When someone passes away, their estate needs to be taken care of by a representative, or “executor.” This person is in charge of tying up loose ends and finalizing the affairs of the deceased. It can be a challenging and time-consuming task, especially for larger or more complex estates. For this reason, executors are typically entitled to some form of compensation. This may be a flat fee, an hourly rate, or a percentage of the estate value. In most cases, the deceased person will explain how they want their executor to be paid in their will, but if they don’t, it is up to state law and the probate court to decide.
Most states will allow a person to specify that they want their executor to receive a flat fee in their will, or they will state that the executor should be paid a reasonable amount of compensation. However, many will not outline any kind of compensation at all and leave the decision up to state law. The majority of the states use a “tiered percentage formula” or a flat percentage for the amount an executor can be charged.
In California, the executor fees are set up as a percentage of the estate value using a sliding scale. This means that the executor will get paid 4% of the first $100,000, then 3% of the next $100,000, and then 2% of the remaining value. In addition, the state allows co-executors and has a specific process for changing or removing executors.