If you are an executor of someone’s estate, you should be aware of the costs associated with administering an estate. These include filing taxes, paying bills, maintaining records, and other administrative tasks, which are either paid by the executor and then reimbursed through the estate or paid directly via the estate.

However, there’s another cost to consider: Your time and effort that’s being taken up by settling the estate. As such, an executor is entitled to compensation for their work, and that compensation comes directly from the estate.

What are the Executor Fees in Texas?

According to the Estates Code, an executor in Texas is entitled to up to 5% of the estate’s total financial transactions.

For Example:

If an executor has to settle an estate worth $250,000 - if they do their duties correctly, and honestly are entitled up to $12,500 as compensation for administering the estate.

However, it’s important to point out that this compensation does not include certain estate assets, including cash money owned by the deceased at the time of their death, as well as any cash held in a checking or savings account by the deceased. Life insurance proceeds and assets with named beneficiaries are also not included.

If an executor finds that the 5% is too low for the amount of work they’ve had to take on, then they can petition the court for a higher compensation.

However, this 5% limit is simply a state law that kicks into place if no mention of compensation is made in the will, or if no will was made. But testators are free to set their own agreed-upon compensation for the executor in their wills. Ideally, this will happen in cooperation with the chosen executor. Once a compensation is set forth in a legally valid will, then the Texas court will uphold that amount.

Another note: Referring back to the Texas Statutes, the corresponding probate court may deny compensation for the executor altogether if there’s evidence that the executor “has not taken care of and managed estate property prudently” or has been relieved of their duties prematurely.

Waiving of Executor Fees in Texas

There are some cases where an executor may choose to forfeit receiving a fee (which they can do so at any time). This is particularly recommended if the executor is also a beneficiary of the estate, so that any potential conflicts of interest can be avoided.

Questions about executor fees in Texas? Get in touch for a free consultation at ClearEstate and find out how we can help.