After the death of a loved one, there is quite a bit of work to be done. Most of the financial work will be handled by the executor named by the deceased in their will or trust. These tasks can involve gathering and securing the deceased’s assets and household belongings, paying debts and taxes, filling court paperwork and more. As you can imagine, this can take a lot of time. As a result, one of the questions our Orange County estate attorneys are often asked is if an executor can be paid a fee for their work.
In most cases the answer is yes. As executor in Orange County, CA, you are entitled to receive an executor fee for your services. In many cases we advise our estate planning clients to either set a specified amount for the executor in their will or trust, or explicitly prohibit executor fees if they wish. However, if the will is silent regarding executor fees or the deceased dies without a will, then the executor fees are determined by state laws.
In some states, executor fees are a fixed amount and equal to a percentage of the final estate amount. But, in other states the executor is entitled to a “reasonable amount.” Since “reasonable amount” is subjective (and a potential hot spot for family squabbles!) we recommend that executors keep detailed records of the work they do on behalf of the estate. We always highly discourage executors from waiting until the last minute to attempt to piece together the services they perform. Memories can be faulty, and this opens the door to questions from beneficiaries. Be sure to document as you go.
Here’s what you should include in those records:
- Descriptions of the tasks performed.
- The amount of time dedicated to each task.
- An hourly rate for each task.
Lastly, it is important to remember that executor fees are considered income and are taxable.
Being an executor is an important job and can be time-consuming. Most of the time, the guidance of an attorney here in Orange County is necessary. Contact us to discuss your rights and obligations so that you can get through the process with as little stress as possible.