The question of how much an executor of an estate is entitled to charge for their services is a common one, especially for individuals who are not named as beneficiaries in a will. In Texas, the compensation for an executor is governed by state law, which sets a maximum amount that is often far less than what people assume.
The Statutory 5% Fee: Not What It Seems
Texas law, specifically Texas Estates Code Section 352.002, allows an executor to receive a commission for their services. This compensation is often referred to as a 5% statutory fee. However, this 5% is not taken from the total value of the estate. Instead, it is based on the money the executor actually receives into and pays out of the estate.
The critical limitations are:
- Money In does not include cash already in the bank or funds collected from life insurance policies or retirement accounts with named beneficiaries. It typically applies to funds the executor had to actively collect, pursue through litigation, or file a claim to acquire.
- Money Out does not include funds distributed to the beneficiaries or heirs. It is money paid for debts, taxes, administration expenses, professional fees (like those for lawyers or tax preparers), and claims against the estate.
Because most liquid assets are already collected or pass outside of probate, the total amount an executor can claim 5% on is often quite low, making the role not financially worthwhile for a non-beneficiary.
The Role is About Duty, Not Dollars
For an executor who is not a beneficiary, the motivation for serving should be to honor the deceased's wishes, not to earn a significant payment. If the only reason a person agrees to serve is the hope of receiving the statutory fee, they are likely to be disappointed.
In situations where an executor actively performs work that goes beyond simple administration—such as selling real estate, settling complex debts, or pursuing legal claims—the services may be eligible for the 5% calculation. For instance, if an executor sells a house, they could claim 5% on the sale proceeds unless a real estate agent was used, in which case the agent's commission would reduce or eliminate the executor's compensation. In short, if the job is simple and the assets are liquid, the fee will be minimal.
All information provided on Silblawfirm.com (hereinafter "website") is provided for informational purposes only, and is not intended to be used for legal advice. Users of this website should not take any actions or refrain from taking any actions based upon content or information on this website. Users of this site should contact a licensed Texas attorney for a full and complete review of their legal issues.