Executor and Administrator Fees in Arkansas Probate: How Much Can You Legally Claim?
Under Ark. Code Ann. § 28-48-108, an Arkansas executor can legally claim up to 10% on the first $1,000 of personal property, 5% on the next $4,000, and 3% on the remaining balance. These fees must be approved by the probate judge.
Being named the executor or administrator of an estate in Arkansas is a profound honor, but it is also essentially a part-time job. You are legally responsible for securing houses, communicating with angry creditors, managing tax filings, and dealing with grieving family members. Because this work is difficult and time-consuming, Arkansas law ensures that the person doing the heavy lifting is fairly compensated for their effort from the estate's funds.
However, calculating exactly how much you are owed, and knowing how to legally claim it without angering the beneficiaries, requires precision. We strongly advise utilizing our US Lawyers Directory to find a local Arkansas probate attorney who can help you accurately calculate your allowable fee and petition the court correctly.
Arkansas's Statutory Compensation Schedule
In many states, executors are simply paid a "reasonable fee" determined by the judge. Arkansas is much more specific. Under Ark. Code Ann. § 28-48-108, the state provides a clear, percentage-based maximum that a personal representative can claim. The fee is strictly based on the total value of the personal property that passes through the executor's hands.
The statutory fee structure is calculated as follows:
- 10% of the first $1,000.
- 5% of the next $4,000 (up to $5,000 total).
- 3% of the remaining balance of the personal property.
Calculating Fees on Personal Property vs. Real Estate
It is crucial to understand what counts toward this percentage. "Personal property" includes bank accounts, vehicles, stocks, and household items. Real estate (like the family home in Bentonville or farmland in Jonesboro) generally does not count toward the percentage calculation unless the court specifically ordered the executor to sell the real estate to pay the estate's debts. If the house simply passes to the heirs, the executor does not earn a percentage of its value.
Petitioning for 'Extraordinary Services' Fees
Sometimes, an estate is exceptionally complicated. If the executor had to manage a commercial business owned by the deceased, defend the estate in a bitter lawsuit filed by a sibling, or untangle years of unfiled IRS tax returns, the standard percentage might not cover the immense hours worked. In these cases, Arkansas law allows the executor to petition the Circuit Court Probate Division for additional compensation for "extraordinary services." The judge will review the specific tasks performed and decide if extra pay is warranted.
Family Members vs. Professional Fiduciaries
Many executors in Arkansas are simply the adult children of the deceased. While a family member has every legal right to claim the full statutory fee, many choose to waive their compensation entirely to leave more money in the estate for the rest of the family (and to avoid family drama).
Conversely, if the family hires a professional fiduciary or a bank trust department to act as the administrator, those professionals will almost always claim the maximum allowable statutory fee, and they will formally bill the estate for every hour spent managing complex assets.
Tax Implications: Taxable Income vs. Tax-Free Inheritance
Before you claim an executor fee, you must consider the tax consequences. In Arkansas, there is no state inheritance tax, and the vast majority of estates fall well below the federal estate tax exemption. This means that if you simply inherit money as a beneficiary, that inheritance is generally tax-free.
However, an executor fee is classified by the IRS as earned income. If you accept a $15,000 fee for administering the estate, you must report that $15,000 on your personal income tax return and pay federal and state income taxes on it. For many family-member executors who are also the primary beneficiaries, it makes better financial sense to waive the taxable fee and simply take the money as a tax-free inheritance.
Step-by-Step: How to Claim Your Executor Fee
You cannot simply write yourself a check from the estate account. You must follow proper legal procedure through the local courts, such as the Pulaski County Circuit Court or the Sebastian County Circuit Court.
Step 1: Keep Detailed Logs
From day one, keep a detailed log of all the hours you spend working on the estate, miles driven to the courthouse, and out-of-pocket expenses for things like cleaning out the deceased's house. Even though the primary fee is percentage-based, the judge may ask to see your logs if a beneficiary complains.
Step 2: File the Petition for Allowance of Fees
Near the end of the probate process, your attorney will file a Petition for Allowance of Fees alongside the Final Accounting. This petition outlines the total value of the personal property, does the math based on the state statute, and formally requests the judge's approval.
Step 3: Judge's Approval and Payment
Once the judge reviews the Final Accounting and signs the order approving your compensation, you may legally write a check to yourself from the estate's bank account before distributing the remaining funds to the heirs.
Potential Costs and Hourly Rates
If you are an executor who needs to hire professionals to help you manage the estate, those fees are also paid out of the estate funds, not your own pocket. Typical estate expenses in Arkansas include:
| Professional Service | Estimated Expense (USD) |
|---|---|
| CPA / Tax Professional | $500 - $1,500 per return |
| Probate Attorney (Hourly) | $250 - $450 per hour |
| Professional Fiduciary (Hourly) | $100 - $250 per hour |
Frequently Asked Questions (FAQ)
Can the will override state law regarding my fee?
Yes. If the deceased's will explicitly states that the executor shall receive a flat fee of $5,000, or explicitly states the executor must serve without compensation, the court will generally enforce the terms of the will over the statutory percentages.
What if the heirs object to the fee I am claiming?
Beneficiaries have the right to object to the Final Accounting. If they feel you mismanaged the estate or are claiming an unfair fee for extraordinary services, the judge will hold a hearing to review the evidence and make a final ruling.
Do I get reimbursed for money I spent out of pocket?
Yes. If you personally paid for the funeral, court filing fees, or property maintenance, you are entitled to dollar-for-dollar reimbursement from the estate before any inheritances are paid. This is separate from your executor fee.
When exactly do I get paid?
Executors typically get paid at the very end of the probate process, after the six-month creditor waiting period has expired and the judge has formally approved the Final Accounting.
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