Executor Compensation and Fee Calculator (IN)
Show Table of ContentsIf the will does not specify how executor compensation should be calculated, IN estates must follow state compensation rules.
Click to scroll to IN Fee Calculator.
How Much Should an Executor be Paid in IN?
In Indiana, the estate executor is known as a "personal representative".
Indiana statute allows personal representatives to charge "just and reasonable" fees as determined by the courts, and court rulings have subsequently indicated that the following factors should be considered:
- Nature of the work involved (time, effort, difficulty, skills required)
- Compensation customarily charged (in the community for similar services)
- Size of the estate
- Marketable nature of the assets
A number of counties have gone further to adopt more specific guidelines, and the Hamilton County Compensation Guide has proven fairly popular, setting executor compensation for attorneys to a maximum of:
- 6% for the first $100K
- 4% for the next $200K
- 3% for the next $700K
- 1% for everything more
According to the Hamilton County Guidelines, professional executors would presumably be limited to the same amounts, but non-professional executors are limited to at most 1/2 the above fees.
So, for example, in this case an Indiana estate worth $150K would yield at most $4K in fees for an amateur executor, and one worth $1M would generate at most $35K in fees for a professional executor.
Assets that pass directly to named beneficiaries, such as life insurance policies or 401Ks, are not included in these calculations.
While a number of IN counties use the same guidance, other counties are silent on specifics, and still others (such as Allen County) have a different set of guidelines for attorneys. However, these guidelines usually state that they are guidelines only, and that the courts may approve different amounts depending on circumstances, in an effort to support the flexibility to be "reasonable".
Note that state statute allows additional fees for extraordinary services, such as acting as one's own attorney, and common practice is to allow such fees for other services including sale of real estate, running a business, conducting litigation, preparing tax returns yourself, handling tax audits, and so on.
The bottom line is that there are few hard and fast rules in Indiana, and while you must strive to charge "reasonable" compensation, it might be useful to check your local county for any guidelines, particularly if the estate is going through supervised probate. Below, EstateExec offers calculators to potentially help with this task, but keep in mind that regardless of your approach, it would be wise to keep a detailed record of your executor activities in case you later have to justify your fee in court (required for supervised estates):
- Nature of the task (e.g., Drove to bank to get medallion stamp for IBM stock)
- Amount of time spent (e.g., 2 hours)
- Hourly rate for the task (e.g., $35/hour)
- Results (e.g., sold the car for Blue Book value)
If the will specifies a specific compensation, and you do not have a contract in place to serve as executor, you may renounce the compensation specified in the will if you do so before officially being appointed executor, and hence be entitled to reasonable compensation as described above.
See IN Code § 29-1-10-13.
IN Compensation Calculator
EstateExec provides the following executor compensation estimator for IN estates, but please keep in mind that there are few hard and fast rules for IN estates, and ultimately you must determine what would be reasonable for your particular circumstances. By using this estimator, you acknowledge that EstateExec provides any results as informational input only, not as legal advice, and cannot be held responsible for any inaccuracies for, or misunderstandings about, any given estate.
Below EstateExec provides two compensation approaches: you can decide which, if either, is appropriate for you. The first uses a sliding percentage scale based on the total estate gross value (the larger the estate, the smaller the percentage); the second simply compensates the executor for the value of his or her time. See Indiana estimation methodology for details.
You can use this calculator now, but if you use EstateExec to help you track the settlement process, it will automatically calculate the inputs for you based on the estate and suggest those values in the fields below (you can create an estate for free).
See also Compensation for general remarks on executor compensation.
Executor Compensation Considerations
Timing: Generally, any executor compensation is paid during the final stages of estate distribution, as one of the last things the executor does. Be careful in situations in which there is not enough to pay yourself and all other outstanding debts, as this may expose you to legal issues. However, in most states, executor compensation has precedence over almost all other debts (for example, in NY, only funeral expenses have a higher precedence).
Communication: You may wish to discuss your compensation with the other heirs early during the process, so they don't end up surprised and unhappy when they notice their shares are somewhat less than expected. You may also want to leave the door open to modify your planned compensation as the process unfolds and you determine how much or how little work will actually be required on your part.
Optional: Keep in mind that collecting executor fees is optional. Even if the will specifies compensation, or if state laws support specific fees, the executor can choose to forego that compensation, and many do. That being said, serving as an executor is A LOT of work, and there's a reason that state laws support such compensation.
Tax Optimization: One reason an executor might choose to forego explicit compensation is that executor compensation is taxable, while inheritances are generally not taxable. Consequently, if the entire estate (or a large portion of it) is going to be inherited by the executor, you may end up with more after-tax value if you forego executor compensation.
Trusts: Note that trustee compensation for managing a trust is handled differently than that of executor compensation for settling an estate (see Trustee Compensation).
Expense Reimbursement: In addition to compensation for his or her services, an executor is also entitled to reimbursement from estate proceeds for legitimate and reasonable estate administration costs, such as death certificate copies, notarization of documents, the EstateExec licensing fee, and even travel costs strictly associated with managing the estate. Once you have established an estate banking account, you can often pay for these costs directly from that account, so that no reimbursement is necessary, but you should keep good records in case you later have to justify your expenditures to the IRS or to estate heirs. Executor expenses can be reimbursed when desired, although certain probate proceedings may require prior approval. While executor expenses are generally not considered when calculating executor compensation (i.e., executor fees), if the executor incurs substantial costs paying for services that would normally be directly handled by an executor, a probate judge may sometimes require that the default executor fee be reduced accordingly.
Additional Information
See also the EstateExec Complete Executor Guide.
In case you're interested, authoritative details about executor compensation in other states can be found here: