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In Texas, there is no requirement that an executor or trustee has to be paid a commission or be compensated for their work, but if you are not going to pay them, you have to say so in the instrument that appoints them (i.e., the Will or the trust agreement). If you do not make any reference to compensation, the Texas Probate
Code (for executors) or Texas Property Code (for trustees) provides for compensation.
Section 241 of the Texas Probate Code provides that Executors are entitled to a commission of five per cent (5%) on all sums that actually receive in cash, and five per cent (5%) on all sums they pay out in cash. According to Section 241, you will find that “sums received” does not include cash received that was on deposit in a financial institution, life insurance proceeds, certificates of deposit and similar items. In addition, “sums paid out” does not include distributions to beneficiaries of the estate
If the executor conducts a sale of property of the estate, the five per cent (5%) will apply unless a broker was used who is also being paid a commission. Thus, on the sale of a home where a broker was used and was paid a commission, the executor is not entitled to a commission as well. Where publicly-traded stock is sold in a brokerage account, and the broker receives a commission on the transaction, the executor receives no compensation.
The general rule of thumb is that the compensation will equal 5% of the income and 5% of the expenses of the estate. Sometimes this is adequate compensation, and sometimes it is not. If the executor feels the compensation is too low, he can always petition the probate court to consider additional compensation to be paid under Section 241.
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