If you are involved in a probate process and serve as the executor or administrator of an estate you know how time-consuming, difficult, and stressful a task it can be for you.  Acting as executor/administrator is often a thankless job that can quickly turn contentious depending on the personalities of the heirs.  Regardless of the overall situation, according to Illinois law, every executor or administrator is entitled to receive a reasonable fee as compensation for their time and services to the estate and the heirs.

The compensation offered is referred to as an executor/administrator’s fee.  The amount of the fee largely depends on the circumstances, the work to be done, and the going rate in the county where the estate administration is taking place.  To determine a fee for a specific estate, the executor/administrator should discuss this issue early in the process with an experienced probate attorney who is local to the county.  What is considered a reasonable fee will vary from state to state, county to county, and even estate to estate, depending on the complexity of the administration.

Sometimes the Will document itself will state specifically what the fee is or how much the executor should be compensated.  However, that is not the norm because over time the going rate changes with inflation and other factors.  Typically, executors are compensated through one of three popular and recognized methods:

  1. Percentage of the estate: 1% to 5% of the gross estate value
  2. Hourly Rate: the executor keeps track of their time.
  3. Flat fee: a lump sum that is agreed upon.

If you are serving as an executor, always act like everything you do will have to be explained to a judge.  If there are disputes from heirs or beneficiaries, the executor will need court approval for compensation.  The executor must prove the work done and where every dollar of the estate goes, whether it be to creditors, heirs or executor fees. Ultimately, if contested, the probate judge has the final say on what is and what is not a reasonable fee.  Lean on your attorney to recommend a rate, but remember, the fee received will be considered taxable income.

An executor does not have to charge the estate and can waive their right to compensation.  This can be done during the probate process.  However, I never expect an executor to administer an estate for free, but I do let it be their choice.  Overall, when an executor is also a beneficiary, more times than not, they do not charge the estate a fee.  However, I have had many beneficiaries/executors over the years tell me they wish they had charged a fee once it was all said and done.  I always counsel my clients to keep track of their time and when they get to the end of the administration, add up the hours, look at the amount of time spent, and then decide whether to take the fee.

Whether you decide to charge a fee or not, you must have transparency and communication. You should make sure to discuss compensation expectations with beneficiaries at the beginning to avoid any potential conflicts.  In some instances, an executor starts out not charging a fee, but then family members become contentious, questioning everything (which causes more work and time involved) and then the executor starts to charge.  You do not want to be in that situation.

Remember, there is always the option to hire a professional to assist in your executor/administrator duties.  Commonly, a financial advisor or attorney can fill this role. This will be the most expensive way to administer an estate, but when there are problematic heirs, sometimes it is unavoidable.  Expect to pay fees (out of the estate’s assets) based on their standard rates, which will be higher than the going rate for an executor/administrator.

If you are the executor or administrator of an estate, while compensation is allowed, it’s crucial to prioritize fulfilling your duties faithfully and acting in the best interest of the estate and beneficiaries.  It is always recommended to seek legal advice to ensure compliance with local laws.  Follow the process and communicate.  If you need any help, we can be on your side; contact us for information on representation.