How Much Do Executors Get Paid in Ohio?

In Ohio, an executor's compensation is set by state law and is calculated as a percentage of the estate's assets they manage. The standard fee is 4% on the first $100,000 of assets, 3% on the next $300,000, and 2% on any amount over $400,000. This payment, known as an executor fee or commission, is for the significant time, effort, and responsibility involved in settling an estate.

Navigating the role of an executor can be complex, especially when it comes to understanding your duties and rightful compensation. This guide provides a comprehensive overview of how executor pay is determined in Ohio, what assets are included, and what you need to know to manage the probate process effectively.

What is an Executor?

An executor, known as a personal representative in Ohio, is the individual or institution named in a decedent's will to administer their estate. If a person dies without a will (intestate), the probate court appoints a similar individual called an administrator.

The executor's primary responsibility is to carry out the deceased's final wishes as stated in the will. This is a court-supervised process called probate, which involves:

• Validating the will with the local probate court.
• Identifying and inventorying all estate assets.
• Notifying heirs, beneficiaries, and creditors.
• Paying all legitimate debts, bills, and taxes of the estate.
• Distributing the remaining assets to the beneficiaries.

This role requires meticulous record-keeping, adherence to legal deadlines, and impartial management of assets, which is why state law provides for compensation.

Ohio's Statutory Executor Fee Schedule: A Detailed Breakdown

Ohio law establishes a specific, tiered formula for calculating executor fees to ensure fair and consistent compensation. The fee is based on the value of the personal property in the estate and the gross proceeds from any real estate that is sold.

The calculation, as outlined in Ohio Revised Code § 2113.35, works as follows:

• 4% on the first $100,000 of the estate
• 3% on the next $300,000 (i.e., the value between $100,001 and $400,000)
• 2% on all amounts over $400,000

Example Calculation

Let’s see how this works with a hypothetical probate estate valued at $550,000.

1. First $100,000: $100,000 x 4% = $4,000
2. Next $300,000: $300,000 x 3% = $9,000
3. Remaining Amount ($150,000): $150,000 x 2% = $3,000

Total Executor Fee: $4,000 + $9,000 + $3,000 = $16,000

This fee is paid directly from the estate's assets and is considered an administrative expense, meaning it's paid before beneficiaries receive their inheritance.

Which Assets Are Used to Calculate Executor Pay?

A common point of confusion is determining which assets are included in the fee calculation. The fee is based on the probate estate, which consists of assets owned solely by the deceased person at the time of their death. It's crucial to distinguish between probate and non-probate assets.

Probate Assets (Included in Fee Calculation)

• Personal Property: This includes bank accounts, vehicles, stocks, bonds, furniture, jewelry, and collectibles that are in the decedent’s name alone.
• Income to the Estate: Any income the estate earns during the administration process, such as rent from a property or interest from a bank account.
• Proceeds from Sold Real Estate: If the executor sells real estate as part of the estate administration, the gross sale price is included in the standard percentage calculation.
• Life Insurance Payable to the Estate: If the estate itself is the named beneficiary of a life insurance policy, those proceeds are part of the probate estate.

Special Rules for Certain Assets

Ohio law has specific rules for how certain other assets are treated for compensation purposes:

• Unsold Real Estate: If real estate passes directly to beneficiaries and is not sold by the executor, it is not included in the standard 4-3-2% calculation. Instead, the executor is entitled to a 1% commission on the value of that real estate.

• Non-Probate Assets: These are assets that pass outside of the will and probate process, typically through beneficiary designations or joint ownership. Examples include:

  • Assets held in a living trust
  • Jointly owned bank accounts with rights of survivorship
  • Life insurance policies with a named beneficiary (other than the estate)
  • Retirement accounts (401k, IRA) with a named beneficiary

  Generally, non-probate assets are not included in the fee base. However, if the executor is responsible for handling or managing these assets (for example, to pay estate taxes), they may be entitled to a 1% fee on the value of those assets.

Can an Executor Receive Extra Pay?

Yes. In some cases, an estate may involve complex issues that require work beyond the typical duties of an executor. Ohio law allows for "extraordinary services" compensation, but this must be requested by the executor and approved by the probate court.

Examples of extraordinary services may include:

• Managing the deceased’s business during the probate period.
• Involvement in litigation on behalf of the estate (e.g., a wrongful death lawsuit).
• Handling complex tax audits or disputes.
• Extensive work related to real estate, such as preparing a property for sale or managing multiple rental properties.

To receive extra pay, the executor must file an application with the court detailing the services performed and the additional compensation requested.

Practical Considerations for Executors

When and How are Fees Paid?

Executor fees are not paid upfront. They are considered an administrative expense of the estate and are typically paid toward the end of the probate process, before the final distribution of assets to beneficiaries. The fee must be reported on the estate’s final accounting and approved by the probate court.

Reimbursable Expenses vs. Compensation

The executor fee is compensation for your time and labor. It is separate from the reimbursement of out-of-pocket expenses you incur while managing the estate. You are entitled to be paid back for all reasonable costs, such as:

• Court filing fees
• Postage and shipping costs
• Travel expenses related to estate business
• Fees for property appraisals
• Costs for securing property (e.g., changing locks)

Keeping meticulous records of every expense is critical for reimbursement. Tools like Heirloom's work log can help you meticulously track both your time and expenses to ensure you are properly compensated and reimbursed for your efforts.

The Importance of Communication

Being transparent about your compensation with beneficiaries can prevent misunderstandings and disputes. Since the fee is set by state law, you can explain that it's a standard part of the Ohio probate process. Clear communication helps maintain trust and ensures a smoother settlement.

Navigating the financial responsibilities of an executor—from identifying assets to calculating your rightful pay—can be complex. A platform like Heirloom provides step-by-step guidance personalized for Ohio executors, helping you manage tasks from initial asset discovery to final distribution. The platform offers tools to track estate assets, expenses, and beneficiary communications, bringing clarity and confidence to the settlement process.

Frequently Asked Questions About Executor Pay in Ohio

1. Is executor pay taxable income? Yes. The fee an executor receives is considered taxable income by the IRS and must be reported on your personal income tax return. It is not considered an inheritance.

2. Can an executor choose to waive their fee? Yes, an executor can waive their right to compensation. This is common when the executor is also a primary beneficiary (like a spouse or child) and prefers to receive the money as part of their inheritance, which is not subject to income tax. If you choose to waive the fee, it's best to do so in a formal written document filed with the probate court.

3. What if the will specifies a different fee? If the will contains a provision for executor compensation that is different from the statutory schedule, that provision typically overrides state law. However, an executor can renounce the compensation specified in the will and petition the court for the statutory fee if they believe the amount is unreasonably low for the work required.

4. How is the fee handled if there are co-executors? If a will names more than one person to serve as co-executors, they must share the single statutory fee. The probate court can apportion the fee among them based on the services each has rendered to the estate. If they contributed equally, the fee is often split evenly.

5. What happens if an executor mismanages the estate? An executor has a fiduciary duty to act in the best interest of the estate and its beneficiaries. If an executor is found to have mismanaged assets, acted negligently, or engaged in self-dealing, the court can reduce or even eliminate their fee. In serious cases, the court can remove the executor and hold them personally liable for any damages.

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Heirloom is not a law firm and cannot provide legal advice. This content is for informational purposes only. Heirloom can only provide self-help services at users' specific direction.