Executor Compensation and Fees (NC)
If the will does not specify how executor compensation should be calculated, NC estates must follow state compensation rules (see NC calculator below).
In North Carolina, the estate executor is known as a "personal representative". In the absence of specified compensation in the will, North Carolina statute sets personal representative commissions to at most 5% of:
- Estate receipts (gross value of assets, excluding real estate, plus any estate income)
- Estate expenditures (costs of running the estate, such as rent, notary fees, etc.)
- Any real estate sold (only the amount used to pay debts or fulfill bequests)
Real property (i.e., land and buildings) should only be included in the calculations if the property is sold, and then only the amounts generated from the sale that go to paying off estate debts, or to satisfying will bequests. If you are using EstateExec to settle the estate, it will automatically calculate these amounts for you.
In practice, the percentage commission often depends on overall estate size and relative complexity. For example:
- 5.0% on the first $250K
- 4.0% on the next $750K
- 3.0% on the next $1M
- 2.0% on the next $2M
- 1.5% on the anything more
So, for example, a North Carolina estate of standard complexity with receipts and expenditures of $300K might yield $14.5K in executor commissions, one with $800K would generate $34.5K, and a $1.5M estate would generate $57.5K.
A few points:
- Assets with named beneficiaries (such as an IRA) are not included in the above calculations
- If taxes on income must be withheld, the amount withheld still counts as estate receipts
- Executor compensation takes precedence over any creditors or anyone with an interest in the estate
- The court may reduce the executor fee to somewhat reflect executor expenses for additional professional help (such as realtor fees when selling real estate)
All of the above aside, if the estate is worth <$2K, and there is no compensation specified in the will, the court can set compensation to anything it deems reasonable and just.
Finally, if the will specifies that the executor should receive "reasonable" (or something like that) compensation, without going into further detail, then none of the above necessarily applies, and the executor and heirs can set the terms together in a written agreement.
You must receive permission from the court before paying yourself the compensation.
See North Carolina General Statutes § 28A-23-3 for more.
NC Compensation Calculator
EstateExec provides the following executor compensation estimator for NC 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.
Below EstateExec enables you to calculate compensation for an estate using representative tiers (from above), modified by an estate complexity factor. See estimation methodology for details, especially for important information concerning qualified proceeds of real property sales.
You can use this calculator now, but if you use EstateExec to help you track the settlement process, it will automatically perform the calculations to provide inputs for the fields below (you can create an estate for free).
See also Compensation for general remarks on executor compensation.