Executor Compensation and Fee Calculator (SD)
Show Table of ContentsIf the will does not specify how executor compensation should be calculated, SD estates must follow state compensation rules.
Click to scroll to SD Fee Calculator.
How Much Should an Executor be Paid in SD?
In South Dakota, the estate executor is known as a "personal representative".
In cases where the will does not specify compensation amounts, South Dakota uses the principle of "reasonable" compensation in determining executor's fees, based on the following factors:
- Nature of the work involved (time, effort, difficulty, skills required)
- Compensation customarily charged (in the community for similar services)
- Size and nature of the estate (including income generated and potential liabilities assumed)
- Any time limitations
- Experience and capabilities of the person
Statute limits this reasonable fee to a maximum percentage of the personal assets of the estate of:
- 5.0% on the first $1K
- 4.0% on the next $4K
- 2.5% on anything more
So, for example, a South Dakota estate worth $5K would yield a maximum of $210 in executor fees, and one worth $600K would generate at most $15,085 in executor fees.
Assets that pass directly to named beneficiaries, such as life insurance policies or 401Ks, are not included in these calculations.
Real estate is not included in the above calculations, either, unless sold. If it is not sold, then the court will separately assign a just and reasonable executor fee for any related services performed.
Even if a will specifies the compensation for the executor (and there is no contract with the decedent regarding compensation), the executor may renounce the relevant provision before being assigned executor, and be entitled to reasonable compensation.
SD Compensation Calculator
EstateExec provides the following executor compensation estimator for SD 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.
Note that the calculator below includes income into the sum of personal standard assets and property sold, since income is explicitly mentioned as a factor in the statute. As a heuristic, the calculator also applies a 1% fee to any property unsold, but this amount is legally left to the discretion of the court.
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 provide inputs for 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: