When someone passes away and their estate goes through probate, the executor is responsible for handling a long list of tasks. They locate assets, pay debts, manage paperwork, work with attorneys and accountants, and often coordinate the sale of property. It can be a significant amount of work that lasts many months.
A common question families ask is whether the executor is allowed to be paid, especially if that person is not inheriting anything from the estate.
The short answer is yes. In Pennsylvania an executor is allowed to receive compensation for the work involved in administering the estate.
Is there a set executor fee in Pennsylvania?
Pennsylvania law does not set a fixed percentage for executor compensation. Instead the law states that the executor is entitled to a reasonable fee based on the services performed.
Because there is no strict rule, many estate attorneys and probate professionals rely on commonly accepted guidelines to determine what is reasonable.
Common executor fee guidelines
Although not legally required, many estates use a sliding scale similar to the following:
• About 5 percent of the first $100,000 of the estate
• About 4 percent of the next $200,000
• About 3 percent of the next $700,000
• About 2 percent of amounts above $1 million
These percentages are simply a reference point. The final amount can vary depending on the complexity of the estate and the amount of work involved.
What affects how much the executor is paid?
Executor compensation often depends on the responsibilities involved in settling the estate. Some estates are relatively simple while others require a great deal of coordination.
Factors that can affect the fee include:
• The size of the estate
• The number and type of assets involved
• Whether real estate needs to be cleaned out and sold
• Time spent managing financial accounts and paperwork
• Filing tax returns for the estate
• Working with attorneys, accountants, and other professionals
• How long the estate administration takes
For example, an estate that includes a home that needs to be cleaned out, prepared for sale, and listed will require more time and oversight than one that only includes a few financial accounts.
Do beneficiaries need to approve the executor fee?
Executor compensation must be disclosed to the beneficiaries of the estate. If beneficiaries believe the amount is unreasonable, they can raise concerns during the estate administration process.
In many cases the executor fee is discussed with the estate attorney and agreed upon by the beneficiaries to avoid misunderstandings.
Are executor fees taxable?
Yes. Executor compensation is considered income to the executor and must be reported on their personal tax return.
What if the executor is not an heir?
It is very common for an executor to receive a fee when they are not inheriting from the estate.
Acting as executor can involve months of administrative work, coordination with professionals, and managing the estate’s assets.
For that reason, compensation is generally considered appropriate when someone takes on this responsibility.
A note about real estate in an estate
One of the most time consuming parts of settling an estate is often dealing with real estate.
Preparing a home for sale, coordinating clean outs, and managing the listing process can add another layer of complexity for an executor.
If you are navigating the sale of a home as part of an estate in Delaware County or the surrounding area, working with professionals who understand both probate and real estate can make the process much smoother.