Executor's Fee

[GalaxyBoy]

I've posted several times over the last year that I'm the executor of my DF's estate. The estate is worth in the neighborhood of $300k and as one of three children I will inherit 1/3 of that. As I believe is often customary, the will provides for an executor's fee - in this case, 5%.

I'm getting a vibe from my siblings that I shouldn't be so selfish and take the fee. Not in so many words, and we all get along well, but the message is clearly there. For example, DB has asked me numerous times if I "still" plan to take the fee.

When I spoke to the county about the estate account they also asked if I planned to take the fee. Of course, they don't have a dog in that hunt; they're just asking in the context of reminding me not to forget anything in the final accounting. But that tells me it might not be uncommon for a family member to forgo the executor's fee.

Am I an outlier in thinking that I am entitled to the fee and I should take it?

Legally I am, of course, but does that make me a jerk or something? The money won't make me or break me at this point but I've spent hundreds of hours doing everything from cleaning the house, negotiating the sale of the house, organizing repairs on the house, selling the car, selling a coin collection, minding various bills, bird-dogging payment of insurance benefits, nagging the assisted living facility for the refund due, checking for lost money, filling out paperwork related to his last pension payment, etc., etc., etc. Dang, I feel like I earned that money! I had to do most of this myself simply because I was the only one living nearby, so it's not like the others didn't want to help; they just couldn't.

I'm just wondering what most people do in this case, and I figure there must be others here who have gone through it.

Thanks, all!

[Walt34]

In my case (I was executor for my mother's estate) the will specifically said I would serve without compensation so I knew that going in. But you're right, it is a lot of work, and in my case a lot less work than yours because all of the assets were financial and relatively simple to handle. And I saw it as "The last thing I could do for Mom".

But you had to do a lot more work than I did. There wasn't even a car to sell, let alone any real estate.

I can't tell you what I'd do, but I can suggest that if the siblings show any resentment, take time to explain what work you did as explained in your post and hopefully they will understand if you do decide to take the fee. FWIW, I think you earned it. But I'm not your brother either.

[RobbieB]

Take the fee.

You've spent "100's of hours" which I call 200 as it's plural...

So 5% of 300,000 is $75/hr. You are probably out of pocket too.

Once you have the dough and have settled on "what you were due" you can split the remainder with the "disgruntled" and cheer them up.

[38Chevy454]

I did not take any fee for my parent's estate. I did have one sister that did a lot to help with things, one other sister that was essentially incapable and my sister and I preferred the other sister to just stay away and out of our work. All three of us kids lived out of the state. I was working at the time and it required burning vacation time and travel trips. Same for my sister that helped. Estate was split 1/3 each equally.

In your case you are right that it is a lot of time consuming work. Also right in that you can legally take a fee. In my case I only covered expenses for myself and sister, no labor charge so to speak. In the end, my sister and I each did approx similar amounts of work. So I only did about half of what you are doing. Took me about 2.5 years to clear out everything and close the estate out.

It's up to you, how much does not have to be full 5%. Ask your siblings what they think is fair for your efforts? Have they given any figures? At a minimum you should be reimbursed for any expenses you incurred. That can also include mileage on your vehicle, postage fees, copying fees, legal fees, food, and whatever else that may have been money out of your pocket.

[Bamaman]

I took no compensation for being executor on my parents' estates. My father's will Didn't require probate and all I did was rollover his joint interest in the house to my mother. My mother's will had to be probated only because she still owned the house. Her business was simple, and I just had to do income tax returns for her and the estate separately.

But my sister devoted 5 years of her life taking care of my parents and coordinating their household and doctors visits. Doing a little paperwork is just not doing too much.

[nwsteve]

Suggest you separate the out of pocket costs including mileage from the "fee" element. MHO, you should be "whole" before division. After recovery of costs, the payment of a "fee" if a mater of personal choice. I like the suggestion up thread of sharing the amount of time and tasks you have had to invest and ask your sibs what they think is fair.

[Souschef]

In a sense, I had it easier. I was the executor for my late wife's estate and QTIP trust.

We had no children and she had no siblings, so I was her sole heir.
There was a provision in the trust that it fell below a certain amount the trust could be dissolved. Well. I took my 5% just to help that along, as I had to file 1041 and 541 and K1 forms every year. It took me from 2005 to 2014, but i did it.

[97guns]

I was the executor for my fathers estate also and could have taken 2% of around 1.6mil but opted not to, there was no discussion of it with my other 2 siblings and they wouldn’t have even known if I took it. They didn’t show their true intentions because they didn’t know but their greed was shown in areas that they were aware of, estates seem to bring out the worst of people and to this day I can never forget my eldest brother for his actions.

