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Executor Fees – Take them or leave them?

Last month our blog concentrated on Probate in San Diego. If you have been reading our blog, you know that fees for an executor or administrator are statutory in California. The fees are set by the Probate Code and are the fees for both the executor/administrator and the attorney for the estate. On a $500,000 estate, for example, the executor or administrator’s fee would be $13,000 and another $13,000 for the attorney. Therefore on a $500,000 estate, together the fees would be $26,000 plus there will be other costs and fees to probate the estate.

Just because you are entitled to an executor or administrator fee doesn’t mean you have to take your fee. There may be reasons not to accept a fee. As a beneficiary, your inheritance is tax free. Your executor fee is not; it is taxable income. So if you are the sole beneficiary of your parent’s will, it makes no sense to take a fee. Waiving it will increase your tax-free inheritance.

If you are one of many beneficiaries, waiving your fee will cause the other beneficiaries’ shares to be greater which you may want or maybe not. Sometimes in a family situation, executors choose to waive fees just to insure more harmony in the family.

Law Office of Scott C. Soady, A Professional Corporation handles many probate matters and can advise you about taking or waiving executor/administrator fees as well as guiding you through the probate process. We are happy to answer any questions you have.

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