawyers often charge different rates, depending on the client and the type of service they’re providing. Also, rates vary among attorneys depending on several factors, including:
More than half (58%) of the probate attorneys in our national study reported that they offered free consultations. The typical time for these initial meetings was 30 minutes, though the overall average was higher (38 minutes). So when you’re looking to find a good probate lawyer, ask the potential attorneys whether they offer a free initial consultation. Even if they charge for their time , it can be worth your while to meet with more than one lawyer—and to go to the meetings prepared with a list of questions—in order to find the right attorney for your needs.
It shouldn’t be a surprise to learn that large estates tended to pay more for legal services. Big estates are more likely to have complex issues— including taxes and business assets —that require more of an attorney’s time and expertise. Also, some states limit fees according to the size of the estate, allowing attorneys to charge more for larger estates. More than a third (36%) of readers who were settling estates worth $1 million or more said that the estate paid $10,000 or more in legal fees, compared to 18% of those who were handling estates worth less than that.
The attorney’s experience. Not surprisingly, our study showed that hourly rates climbed as probate lawyers had more years in practice. But it’s worth keeping in mind that in this respect, at least, a higher hourly rate doesn’t necessarily translate into a higher total bill. Often, specialists with significant experience in estate administration may be able to answer your questions or handle difficult estate matters more quickly than less-seasoned lawyers.
If you’re serving as an executor, personal representative, trustee, or administrator of an estate, you might need a lawyer’s help with some part of the process. The good news is that estate funds will almost always pay for that help. Still, you don’t want to squander the estate’s money—and you probably want to know what to expect in the way of attorney’s fees. We surveyed readers around the United States who recently acted as executors, personal representatives, trustees, and/or administrators to ask about their fee arrangements with attorneys and their total bills. We then compared the survey results with data on fees reported by probate attorneys across the country. Here’s some of what we found out.
In a few states (such as California and Florida), attorneys are allowed to charge a percentage of the estate’s value as the fee for handling probate. In our survey, only 8% of readers who paid a lawyer for help said the estate they were handling paid a percentage-based attorney’s fee.
In most states, it is acceptable for an estate executor to be paid a “reasonable” fee for work done in the role. In other states, there is a statutory (legal) formula for calculating estate executor compensation, which is often a percentage of the probate assets.
Whether or not to accept compensation for work done for your executor duties is a complicated question. In some cases, an hourly rate or flat fee will be spelled out in the will. However, in many cases, it will not. In most states, it is acceptable for an estate executor to be paid a “reasonable” fee for work done in the role.
Money earned in your role as an executor is taxable income. In most cases, the money you will inherit will not be subject to taxes. If you will inherit a large portion of the estate, you might be better off on an after-tax basis to waive the fee.
The executor is paid before property is distributed to the estate’s beneficiaries. Often, an executor must file paperwork with the probate court demonstrating that the bills have all been paid and that no new bills will arrive.
An estate planning lawyer can work with you to create an estate plan that not only meets your needs, but one that addresses the specifics, such as probate fees, executor’s fees and estate taxes.
An executor of an estate, also called a personal representative in Oregon, is normally paid for their work. Each state has laws that govern how much they are paid. In Oregon it is based on a percentage of the estate. The beneficiaries of the estate do not pay the executor, but the fee is taken from the estate itself.
An executor has many important duties during probate, but what do they get in return? One of the most important estate planning documents is a will – not only does it distribute your property when you die, but it names a guardian for your children and an executor for your estate.
The court allows the executor to receive their fee and distribute the rest of the assets only when it is convinced that the executor has finished settling the estate's debts and any estate litigation or will contests are settled.
Some attorneys charge an hourly rate for their services, which can range from $150 to upward of $300. It can depend on several factors, including the lawyer’s experience, whether they’re a general practitioner or a dedicated probate lawyer, whether they’re part of a firm or work on their own, as well as their location. Big city attorneys invariably charge more than their more rural counterparts, and probate lawyers’ fees tend to be steeper than those of general practitioners. After all, they’re experts when it comes to handling probate issues.
The estate will pay for six minutes or one-tenth of their time if they take a phone call on the executor's behalf that lasts just three minutes. It will pay for 18 minutes if the attorney spends 15 minutes drafting a letter – and yes, they keep meticulous records of their time. But there’s a bright side here.
Probate is required to move property and assets from the ownership of the deceased into the names of living beneficiaries, assuming that there’s no built-in mechanism in place to achieve this . For example, property held as joint tenants with rights of survivorship passes directly to the survivor by operation of law. The same applies to joint bank accounts, while “payable-on-death” accounts and assets with named beneficiaries are set up to go to the beneficiary upon the primary account holder’s death without the necessity of probate.
Of course, the estate’s beneficiaries might feel a bit of a pinch because this depletes the value of the estate , leaving less available to transfer to the ownership of others.
Executors should take a deep breath if they’ve been asked to administer an estate and they're panicking a little over how much it will cost them. Executors are not responsible for personally paying any professionals from whom they seek assistance during the probate process, including an attorney. Probate lawyer fees are always paid out of the estate.
Probate of an estate can be a complicated process, and an executor isn’t always up to the task of tackling it alone. It’s no reflection on their abilities, but rather the result of the numerous legal steps through which an estate must pass on its way to settlement. Lawyers who assist with the probate process charge for their work in one ...
Attorneys often delegate some routine work to paralegals and young associates – under their supervision, of course – and the hourly rates of these individuals are usually less, sometimes significantly. The estate won’t have to pay $300 an hour for correspondence drafted by a paralegal. Even so, the executor won’t know what the total fee will end up costing the estate until the end of the road when all the legal work is complete, every minute is accounted for and the estate closes.
