EXECUTOR FEES

How much does one receive for serving as executor?

In Oregon, the base executor fee is roughly 2% of the value of assets passing under the will, and roughly 1% of assets passing outside the will. See Oregon Revised Statute 116.173. For example, if the decedent owned a $1 million home (which passes under the will) and $700,000 of IRAs and life insurance (which pass outside the will), the fee would be roughly $27,000. The fee is not reduced by the decedent’s debts or mortgages. If the executor performs extraordinary services, additional compensation can be requested. The executor fee is not always commensurate with the amount of work involved. For example, very little work is involved in administering the estate of an elderly individual whose only asset is a $1 million brokerage account. On the other hand, countless hours might be needed to administer a $200,000 estate involving numerous creditors, delinquent tax returns, insufficient cash, hard-to-sell real estate, substantial clean up work, beneficiary disputes, etc.

Washington’s executor fee is not a fixed percentage. Instead, the executor is entitled to a “reasonable” fee. In general, reasonableness for an executor fee is based on the same criteria as attorney fees, including time required, difficulty, requisite skill, amount customarily charged in that community, size of estate, experience, etc. See RCW 11.68.100(2) and Rule of Professional Conduct 1.5(a).

6 thoughts on “EXECUTOR FEES

  1. I am named as a co-trustee along with my sister. We may act jointly or independently. I am almost done distributing the assets from my mom’s estate which was a trust. I have been handling my mom’s finances for years and was somewhat familiar with the assets. Distributing the assets involved liquidating a brokerage account, seven other independent mutual fund or insurance plans, reporting on the status of a property investment, itemizing the contents and value of a safe deposit box (which included some gold coins), transferring title of a time share into my sisters name, and justifying advances to both me and my sister, in an asset summary sheet. I am trying to determine the “reasonable fee” I can charge the estate for my services. I have 104 hours involved. It seems that I have been functioning as an executor but I don’t know how that differs from a “trustee” in legal terms. Your feedback would be very helpful. Mom lived in Grants Pass, Oregon when she died and had an estate valued at about $500,000.00, none of which was real estate to be sold. It was all in equities,savings, insurance, or other tangible assets. Thank you.

    • Richard,

      Reading between the lines, it appears you have done all of the work and feel you deserve a larger trustee fee than your sister. I tend to agree with you. There are really two issues. First, what is a reasonable trustee fee, and second, how is the fee divided between you and your sister?

      Under Oregon law, the personal representative of a probate estate is automatically entitled to a fee of roughly 2% of the gross estate. Additional fees are allowed for extraordinary services. However, the Oregon uniform trust code is not nearly so specific. ORS 130.635(1) provides: “If the terms of a trust do not specify the trustee’s compensation, a trustee is entitled to compensation that is reasonable under the circumstances.” This is not much help.

      It sounds like your services are analogous to those of a personal representative of a probate estate, and that 2% (or about $10,000) might be a reasonable fee. If you paid yourself $50 per hour, you would end up with about $5,000. Aside from the 104 hours of services, you have legal responsiblity for the trust assets, which warrants a fee by iteslf. I think a reasonable fee is somewhere in the $7,000 to $10,000 range, and that most of it should be paid to you. Ideally, co-trustees reach an agreement on how to allocate the fee. If they cannot agree, you can always petition a court to determine the appropriate fee and how it is allocated. That can be expensive and contentious, but sometimes it is a necessity.

      Dave

      • Hi Dave,

        Thank you very much for the insight regarding my question on executor fees. Hopefully, I can reach an agreement with my sister as to what constitutes a reasonable fee. If I cannot, I will contact you for your services.

        Kind Regards

  2. My Mother died in December 2012. My sister is thought to be the executor. She initially said my Mother’s attorney indicated there was no will, to his knowledge. Less than a week after my Mother’s death my sister now says there is a will. Apparently she found it. Is she obligated to provide me and my brother, supposedly also an heir to on-third, with a copy of the will and if so is there s deadline.

    I have requested to be given, or at least see, a copy of the will. My Mother had NUMEROUS possessions that will require an immense amount of time to sort through.

    Thank You

  3. This whole executor fee issue leaves a huge sour taste in my mouth and the foundation as to why relationships between siblings fall apart during probate and fights begin. Why does a family member, or fellow sibling, feel they are entitled to compensation for wrapping up a family member’s affairs? Especially when they benefit from the estate as well? If I was named executor of my parent’s estate I would gladly carry out my responsibilities, most of which are handled by an attorney and CPA anyway, and not deny my siblings 2% of the estate. In my case, my older brother is the executor and is very well off financially. I, however, am unemployed and lost everything during the real estate bust. I am more than capable of doing all or any part of the executor duties. And really, one makes it sound like there is soooo much to do. The fact is, most attorneys and CPAs do it anyway. But because he was named executor he insists on doing it all and wants the full 2%. He also believes that all the work he did around my parent’s house, before their death, supports this right (even though we all shared equally in these chores). I feel he should waive his right to this fee and have been told that most siblings who are executors do so. I’m sorry, but what a lousy law. I bet it’s broken up a lot of families and about to do the same with mine.

    • Randy,

      You are correct that the executor fee frequently instigates spirited discussions among family members. Personally, I think I would waive an executor fee if asked to administer my father’s estate.

      Whether the fee is earned depends on the circumstances. If the decedent owns real estate which needs to be cleaned up, maintained, repaired and sold, the 2% fee is reasonable. If the other siblings do some of the work, however, an adjustment is appropriate (although the law does not require this). The same might be true if the executor must wind down and sell a business, deal with contentious creditor claims or burn up lots of time on estate matters. I have seen cases in which the executor had to take a week of vacation to take care of things. On the other hand, if the decedent’s only asset is a $1M bank account, a 2% fee (i.e., $20,000) is a huge windfall. So it depends.

      In your case, the most equitable arrangement would be for your brother to waive the fee provided you share the burdensume tasks. I would estimate that 60% – to 70% of executors in your family’s circumstances waive the fee. The percentage is less, however, if the siblings are estranged from each other or have issues.

      Executor fees may be an irritant to some family members, but they are usually not a deal breaker. A more serious problem occurs when the decedent makes loans to certain of the children, who then contend the “loans” were completed gifts. The same might be true if a child provides financial asssitance to a parent. It is even worse when children arm-twist parents in fragile health to provide benefits their siblings do not share. Or when children want to live rent free in the decedent’s house both before and after death. Or when the decedent adds a child’s name on a sizable bank account (so that the child can help manage the finances), and the child then contends (after the decedent’s death) that the decedent intended the entire account to go to that child. The list goes on and on.

      Dave

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