Executor's Fee

[joeea]

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.

I agree with your siblings.

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

Many consider it a family obligation. Some don't.

Legally I am, of course, but does that make me a jerk or something?

Legally you are entitled to reimbursement for your work regarding closing the estate.

Perhaps some would feel you have done $15,000 worth of work. Many would not.

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.

Did you account for each hour of work as you accomplished it? Or are you just guessing? What hourly rate are you charging for work like "nagging"?

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

My Dad was executor of his sister's estate. I helped. He and I did all the work without expecting any compensation.

When the time comes that my Dad passes, I hope the executor will not expect a windfall.

 

[joeea]

depending of the family .... $1,500 and never talking to them again seems like a compelling deal

$15,000

 

[Newventurer]

It’s hard for sibling rivalry not to raise its ugly head - you have been singled out (the favorite, the oldest?) and that can be a bitter pill to swallow for those not wearing ‘the crown’

 

[LastOfTheBoomers]

My older brother was the executor for my moms estate - he was the obvious choice up to the point he moved 2,000 miles away. He included his trips back to deal with all the paperwork - but did not take the full allowable fee. None of us had a problem with that but it did make me think that having someone local is a good choice.

 

[Luck_Club]

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!

Having cleaned out my fathers house recently, and negotiating the sale. It took me a three day trip, and about 30 hours of phone time, and all I did was contract with an auction house and realtor. We lost a bit of cash on the clean out, but saved tons of time. Since I'm the only residual heir, I will not charge a fee as executor.

On another front I managed from a distance a bed ridden relative's life for over 40 months, which took nearly 60 nights away from home. I requested $1,000 a month for my time, and the residual heirs gave the impression I was being greedy, even though my statutory fee could amount to significantly more.

So your request to be comped for your time isn't unreasonable, but would be better handled through gifting by the other heirs.

 

[RunningBum]

If it was 200 hours, $75/hr seems like a lot. Of course we don't know the actual # of hours, just "hundreds". There were probably some out of pocket expenses too. I would certainly take those, and maybe take $25-30/hr for my work. Or in my case, if my brother took that (since he will be executor), I wouldn't feel the least bit put out. I might raise my eyebrows at $75/hr, but if it was stated that he would get 5%, I wouldn't say anything.

 

[Oz investor]

$15,000

depending on how the accounting is done in this case , i suspect the original poster has not been fastidious in extracting out of pocket expenses from the estate in a timely manner . ( so i suspect actual compensation for time taken will be rather low )

however even at $15k my response stands .

in my case i had ended up with two estates and i had to ad-hoc many affairs until the government decided it smelt money ... luckily i then hired a fastidious lawyer ( who probably cost a lot ) but the affairs were cleaned up quickly ( less than 3 years ) and all dots on the 'i's were precisely round ( which in my opinion was a freaking miracle ) , and i have no complaints about the decision to let him handle the situation ( which had so many bizarre twists i can't believe he ever finished it )

 

[hesperus]

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.

+1 That's right. It didn't make sense to be taxed when we could avoid it.
Also correct about inheritances bringing out the worst in people. I haven't spoken to my (half) sibling since then. It was a very eye opening and disheartening experience.

 

[Mdlerth]

I'll pass

I am the executor for my parents when they cross the River Styx.



But for the past ~2 years it's been my older brother doing the heavy lifting since he's the one with the medical POA. There was nothing in their wills about compensating him; I expect they never gave much thought to the possibility that they'd spend so long growing physically and mentally weak, with the consequent burden that has fallen on DB. He's the one who gets the calls from the doctors, deals with the nursing home, follows up on their Rxs, etc.



Discharging the estate won't be nearly complicated as what my brother has to do. Especially if M&D linger a few more years and their care whittles the estate to zero. After The Circle of Life runs its course, how could I accept a fee for a comparatively minor bureaucratic task when DB has been run ragged for years but receives no compensation?

 

[Souschef]

But for the past ~2 years it's been my older brother doing the heavy lifting since he's the one with the medical POA. There was nothing in their wills about compensating him; I expect they never gave much thought to the possibility that they'd spend so long growing physically and mentally weak, with the consequent burden that has fallen on DB. He's the one who gets the calls from the doctors, deals with the nursing home, follows up on their Rxs, etc.

My sister did the same for my mother. The only asset Mom had when she passed was her condo. It was sold, and I think the proceeds were about 70K. I once asked my sister how much was netted, and she said "enough to bury me", which was an odd comment.
However, she and my BIL did the heavy lifting, I feel they earned whatever was left.
Also, to keep peace in the family, I let the matter drop.

 

[Texas Proud]

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).

Good point on this one... in reality you are only earning $10,000 above what you would if you did not take the fee...


Never thought about that... but then again there are 6 kids in my family...

 

[calmloki]

When I was executor for my Mom it was a long slog - several years of dealing with all manner of odd bookworky stuff. On a couple occasions one or the other of the sibs asked for an accounting, which they were quite within their rights to do. Since all was in flux, some accounts closed, some ownerships changed, medallion guarantees and death certificates and transfers in various progress points it was a pain to give a full detailed accounting from a distance and added work to the load. I remember being quite sensitive to the requests and feeling that the fairness of my execution was being questioned when it really wasn't. It is a prickly time. My siblings are and were great and it was still a sensitive time for all. Perhaps you are reading things into the comments you heard that aren't there?

My fee, per instruction, was Mom's old Camry. Though i was joint with her on the title it was still a pain to deal with DMV.

 

[SheitlQueen]

Take the fee, you have earned it. Show your relatives the time that you put into things, and that you could have hired out a lot of that work, which would have cost them more money in the long run.

