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Reasonable compensation

35

Percentage formula

11

2.5

2

5

1

2

1

When an individual has deceased, an executor serves as the personal representative of the decedent by sorting out their finances and ensuring that all debts and taxes are paid and adequately distributing what is left over to the heirs as defined in their will. Executor services usually last between one to three years, and how much they will receive is dependent on several factors, including what is dictated by the decedent’s last will and testament, and most important for the purposes of this article, with state law.

Some states use reasonable compensation to determine executor fees, meaning the probate court determines compensation. Typically, the probate court will find executor fees reasonable if it aligns with what people have received in the past as compensation in that area. This notion means that if executor fees were typically 1.5%, then 1.5% would be considered reasonable, and 3% may be unreasonable. However, the court may also take other factors into account, such as how complicated the estate is to administer. Many states use reasonable compensation to calculate executor fees, however other states have created their own statutes. These statutes are as outlined below:

Arkansas fees cannot exceed: 10% of the first $1,000, 5% of the next $4,000, and 3% of the rest.

California uses this formula: 4% on the first $100,000, 3% on the next $100,000, 2% on the next $800,000, 1% on the next $9,000,000, 0.5% on the next $15,000,000, and for all amounts above $25,000,000, remaining executor fees in California are to be a reasonable amount as determined by the court.

Iowa fees cannot exceed: 6% for the first $1,000, 4% for the next $1,000-$5,000, and 2% for remaining amounts greater than $5,000.

Kentucky executor fees should not exceed 5%.

Maryland fees cannot exceed: 9% if less than $20,000 and $1,800 plus 3.6% of the excess over $20,000.

Missouri uses this formula: first $5,000 is 5%, next $20,000 is 4%, next $75, 000 is 3%, next $300,000 is 3.75%, next $600,000 is 2.5%, and greater than $1,000,000 is 2%.

Montana uses this formula: first $40,000 is 3% and greater than $40,000 is 2%.

Nevada uses this formula: first $15,000 is 4%, next $85,000 is 3%, and greater than $100,000 is 2%.

New Jersey uses this formula: first $200,000 is 5%, $200,001-$1,000,000 is 3.5%, and greater than $1,000,000 is 2%.

New York uses this formula: first $100,000 is 5%, next $200,000 is 4%, next $700,000 is 3%, next $4,000,000 is 2.5%, and remaining amounts greater than $5,000,000 is 2%.

North Carolina executor fees should not exceed 5%, therefore reasonable compensation is often used.

Ohio uses this formula: first $100,000 is 4%, $100,001-$400,000 is 3%, and greater than $400,000 is 2%.

Oklahoma uses this formula: first $1,000 is 5%, next $5,000 is 4%, and remaining amounts greater than $6,000 is 2.5%.

Oregon uses this formula: first $1,000 is 7%, $1,001-$10,000 is 4%, $10,001-$50,000 is 3%, and greater than $50,000 is 2%.

West Virginia uses this formula: first $100,000 is 5%, $100,001-$400,000 is 4%, $400,001-$800,000 is 3%, and remaining amounts greater than $800,000 is 2%.

Wyoming uses this formula: first $1,000 is 10%, $1,001-$5,000 is 5%, $5,001-$20,000 is 3%, and remaining amounts greater than $20,000 is 2%.

State | Executor Fee Calculation |
---|---|

Alabama | Reasonable compensation |

Alaska | Reasonable compensation |

Arizona | Reasonable compensation |

Arkansas | Reasonable compensation |

California | Percentage formula |

Colorado | Reasonable compensation |

Connecticut | Reasonable compensation |

Delaware | Reasonable compensation |

Florida | Reasonable compensation |

Georgia | 2.5 |

Hawaii | Reasonable compensation |

Idaho | Reasonable compensation |

Illinois | Reasonable compensation |

Indiana | Reasonable compensation |

Iowa | Reasonable compensation |

Kansas | Reasonable compensation |

Kentucky | Reasonable compensation |

Louisiana | 2.5 |

Maine | Reasonable compensation |

Maryland | Reasonable compensation |

Massachusetts | Reasonable compensation |

Michigan | Reasonable compensation |

Minnesota | Reasonable compensation |

Mississippi | Reasonable compensation |

Missouri | Percentage formula |

Montana | Percentage formula |

Nebraska | Reasonable compensation |

Nevada | Percentage formula |

New Hampshire | Reasonable compensation |

New Jersey | Percentage formula |

New Mexico | Reasonable compensation |

New York | Percentage formula |

North Carolina | Reasonable compensation |

North Dakota | Reasonable compensation |

Ohio | Percentage formula |

Oklahoma | Percentage formula |

Oregon | Percentage formula |

Pennsylvania | Reasonable compensation |

Rhode Island | Reasonable compensation |

South Carolina | Reasonable compensation |

South Dakota | Reasonable compensation |

Tennessee | Reasonable compensation |

Texas | 5 |

Utah | Reasonable compensation |

Vermont | Reasonable compensation |

Virginia | Reasonable compensation |

Washington | Reasonable compensation |

West Virginia | Percentage formula |

Wisconsin | 2 |

Wyoming | Percentage formula |