Serving as Executor, Administrator, or Personal Representative of an estate in Pennsylvania can be a lot of work. Many of us may end up in this role only once or twice in our lifetimes, if at all. That’s why it’s understandable to ask whether executors get paid (they do) and what are the executor of estate fees for taking on these crucial responsibilities. Let’s take a look at the landscape of fees for serving in this fiduciary role of a Pennsylvania estate.
In Pennsylvania, the answer is not simple. While many states publish an official statutory schedule specifying the maximum acceptable executor fee, based on varying percentages and according to the size of the estate, Pennsylvania does not. Instead, our Commonwealth requires the amount an executor charges to be “reasonable and just under the circumstances.”
We understand how completely unhelpful that answer seems. So, we’ll dig a little deeper to find some better guidance. While the Pennsylvania Legislature has resisted the ease of adopting a percentage based fee schedule, the Orphan’s Court judges have supplied some helpful precedent. Pennsylvania probate judges regularly apply the schedule attached to a 1983 case opinion, the Johnson Estate.
The Johnson Estate executor fee schedule is posted below. It’s a benchmark many judges have recognized over the past 30 years when someone challenges an executor’s fees. Rather than balancing countless factors, many judges first examine how the claimed fee compares to the schedule in Johnson. Therefore, this schedule serves as the most intelligible answer to questions about an appropriate executor fee in Pennsylvania.
Per Col. | Per Total | |||||
$00.01 | to | $100,000.00 | 5% | 5,000.00 | 5,000.00 | |
$100,000.01 | to | $200,000.00 | 4% | 4,000.00 | 9,000.00 | |
Executor | $200,000.01 | to | $1,000,000.00 | 3% | 24,000.00 | 33,000.00 |
or | $1,000,000.01 | to | $2,000,000.00 | 2% | 20,000.00 | 53,000.00 |
Administrator | $2,000,000.01 | to | $3,000,000.00 | 1½% | 15,000.00 | 68,000.00 |
$3,000,000.01 | to | $4,000,000.00 | 1% | 10,000.00 | 78,000.00 | |
$4,000,000.01 | to | $5,000,000.00 | ½% | 5,000.00 | 83,000.00 |
1% | Joint Accounts | 1% | P.O.D. Bonds | 1% | Trust Funds |
3% | Real Estate Converted with Aid of Broker | 5% | Real Estate: Non-Converted | 1% | Real Estate: Specific Devise |
The table establishes marginal rates for appropriate fees, similar to the federal income tax. Each portion of an estate’s value gets charged its own marginal rates, which executors can stack to reach their total acceptable fee.
Example 1: Estate of $50,000
At 5 percent of the estate value, most Pennsylvania judges would deem $2,500 an acceptable Johnson fee.
Example 2: Estate of $100,000
Again, some simple math, because the value of this estate falls just short of the next calculation bracket. A $5,000 fee represents 5 percent of the estate value, again acceptable to judges who follow the Johnson guidance.
Example 3: Estate of $150,000
Our math gets more complex, as the first $100,000 of estate value gets charged a 5 percent fee, while the next $50,000 triggers a slightly lower fee. Add the 4 percent fee on that second stage ($2,000) to the 5 percent fee on the first stage ($5,000) to arrive at an acceptable fee of $7,000.
It should be stressed that these amounts represent neither a maximum or minimum acceptable executor fee. Orphan’s Court judges alone have the discretion to accept a larger fee or reduce an excessive one. If extraordinary work is required, an extraordinary fee may be acceptable. If the estate is poorly managed, a lesser fee can be imposed. Ultimately, the Johnson schedule is not law. Judges ultimately define “reasonable and just under the circumstances” on a case-by-case basis. Read some case studies in our blog
If you have questions about executor of estate fees in Pennsylvania or any other estate planning concerns contact our office for a free consultation.
Peter Klenk is the founding member of Klenk Law, a seven attorney boutique estate planning law firm. We serve clients in Pennsylvania, New Jersey, New York, Minnesota and Florida. Peter Klenk received his Masters in Taxation LL.M. from NYU Law School and his J.D. from the University of Minnesota Law School. He served his country in the Navy JAGC during Desert Storm. Easy to talk to, feel free to call Peter for an appointment. We will make the process as easy as possible!
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