Executor Compensation and Fees (LA)

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If the will does not specify how executor compensation should be calculated, LA estates must follow state compensation rules (see LA calculator below).

How Much Should an Executor be Paid in LA?

In Louisiana, executor compensation is governed by the will, as long as the amount specified by the will is "reasonable".

If there is no will, or the amount specified by the will is "unreasonable", then the executor, any surviving spouse, and the heirs can agree on a compensation amount for the executor.

If neither the will nor such an agreement specifies an amount, then the executor is entitled to compensation equal to 2.5% of the succession assets. In Louisiana, settling the estate is known as "succession", and the assets subject to succession (the "succession assets") are simply the gross estate assets minus any assets with named beneficiaries (such as life insurance policies or IRAs).

For example, a Louisiana estate with qualified gross assets of $500K would generate $12.5K in executor fees.

In the case of a small estate process, compensation may be increased up to 5% of the assets (Louisiana State Legislature, Code of Civil Procedure 3422).

In any case, the court may increase the compensation amount if it deems that the usual commission is inadequate.

See Louisiana State Legislature, Code of Civil Procedure 3351.

LA Compensation Calculator

EstateExec provides the following executor compensation estimator for LA estates, but please keep in mind that circumstances may vary, and that there may be special situations addressed by local custom or law. 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.

You can use this calculator now, but if you use EstateExec to help you track the settlement process, it will automatically perform the sometimes complex calculations to determine Succession Assets (you can create an estate for free).

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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: 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.

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