In some states, including New York, there is a sliding-scale limit on executor fees, figured as a percentage of estate assets: 5 percent of sums received and paid out, up to $100,000; 4 percent for the next $100,000; 3 percent for the next $500,000;
If the will does not name an executor, then the probate court or a registrar of wills must appoint an administrator to carry out the task. Both executors and administrators are informally known as "personal representatives.". Their role is different from that of an attorney, who represents the interests of the estate in probate court ...
Kentucky sets a flat rate of 5 percent of value and 5 percent of income generated by the estate. Attorneys will charge for probate and estate work with an hourly fee, a flat rate or a percentage of assets, depending on what state law permits and how the executor negotiates the matter. .
By creating a will and naming an executor, you set forth instructions for the transfer of assets from your estate to your heirs after your death. A will must go through probate, meaning a civil court approves the document and holds authority over the actions of the executor. By state laws, executors and attorneys involved in the probate process are entitled to reasonable compensation for their work. The fees are paid out of the estate's assets.
To be legal, a will must be signed and witnessed. If the will appoints an executor, that individual is responsible for carrying out the will's instructions. That means paying any valid claims against the estate and transferring assets to the heirs named in the document. If the will does not name an executor, then the probate court or a registrar of wills must appoint an administrator to carry out the task. Both executors and administrators are informally known as "personal representatives." Their role is different from that of an attorney, who represents the interests of the estate in probate court and in any litigation that may arise.
In many cases, the fee is subject to an agreement between the executor and the heirs. The same "reasonable" standard applies to attorney fees, which are subject to a written fee agreement with the estate (which pays the fee) and the executor. .
The executor may be an individual (and heir) named in the will. If that is the case, any compensation paid by the estate as an executor's fee is subject to personal income tax, both state and federal. If the estate is large enough to be subject to federal estate tax, as well as state inheritance tax, then declining the fee may be to the executor's financial advantage -- even if the executor's fee is a deductible expense. Unless they are named as heirs, attorneys don't have a choice in the matter; any fees they collect are declared as business income and subject to income tax.#N#Read More: Can an Executor of a Will Be Responsible for the Deceased's Taxes?
The executor of a deceased person’s estate is a fiduciary, someone legally and ethically bound to manage assets in the best interests of another party. Like most executors, you are probably eager to do a good job and to take care of estate business in a timely fashion. Unfortunately, the obligations that appear urgent may in fact be less important than others you may not yet be aware of.
One example is paying bills. As executor, the deceased’s mail has probably already started coming to you, and that mail likely includes bills: medical bills from the last illness, utilities, credit card bills, and so forth. As a diligent executor, you may think you have to pay these bills immediately to keep the finances ...
As a fiduciary, not only are you obligated to communicate with the estate’s heirs as a business and legal matter, but doing so will also help preserve important relationships. As a Michigan probate attorney, I have seen many families in which suspicion and distrust grew because some family members couldn’t get information about how another family member was managing their loved one’s estate. Whether reasonable or not, this distrust often leads to permanent rifts in a family.
Avoiding this trap is simple. Talk to an experienced probate attorney before paying anyone, so that you will understand the priority of debts. An attorney can also assist you in estimating administrative expenses, as well as any payments that need to be made to the surviving spouse and/or children.
As a fiduciary, you are obligated not only to act in the best interests of the estate and its heirs, but to thoroughly document your actions. This seems obvious in the abstract, but in real life, it is easy to let things slip or to assume that because you have good intentions, everything will work out.
Once creditors are notified of the death, they have a limited amount of time in which to file claims. If they don’t file a claim within that time period, it is barred.
As executor, one of your primary duties is to ensure that you have identified and protected all estate assets. This includes everything from costume jewelry to real estate.
But if it looks like there won't be enough money in the estate to pay debts and taxes, get advice before you pay any creditors. State law will set out the order in which creditors get priority, and it's not always easy to figure out how to parcel out the money. The estate won't owe either state or federal estate tax.
More than 99% of estates don't owe federal estate tax, so this isn't likely to be an issue. But around 20 states now impose their own estate taxes, separate from the federal tax—and many of these states tax estates that are valued at $1 million or larger.
The estate won't owe either state or federal estate tax. More than 99% of estates don't owe federal estate tax, so this isn't likely to be an issue. But around 20 states now impose their own estate taxes, separate from the federal tax—and many of these states tax estates that are valued at $1 million or larger. If you will be responsible for filing an estate tax return with the state where the deceased person lived or owned real estate, you should get legal and tax advice. An estate tax return is not a do-it-yourself job.
Probate is easier in states that have adopted the Uniform Probate Code (a set of laws designed to streamline probate) or have simplified their own procedures. The estate doesn't contain a business or other complicated asset.
But you won't need probate if all estate assets are held in joint ownership, payable-on-death ownership, or a living trust, or if they pass through the terms of a contract (like retirement accounts or life insurance proceeds). The estate qualifies for simple "small estate" procedures.
Many executors decide, sometime during the process of winding up an estate, that they could use some legal advice from a lawyer who's familiar with local probate procedure . But if you're handling an estate that's straightforward and not too large, you may find that you can get by just fine without professional help.
Most or all of the deceased person's property can be transferred without probate. The best-case scenario is that you don't need to go to probate court, because assets can be transferred without it. This depends on the planning the deceased person did before death—you can't affect it now.