During the probate process, the executor will be reimbursed for legitimate out-of-pocket expenses resulting from the probate process and the management and administration of the deceased’s estate.
Unless the Will provides otherwise, under North Carolina law, Executors or Administrators may claim a commission of up to 5% of the Estate assets and receipts, as approved by the Clerk of Court.
Trusts should provide specific guidance regarding compensation. Frequently, the Trust might state that the Trustee is entitled to “reasonable compensation” for their work in serving as Trustee.
A Few Caveats To Being Paid as an Executor
It is important to understand that any such commission or compensation received is taxable income to you that you will be required to report on your personal tax return.
If you hire a professional to complete most of the work, then it may not be appropriate for you to claim a commission or compensation, or at the very least, the amount of such commission or compensation should be reduced accordingly.
Given that (1) most Executors or Trustees are family members and are also Beneficiaries of the Estate, (2) most Executors or Trustees hire professional legal assistance; and (3) any such commission or compensation must be reported as taxable income, we find that many Executors or Trustees opt to waive commission or compensation. However, each situation is unique. Your attorney can provide you with guidance as to whether it may be prudent to claim a commission or compensation.
Losing a Loved One is Hard - We Can Help
The days and weeks after a loss are often fraught with grief, questions, and unfortunately, family complications. It’s a terrible time to try to think through a legal process clearly. It’s often a challenge just to know where to start. Maybe you’re not even sure what questions to ask and whom to ask. How do you know you’re getting good advice and doing it right? You could probably use some help. Our Understanding Estate Administration guide can help. This guide will give you an overview of the probate and estate administration process in plain English. Request your free copy here.