When a family member or friend asked you to be the executor of their estate, you didn’t agree to it for the money. However, being an executor is a job – sometimes a very time-consuming, challenging one. That’s why the law provides for executor compensation.
Executors can decline to accept compensation. For example, if you’re a family member who’s already receiving a considerable inheritance, you may not want payment on top of that. Remember that executor compensation, unlike an inheritance, is considered income and therefore taxable along with your other income. Executor fees come out of the estate – not out of any particular beneficiary’s inheritance.
What does Texas probate law say?
If the deceased person had legal guidance when developing their estate plan, they would have included executor compensation in their will of at least the amount designated under state law. A probate judge ultimately has to approve the payment. Under Texas probate law, standard compensation is 5% of the “gross fair market value” of the estate.
What if you’ve been selected by a probate court to manage an estate for which there was no will (in which case you’d be known as the administrator)? What if there was a will, but it didn’t mention executor compensation? You can and should seek the compensation you’re due.
The same is true if you believe additional compensation is warranted to pay you for considerable time spent administering the estate, because you’ve had extraordinary challenges (such as dealing with battling relatives) or perhaps to reimburse you for your own expenses, such as travel. You can and should seek reasonable compensation from the probate court.
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