Executor Fees in Pennsylvania: The Johnson Estate Schedule and How Much You Can Legally Charge
In Pennsylvania, executor fees are not strictly set by a flat statutory percentage. Instead, courts rely on the Johnson Estate fee schedule, which generally allows a 5% fee on the first $100,000 of the estate, gradually scaling down for larger asset amounts.
Serving as an executor or administrator of an estate is a demanding, time-consuming job. Between managing court filings, dealing with beneficiaries, and securing property, the workload can quickly feel like a second full-time job. Naturally, Pennsylvania law entitles executors to reasonable compensation for their services. However, figuring out exactly how much you can legally charge is a frequent source of confusion and beneficiary disputes. If you need professional help calculating these fees or defending your accounting, our directory can connect you with experienced legal professionals across the state.
How Executor Compensation is Calculated in PA
Unlike some states that have a rigid percentage etched into statutory law, Pennsylvania relies on a standard of 'reasonable and just' compensation under 20 Pa.C.S. § 3537. To determine what is reasonable, judges across the state consistently refer to a benchmark legal precedent known as the Johnson Estate case: In re Johnson Estate, 4 Fid.Rep.2d 6 (PA Chester County Orphans' Court 1983). This case established a graduated fee schedule based on the total value of the estate's probate assets.
Calculating Fees for Liquid vs. Non-Liquid Assets
The Johnson Estate schedule applies primarily to standard probate assets. According to customary applications in courts like the Court of Common Pleas of Philadelphia County, Orphans' Court Division, Philadelphia and the Court of Common Pleas of Dauphin County, Orphans' Court Division, Harrisburg, the typical fee structure looks like this:
| First $100,000 | 5% |
| Next $100,000 ($100k to $200k) | 4% |
| Next $800,000 ($200k to $1M) | 3% |
| Over $1,000,000 | Varies (usually 2% or less) |
It is important to note that these percentages typically apply to liquid assets and the gross value of the principal. However, when it comes to non-liquid assets, particularly real estate that is specifically devised to a beneficiary and remains unsold during probate, the executor's fee is often significantly reduced. Courts generally permit a lower percentage (such as 1% to 2%) for real estate that does not require the executor to engage in a complex sale process.
Can Co-Executors Charge Double Fees?
A common misconception is that if a parent names three children as co-executors, each child gets to charge the full 5% fee. This is completely false. In Pennsylvania, the total executor fee is based on the size of the estate, not the number of people doing the job. If multiple executors are appointed, they must share the single fee pool. Typically, co-executors will split the compensation evenly, or they may allocate it proportionally based on who did the most work. If they cannot agree, they may have to petition the Court of Common Pleas of Allegheny County, Orphans' Court Division, Pittsburgh to intervene and apportion the fee.
Tax Implications of Taking an Executor Fee vs. Waiving It
Many family members who act as executors choose to waive their fee entirely, and the primary reason is taxes. If you accept an executor fee, that money is considered earned income. You must report it on your personal federal income tax return, and it is subject to standard income tax brackets. Conversely, whatever you inherit as a beneficiary is generally not subject to federal income tax (though it is subject to PA inheritance tax). For a sole beneficiary who is also the executor, taking a fee simply converts a tax-free inheritance into taxable income. It is highly advisable to consult with a tax professional before accepting the compensation.
Special Allowances for Complex Estates
The Johnson Estate schedule is a guideline, not an absolute ceiling. If an estate requires extraordinary effort, the executor may petition the court for additional compensation. For example, if the deceased owned an active business and the executor must step in to run day-to-day operations during the probate period, the standard percentage will not adequately cover the labor involved. In such cases, the executor must keep meticulous, itemized time logs showing exactly how many hours were spent on these extraordinary tasks to justify a higher fee to the judge.
Frequently Asked Questions (FAQ)
Do I have to take an executor fee if I am named in the will?
No, you have the absolute right to waive your right to compensation. Many family-member executors waive the fee to preserve harmony among beneficiaries or for income tax reasons.
Does the will override the Johnson Estate schedule?
Yes. If the deceased's will specifically states exactly how much the executor should be paid (e.g., 'My executor shall receive a flat fee of $10,000'), that directive overrides the general guidelines.
When do I actually pay myself the executor fee?
Generally, executor fees are paid out when the estate is finalized and the Family Settlement Agreement or formal accounting is approved, though partial distributions are sometimes made earlier to offset expenses.
Can beneficiaries dispute the executor's fee?
Absolutely. Beneficiaries have the right to object to the fee during the formal accounting process if they believe the executor is overcharging or did not adequately perform their duties.
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