How Much is an Executor Paid?
The fee for an Executor varies from state to state, and is based on a percentage of the overall estate value (often 2-5% of the estate value).
The definition of "estate value" varies widely by state, as does the cost impact of any lawyers or accountants hired by the Executor.
The state law where the person lived and the Will is probated will apply in determining executor's fees. If there is real estate in more than one state, there may be ancillary probate proceedings in those states as well. So whether you live in Weston CT or North Salem NY, makes a difference.
Executor in Connecticut
In Connecticut, there is no set fee. In Connecticut, case law determines the factors which constitute a reasonable executor's fee. The factors are: (1) size of the estate; (2) responsibilities involved; (3) character of the work required; (4) special problems and difficulties met in doing the work; (5) results achieved; (6) knowledge, skill and judgment required; (7) manner and promptness in which the matter was handled; (8) time required; and (9) other relevant and material circumstances.
In addition, recent case law suggests that Connecticut probate judges believe that time is one of the most important factors in determining the executor's fee.
Executor in New York
In New York, the Executor fees are either set in the Will or are paid according to the law. SCPA §2037. They start at 5% on the first $500K and move down to 2% on amounts over $5M.
Who is the Executor Matters
Who serves as an executor will also make a big difference. For example, a spouse would want to serve for free (there is no advantage to taking an executor's fee since the fee would be taxable as income to the spouse).
If the spouse needed legal help, he or she would retain an attorney on an hourly basis.
If you request a friend to serve as executor at no charge, he might not accept the appointment.
A bank serving as executor will not take on an assignment unless paid.
If retaining a bank, be sure to pin down the duties and assets covered in the engagement to avoid surprises.
One way to ensure the bank is kept in check is to have a family member as co-executor. The family member should be able to remove and replace the bank as co-executor or permit the family member to negotiate the bank's fee.