How to Calculate Executor Fees for Georgia

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The probate process in Georgia can be complex, especially if the decedent's estate is large and there are many beneficiaries. Though probates are supervised by the probate courts, each estate has its own details and complexities which fall outside of the responsibilities of a probate judge. Therefore, in Georgia, like in other states, an executor is named to pilot a deceased person's estate through the probate process.

In Georgia, the executor of a will – the person steering the estate through probate – is usually entitled to compensation for services rendered. Exactly how much they can expect to be paid depends on the circumstances. Executor fees can be specified in a will and these will be honored. But, if fees are not mentioned in the will, they are calculated in Georgia by applying a statutory formula.

What Is an Executor of an Estate?

Any adult of sound mind who resides in Georgia is entitled to make a will. This is a written document in which an individual specifies the beneficiaries who will take their estate assets when they die. In Georgia, a will must be signed by the person making it, termed the testator, in front of two witnesses who are not beneficiaries under the will. Then, each of the witnesses must sign the will in front of the testator.

A testator can amend, revoke or replace the will at any point in their lifetime while they are competent. Once the testator dies, the will must be filed in Georgia Probate Court to be administered through the court-supervised probate process.

How Are Executors Chosen?

The executor of a will can be named in the will or be appointed by the court. Often the testator selects a trusted friend or relative to serve as executor, asks if they are willing to serve and, if so, names them in the will. However, a will is valid even if no executor is named in it. In this case, the probate court judge appoints an executor, giving preference to a surviving spouse.

If the deceased doesn't leave a will, their property passes to close relatives under the state's intestate laws. In that case, the court names a personal representative who performs the same responsibilities as an executor.

Duties of the Executor in Georgia

An executor is charged with doing everything necessary to move the will through the probate process. They notify the beneficiaries of the probate and they locate and collect the assets of the deceased. They also search out their debts, evaluate them and pay them. Executors must also file tax returns and pay any taxes owed by the deceased or the estate.

When the assets are collected and the debts and taxes paid, the executor inventories the estate and gets that approved by the court. Only then are the remaining assets distributed to the beneficiaries. The executor is paid for their services out of the estate funds as well.

Fees Specified in a Will

If a Georgia will names an executor, the testator may also specify a fee in the will for the executor. If that is the case, the executor can either agree to serve for the specified amount or else refuse to do so. Under Georgia probate law, the executor in this situation is not entitled to any additional funds.

Likewise, if the will states that the executor must serve without compensation, the executor will not be paid. Usually that is reserved for executors who are also beneficiaries, like a surviving spouse or an adult child. However, a testator can name someone as executor who is not a beneficiary and specify that they will not receive compensation. In that situation, the executor may well decline the appointment.

Fees Not Specified in a Will

If the fee to be paid to the executor is not specified in the will, and the will does not state that the executor is not entitled to any compensation, Georgia Probate Courts apply the fee structure set out in the statutes. Many states set executor fees based on a percentage of the value of the estate. That is, the more the estate is worth, the more the executor will receive in fees. Georgia uses a percentage approach but applies different percentages to different types of assets and debts.

When the will does not outline executor commission, Georgia estate law applies a formula essentially giving the executor a commission of 2.5 percent of all money brought into the estate. They are also entitled to 2.5 percent of all funds paid out of the estate for debts or taxes or distributed out of an estate to beneficiaries.

There are some assets excluded from this calculation, including the value of any real estate asset in the estate unless it is sold by the executor. Also excluded is the value of any stocks and bonds in the estate unless they are sold by the executor. One way for an executor to estimate their statutory commission is by multiplying the total estate value by 2.5 percent. As an example, a Georgia estate that has $100,000 in cash, and assets of $300,000, would yield a commission of some $14,000.

Additional Georgia Executor Compensation

The executor can file a petition in Georgia Probate Court asking for additional compensation – up to 3 percent of the value – for handling stocks, bonds and real estate that are distributed to the beneficiaries without being sold. They may also seek 10 percent of any money the estate receives as interest.

Non-probate Assets

It is important to understand that not every asset owned by an individual passes through probate at their death. Certain types of assets are termed non-probate assets, and their ownership transfers directly to a named beneficiary if the owner has properly registered the asset for this type of transfer. This "transfer-on-death" type of assignment is often available for an individual's retirement accounts, as well as some bank accounts.

Life insurance is another type of non-probate asset. The insurance is paid when the insured person dies, and the proceeds go directly to the named beneficiary on the policy. The money does not pass through probate or become part of the probate estate and so is not included when calculating fees. This is also true of jointly held assets, like real estate held by two persons in joint tenancy with right of survivorship. When one of the owners dies, property ownership transfers to the survivor without passing through probate.

Finally, Georgia law allows living trusts. These trusts are set up by a grantor for their own benefit during their lifetime, but at death, the assets transfer to a substitute beneficiary. The primary reason to form a living trust is to avoid probate. Living trust assets are non-probate assets in Georgia.