Estimated fee to be an Executor of an estate

[ER604me]

I'll be the Executor for my Mother's estate. My Father passed about 2 years ago. Is there a guide to what the fee structure is for dealing with an estate of about $3.5M? I have siblings but have been dealing with a lot of the issues (keeping track of finances for the last 4 1/2 years, maintain the house for them/her and buy groceries/visit 2-3 times a week). My siblings are not local but visit and help out 4-6 times a year.

 

[PaunchyPirate]

I'm sure you will be able to find some guidelines for compensation for being the estate executor.

However, everything else you mention about what you are doing NOW and for the last several years does not apply to that compensation. I would separate that thinking from the start. If you feel you should be compensated for what you've been doing the last 4 1/2 years, then that is a discussion you should have with your siblings now, before your mother passes, so that your compensation for care can be settled before the estate needs to be settled. Compensation for care should be separated from the compensation for doing estate settlement work.

 

[Whisper66]

Look to the specific will and state laws to find the guidelines. For example, your profile shows you live in Virginia. I found a couple sources online pretty quickly that offered the same guidelines. Here is one....
https://legalbeagle.com/8063196-virginia-rules-executor-estate.html
FWIW - I am current the executor of one of my parent's estate in Texas. I've chosen to not take any fee but do reimburse myself for all costs associated with my executor work.

 

[HarveyS]

Well, your attorney can tell you what a standard and customary fee would be in your state. Probably on the order of 1 - 1.5%. But, that does not mean you should take that. I would get together with my siblings and discuss the will/estate plan and the efforts everyone extended - you locally and their travels. I would schedule a meeting with them (with the lawyer to mediate) and debate with them what a reasonable executor fee would be. I'm thinking 1000's, not 10's of 1000's. Good luck. You are in a dicey spot and can ruin your relationships with your siblings very easily.

 

[Lewis Clark]

The laws probably vary by state, so check your state statutes.

When my wife was an executor in Florida a few years ago, she could charge the estate whatever she wanted, as long as it was "reasonable".

One thing to consider, if you are the executor and also an heir: the executor fee is taxable income, but inheritance is tax-free. This may influence how you choose what to charge as executor.

 

[ER604me]

I'm sure you will be able to find some guidelines for compensation for being the estate executor.

However, everything else you mention about what you are doing NOW and for the last several years does not apply to that compensation. I would separate that thinking from the start. If you feel you should be compensated for what you've been doing the last 4 1/2 years, then that is a discussion you should have with your siblings now, before your mother passes, so that your compensation for care can be settled before the estate needs to be settled. Compensation for care should be separated from the compensation for doing estate settlement work.

Thank you for the response. That's a good way to think of the effort. I have a very good relationship with my siblings but want to continue to be transparent with things so there is no ill will.

 

[ER604me]

Look to the specific will and state laws to find the guidelines. For example, your profile shows you live in Virginia. I found a couple sources online pretty quickly that offered the same guidelines. Here is one....
https://legalbeagle.com/8063196-virginia-rules-executor-estate.html
FWIW - I am current the executor of one of my parent's estate in Texas. I've chosen to not take any fee but do reimburse myself for all costs associated with my executor work.

Thank you for the link and reply.

 

[ER604me]

Well, your attorney can tell you what a standard and customary fee would be in your state. Probably on the order of 1 - 1.5%. But, that does not mean you should take that. I would get together with my siblings and discuss the will/estate plan and the efforts everyone extended - you locally and their travels. I would schedule a meeting with them (with the lawyer to mediate) and debate with them what a reasonable executor fee would be. I'm thinking 1000's, not 10's of 1000's. Good luck. You are in a dicey spot and can ruin your relationships with your siblings very easily.

Thanks for your response. I don't have an attorney involved. As mentioned above, I need to separate executor efforts from current maintenance efforts. I think settling the maintenance costs prior to the executor effort will make things clearer.

 

[Teacher Terry]

I can’t imagine charging a fee to friends let alone my parents for helping them and some of my helping my friends has lasted for years. I let them buy me lunch occasionally. I don’t even take gas money.

I helped my parents for decades while my siblings barely lifted a finger. Helping people should come from the heart out of love. Charging a executor fee is reasonable.

 

[enjoyinglife102]

Some real good responses to consider. As someone who has previously been an executor of a parent's estate, thoughtfully consider how your siblings will react to you taking a fee. Money has a way of bringing out the worst in people. I chose not to take a fee to be certain no possible sibling animosity could occur.

I also provided care and support the last few years without any compensation. I looked at it as I'm glad I was able to do so. Since nothing was discussed during those years and little help was offered, I would imagine seeking anything after the fact could also create problems.

 

[PatrickA5]

I understand how you feel on this subject, but I'd keep any executor fee minimal. It sounds like you'll probably inherit quite a bit anyway.

I did my dad's finances, trips to doctors, grocery shopping, ER visits, house repairs - you name it - for his last 15 years. DB lived out of town and would drive down (4 hours) when dad was in the hospital, but that was about it. I took care of everything financial dealing with the estate. I guess I could have charged some kind of executor fee, but felt it wasn't worth DB's hurt feelings. He needed the money. I didn't.

 

[iloveyoga]

I always did all my work for free for my in-laws and my Dad. My brother who is an attorney and helped with a few things also did not charge the estate. Now I am talking smaller estates but honestly I never thought of taking a fee. I help my Mom with her investments and do her taxes. I do charge for the tax software fee and then she always buys me lunch at tax time

 

[ivinsfan]

I'm not clear on what you are asking here. You mentioned the things you have done/ are doing for your Mother and other sibs are not doing as much. Did you want to be compensated for that? And now you mention maintenance cost? It does sound like you want something financial. Any clear out of pocket costs you incur caring for mom should be payed when they occur. IE gas, postage, if that's the way you want to go.



You can simply have groceries delivered and pay a delivery fee added to the food bill. 4 to 6 times a year from other sibs sounds like a pretty good commitment to me.


You even 1% of a 3.5 million dollars is not a small amount....

 

[Sunset]

OP - glad to see you understand, the costs of taking care of parents when alive, is different than the executor costs and fees (if any).

Work on getting paid now for out of pocket expenses you feel you deserve for taking care of your parents.

As executor, I've done a couple of estates of relatives, it's a LOT of work, so I make sure I get repaid for expenses like filing fees, taxes, property expenses, etc..

I never charged an "executor fee" for doing the "job" , and I don't even charge for gas. So basically I work for free. Since all the beneficiaries were family, it seemed the right thing to do.

I'm actually surprised at the high compensation for Virginia of just over $83 for a $3.5M estate.

 

[Car-Guy]

I just kept track of the final expenses (travel, lawyer fees, funeral expense, final bills, etc.) and charged them to the estate. I didn't charge anything for my time. YMMV

 

[OldShooter]

My mother, unprompted, added language to her will specifying that I would be paid a fee as executor. I don't remember the number, it was not large, but because it was in the will there was no discussion or pushback from my siblings.

An exorbitant fee specified in a will might raise questions of undue influence, but something reasonable should not.

I agree with others that the executor fee has nothing to do with whatever support you have been providing. If your mother wants to compensate you for that, it too should be in the will. In that case, the change should be between her and her attorney without your presence or participation. The attorney can then testify, should it come to that, that she made the change of her own free will and not as a result of influence from you.

 

[youbet]

Compensation for care should be separated from the compensation for doing estate settlement work.

+1 Absolutely! The biggest family feuds I've ever seen originate from one sibling expecting some compensation for caring for parents after the parents have passed. I do think that children that provide care should be compensated (if there are resources to do so) but that compensation should be done with complete transparency and in real time. Definitely not after the death of the parents or be mixed with executor fees/expenses.

 

[street]

There was an amount when I went through that with my parents. The lawyer told me what I could legally have in compensation but didn't take anything for that but did get compensated for my out-of-pocket expenses which needs to be tracked/receipts/documented for legal purposes is what I was advised to do.

 

[GalaxyBoy]

I was executor for my dad’s estate a few years ago. His will specified a percentage for the executor’s fee, and I did take it. My brother was the only other beneficiary and he was Ok with that. The fact he was an accountant probably had something to do with it. He lived on the other side of the country so it wasn’t practical to have him do it.

Anyway, it turned out to be quite a lot of work even though there was a will and nothing was contested. Add to that the fact that I became personally liable, and I don’t think it unreasonable at all.

 

[RobbieB]

I would keep a log of hours worked as well as the hard receipts. You might be surprised at how much work is involved.

Then decide what proper compensation is due.

 

[Car-Guy]

When my FIL passed on, one of the kids "took" on the role as executor which was ~okay with the other kids/heirs... I remember him (the executor) saying he'd keep a detailed spreadsheet of all expenses and share it with everyone involved. And when it was all done he'd split the remaining amount evenly among the kids, as the will specified... We never saw a spreadsheet but my DW did get a chuck of the estate... Was it equal? We will never know.

Moral: If you are going to be an executor, especially if there is a written will involved, be as open and transparent as possible.

 

[GalaxyBoy]

I had no idea what I was getting into. Get an EIN number from IRS, open a checking account for the estate, move his money into it, decide where to park extra cash for a year, do his taxes, chase down the various life insurance policies, clean out the house, distribute the possessions, decide what to do with what nobody wanted, contract with a realtor, deal with contractors to ready the house for sale, sell the house, appraise and sell his coin collection, wait a year to distribute the cash, prepare the accounting of the estate for the county (to the penny), etc., etc. It adds up!

 

[RetMD21]

I'll be the Executor for my Mother's estate. My Father passed about 2 years ago. Is there a guide to what the fee structure is for dealing with an estate of about $3.5M?

The work involved and the value of the estate are not necessarily related. I would suggest getting an attorney involved now. There may be opportunities for optimization.

 

[SALTedOut]

I see this as a few different question.

Q1. I spend my money on things like groceries, utilities, medical, etc. for my parents.

A1. For things like this I think it completely reasonable to be reimbursed from your parents, assuming they have the funds to reimburse you. Alternatively, if they don't, I think its reasonable for you to accumulate receipts and split the costs with your siblings.


Q2. Reimbursement for time spent doing the above.

A2. IMO, I'd never ask or accept money from my parent or my siblings for this. If they occasionally wanted to invite me to dinner or something like that fine. We do that for each other anyways.

Q3. Fee for being the executor of their estate.

A3. Again, IMO, no way. Now, being reimbursed for actual out of pocket expenses like filing fees, attorney fees, etc. is completely acceptable and should probably have been paid by the estate in the first place.


Personally, I consider this my repayment to my parents for the 18 years of direct care (everything from wiping my butt to driving me to high school football games) they did for me, the college they paid for, and then the next 40+ years of invites to holiday dinners, family vacations, etc. They never asked me for reimbursements, much less an administrative fee, for any of that.

 

[MC Rider]

I am the designated executor for my Dad who turns 87 next months. Not looking forward to the job. May he live forever.