Estate Planning For Peace Of Mind

What Texas executors should know about compensation

On Behalf of | Oct 11, 2023 | Probate and Estate Administration |

Being the executor of someone’s estate is an important responsibility. If you’ve been asked to or already agreed to take on that role for a loved one or close friend, you need to know that you’ll have a big job ahead of you. Even a relatively small and uncomplicated estate comes with numerous deadlines, responsibilities and – sometimes – headaches. 

That’s why executors are entitled to compensation under the law, although you can choose not to take it. Some executors who are also beneficiaries decline compensation, since the money comes out of the estate as a whole (rather than specifically your inheritance). It also has to be reported as income for tax purposes, while inheritances aren’t considered income. 

It’s a good idea to “run the numbers” on whether you’re better off financially taking or declining the compensation before you make the decision. Remember that you may need to take time away from work to handle these responsibilities and possibly travel within (or outside) the state. That could be a factor in your decision as well. Don’t let yourself be pressured by other family members not to take the compensation. 

How much do Texas estate executors get paid?

The amount of executor compensation should be designated in the will. Texas probate law states that standard compensation is 5% of the estate’s “gross fair market value.” Even if it’s not covered for some reason in the will or there was no will and you were appointed by the court to be executor, that’s what you’d be entitled to receive.

If you face unexpected challenges in administering the estate and it takes more time and/or work than you anticipated, you have the right to ask the probate court for added compensation and for reimbursement of any expenses you’ve had to cover yourself. Just be prepared to provide evidence showing why this added compensation is reasonable.

Administering an estate, as we noted, is a big responsibility. It’s critical that you abide by the terms of the estate and by the law. It’s often highly advisable for executors to have legal guidance to help prevent unnecessary missteps that can cause serious problems.