[Souschef]

Quote:

Originally Posted by 97guns I was the executor for my fathers estate also and could have taken 2% of around 1.6mil but opted not to, there was no discussion of it with my other 2 siblings and they wouldn’t have even known if I took it. They didn’t show their true intentions because they didn’t know but their greed was shown in areas that they were aware of, estates seem to bring out the worst of people and to this day I can never forget my eldest brother for his actions.

It is sad, but as Ben Franklin once said, " To know the true nature of a person, inherit with them"
So sad, but true.

[harley]

Quote:

Originally Posted by nwsteve Suggest you separate the out of pocket costs including mileage from the "fee" element. MHO, you should be "whole" before division. After recovery of costs, the payment of a "fee" if a mater of personal choice. I like the suggestion up thread of sharing the amount of time and tasks you have had to invest and ask your sibs what they think is fair.

I agree on being made whole. Other than that I wouldn't take the fee. Just my opinion.

[97guns]

Quote:

Originally Posted by Souschef It is sad, but as Ben Franklin once said, " To know the true nature of a person, inherit with them" So sad, but true.

My father and eldest brother had a very strained relationship, it wasn’t until he was sickly that my brother warmed up to my dad again. In fact my dad wanted to leave him $20k cash and it was me that made my dad rethink everything and make it an even 3 way distribution.

To me blood is thicker than any amount of money but most don’t see it that way, I was blessed enough to have retired 6 or 7 years before my fathers passing and was able to spend a lot of fired time with him

[Texas Proud]

To me it makes a difference in how much work you have to do... if you are putting in hundreds of hours and siblings do little to nothing I would take the fee...


If it were really simple estate and not much time then either take some or none...



I am in the process of starting to liquidate some of my mom's assets... I will have to get them to some place to get them apprised and sell them... this will take some good amount of time... I will be charging.... now, I also do all my mom's bills and mail, but do not charge for that since the amount of time is not really that much...

[gcgang]

You are certainly entitled to the fee, you've EARNED it.

But is $1,500 (5% of $300,000) worth causing rifts w your family?

[Scuba]

Quote:

Originally Posted by gcgang You are certainly entitled to the fee, you've EARNED it. But is $1,500 (5% of $300,000) worth causing rifts w your family?

I agree with this - you deserve the fee for all the work you did, but if it were me, I would submit a full accounting of any reimbursable expenses to your siblings so they know what you’re being reimbursed for, and forget the fee. Not that you don’t deserve it, but it sounds as though your siblings don’t think you should take the fee. If you can give it up and not hold it against your siblings, it sounds like it would keep the peace.

[Accidental Retiree]

Quote:

Originally Posted by gcgang You are certainly entitled to the fee, you've EARNED it. But is $1,500 (5% of $300,000) worth causing rifts w your family?

$15,000 is 5% of $300,000.

“Numbers is hard.”

[GalaxyBoy]

Thanks for the feedback so far. Just to be clear, I don’t expect this will cause any rifts regardless of whether I take the fee or not, and there haven’t been any complaints. I’ve had a few minor expenses such as postage, copying and office supplies but not enough to worry about. I guess I’m just wondering if taking the fee is considered a faux pas similar to, say, stiffing the waiter on a tip. Sounds like it would be to some, maybe not to others.

[GalaxyBoy]

Another thing I need to consider is the fact that an executor’s fee is taxable, which has implications for the amount of my traditional IRA I might want to convert to Roth. Others might need to consider this in relation to ACA subsidies, although I don’t.

[pb4uski]

I was guardian for my great-aunt for about two years and also her executor. There was a lot of work in selling various individual equity positions that she had, determining her basis, preparing two tax returns, negotiating ith the nursing home on billing errors, arranging for Medicare D and Medigap insurance, paying monthly bills, making funeral arrngements, etc. I was not an heir but my aunt was one of two principal heirs.

My aunt insisted that I charge a fee. In prepared a list of the various major things that I did and an estimate of hours spend and costed it out at different rates ranging from $35-$80/hr depending on the complexity involved. I'm sure that I underestimated on the hours but that was fine as my main motivation for serving was to help my great-aunt and aunt. It turns out that the total was a little less than 5% of the estate.

Technically, what I received was a gift from the two main beneficiaries to me so no tax implications.

[Newventurer]

Take the fee and donate it to a charity or cause that your Father would have approved of and let all interested in on the plan.

You get the satisfaction (tax deduction?) of being compensated for your efforts and controlling where the donation gets distributed, and if done in your Father’s name, a legacy for him.

[audreyh1]

That’s true - the fee is taxable - ordinary income tax rates. $5000 of the fee you would be paying yourself out of your otherwise tax-free inheritance and now becomes taxable.

Mileage, paperwork and postage costs, etc. can be reimbursed from the estate as expenses (not taxable).