 

[RE2Boys]

I would lean toward not taking any executor fee for your time & effort as, I believe, within a family, each contributes their time & talent when needed. But I would absolutely reimburse myself for any out-of-pocket expenses, including travel if out-of-town travel was necessary. For most expenses, the bills were paid out of the estate's checking account, never my family's if I could at all avoid it.

In my case, my mother passed away one January and a sister three months later, I was executor for both estates. Found that my mother had a small life insurance policy from her employer where she had named me the sole beneficiary (about $6K). I considered that my executor's fee for both estates and never took one from my sister's estate, considered it all within the family. My mother's estate was relatively simple but had to deal with final tax return, inheritance tax return. No estate tax return needed as income was below threshold.

My sister's estate was another matter, she set up a trust through will and I was the trustee for ten years until liquidation. Lots of tax returns, investment decisions, transfer of real estate per will, etc. Always made sure I was reimbursed for out of pocket expenses but not for time and effort. Took three years to clear the estate and total ten years for the trust.

Oh, and very important, I made a full accounting to all beneficiaries of where every dollar went, at least yearly for the trust.

 

[jazz4cash]

I would take the fee. I might take a lessor amount if the other heirs were in need due to circumstances beyond their control or provided significant assistance. You've more than earned the fee doing things that preserved the value of the estate for the benefit of all the heirs. Once the estate closes don't be surprised if you are required to go back to work (for no compensation) because something slipped through the cracks and needs your attention.

 

[Dash man]

It sounds like you’ve earned the fee, but only you can decide if the possibility of a family rift is worth it.

 

[Gotadimple]

Whether taking the fee is a faux pas is different with each family. Transaction costs (postage, paper, etc.) are reimbursable. Your time is worth something as well. If this really bothers you, discuss it with your siblings. What is important is what is meaningful in your family.

 

[ERD50]

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

.... 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!

I don't think that what other people do is helpful to you. Each situation is unique.

... 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. ...

I'll suggest that it is better to find out earlier than later. Others may not have any idea how much work it is or isn't for you.

You could ask for some help. Maybe mention if the work is split evenly, you would not take any fee. Expect complete silence.

That could back-fire though. DW and I got 'help' from one sibling in settling my FIL's estate (MIL still living, so it wasn't a complete close-out), and we ended up having to get involved and fix almost everything he touched (no, don't just check the first box you think applies, actually ask questions and find out which is the right box to check! ) . It would have been easier to just do it right the first time. We politely declined any further offers of 'help'.

-ERD50

 

[dcoy]

Take the fee or at least a portion of it. I too am the executor for my parents estate. Its a complicated multi year affair with a variety of assets (buildings, raw lands, complicated legal structures, business practice, equities, bank accounts, insurance etc..). I took a flat $10K for the first 3 years, but may take another $10K if it continues to suck at least 80 hrs per year from me. I did get the blessing from my siblings, infact they insisted upon it. Good Luck!

 

[pb4uski]

I'll be executor of my Mom's estate when she passes. To my recollection there is no provision for a fee and I doubt that I'll take one unless my siblings offer one, which is possible and in that case would be a gift from them to me... but I will insist on being compensated for any out of pocket expenses.

In the OP's case, since there is a specific provision for an executor's fee (and that is not common in my experience) then presumably the decedent intended for the executor to get 5% off-the-top for their efforts in executing the estate.

 

[GalaxyBoy]

Thanks, all. Definitely a varying mix of opinions. I Googled this question and came up with a similar thread on another forum that went on for five or six pages. You'd think they were debating how to boil an egg!

I think ERD50 had a very good point:

I don't think that what other people do is helpful to you. Each situation is unique.

I'll consider you all's thoughts, and thanks again.

 

[HI Bill]

Sounds like you are well-deserving of the fee, but if taking it causes family strife, the after-tax portion of the fee may not be worth it (personal choice). To me, your relatives not wanting you to take the fee to which you're entitled for all of your hard work is showing their true colors, IMHO.

I'm going through probate, and am the sole heir, so no fee for me, but I've probably spend 100 hours so far, and am close to the finish line (only probate items were a house and a piano), so I know a little of what you are going through.

 

[MarieIG]

Was administrator for my mother's estate. There was only my father and I, so I certainly wasn't going to ask for any money. In fact, I didn't tell my father since my mother passed intestate I was entitled to a portion of the estate. I just transferred the assets over to him. Dad eventually added me to most of his accounts.

When my Dad passed, I was the only one entitled to the inherit, so the issue was moot.

I suppose if I had siblings, it would be a different story. If I had for example one other sibling that did a lot for the parent while alive, I would not take a fee. If my sibling was obnoxious, I would.


Expenses should be charged to the Estate, keep the receipts.

 

[Aerides]

OP when you brother has said to you "You don't plan to still take the fee do you?" - how have you answered him? Have you asked "if i do, since I've worked on this for weeks, is there still a concern?"

You say you don't think there would be an issue, but you're clearly a bit nervous. My sister and I ... there would be no chance for lack of understanding on something like this. I'd know from her face, and she mine.

It would seem that in a family where there is any chance of disruption, a 3rd party trusted executor would be preferred vs. one of the recipients of the estate.

 

[Katiek]

My sister was the executor for my parents estates, and she refused any fee even though the other sibling and I tried to encourage her to take one. She handled the paperwork for dealing with the lawyer and the banks/fund companies. But we all helped with tasks like cleaning out the house, selling furniture etc.

I've tried to find other ways to reimburse her for her time and effort (like covering costs when we go to a play) just to make sure she knows we don't take her time or effort for granted even though she won't take the fee. She'll let me do some small gestures of appreciation but nothing more than that.