There Is No Statewide Percentage
An executor or trustee in Massachusetts can generally be paid for the work involved, even when the person serving is a family member. There is no single statewide percentage that automatically applies to every estate or trust. The governing document matters, and so do the responsibilities, the time, and the circumstances of the administration. Before someone starts paying themselves, the first step is to understand what the will or trust says and what compensation is appropriate for the job.
Personal Representatives: What the Statute Says
Massachusetts uses the term “personal representative” for the person most people call the executor, and the statute on this is short. A personal representative is entitled to reasonable compensation for services. If a will provides for compensation and there is no contract with the decedent about it, the personal representative may renounce that provision before qualifying and take reasonable compensation instead. A personal representative may also renounce the right to all or any part of the compensation, and a written renunciation of the fee can be filed with the court. See c.190B § 3-719, compensation of a personal representative.
So serving because a parent asked you to does not mean you have to do the work for free. Being named in the will does not let you pick any number you like, either.
Trustees: The Document First, Then What Is Reasonable
For trustees, the trust document is the starting point. It may contain a compensation provision or incorporate a professional trustee’s fee arrangement. Where the terms do not specify compensation, Massachusetts law entitles the trustee to compensation that is reasonable under the circumstances.
Here is the part most summaries leave out. Even when the trust does specify compensation, the court may allow more or less if the trustee’s duties are substantially different from those contemplated when the trust was created, or if the compensation the document specifies would be unreasonably low or high. See c.203E § 708, compensation of a trustee. A fee schedule written into a document twenty years ago is not automatically the last word on what the work is worth today.
Why the Assignment Matters More Than the Balance
Managing a straightforward investment trust is different from administering rental properties, overseeing business interests, or handling ongoing distributions for several beneficiaries with different needs. A substantial estate can be relatively simple to administer, while a smaller one can require considerable attention. We would want to know both what a proposed fee covers and what work is actually necessary.
For an individual serving in either role, an hourly approach can help connect compensation to the work performed. A professional or corporate trustee may instead use a published schedule based partly on the value of the assets, sometimes with minimum charges or separate fees for particular services. Neither method answers every question on its own.
Keep Records From the First Week
Recordkeeping makes all of this much easier. The person serving should record the date, the task, and the time spent, along with any expenses paid personally. A useful entry explains the work clearly enough that someone reviewing the records later can understand it. “Estate work, six hours” tells very little. A record showing time spent gathering account information, meeting with the accountant, or arranging a property repair gives the payment a factual basis.
Trying to reconstruct months of work from memory rarely improves the result, and the reconstruction tends to happen at the worst possible moment, which is the first time a sibling asks what the money was for.
Compensation, Reimbursement, and Inheritance Are Three Different Things
Compensation is not the same as reimbursement. If you pay a legitimate estate or trust expense from your own funds, repayment of that documented expense is not a fee for your time. An inheritance is a third category again. Keeping those transactions distinct helps the accounting make sense and avoids treating every check written to the person serving as though it were paid for the same reason. Payments should come from the appropriate estate or trust funds and be recorded accordingly.
The Fees Are Taxable Income, and Waiving Them Is a Real Choice
Fees for serving as an executor or trustee are generally taxable income to the recipient. They do not become tax-free because the person who died was your parent, or because the payment came from a trust. The IRS draws its line by whether you do this for a living: someone who is not in the trade or business of being an executor, which covers most family members, reports the fees as other income, while someone in that business reports them as self-employment income. See IRS Publication 525 and the IRS interactive tool on executor and administrator fees.
The same IRS guidance adds one sentence that settles a lot of family conversations: the fee is not includible in income if it is waived. That makes waiving a decision worth making deliberately and early, rather than discovering the tax treatment after the money has moved. Your accountant should be involved before any reporting decisions are made.
Settle the Expectation at the Start
Some family members choose to waive compensation, and that may be exactly right for them. Others take on substantial responsibilities that justify payment. We would rather address that expectation at the beginning, along with recordkeeping and tax treatment, than leave everyone guessing until the first accounting. Clear compensation arrangements help the person serving understand the commitment, and they let the administration proceed with a sensible record of what was done and how it was paid.
If you are still deciding who to choose as your executor, that is a separate and equally worthwhile conversation, as is choosing the right trustee. And if you are trying to judge how long the commitment actually lasts, how long probate takes in Massachusetts sets expectations.
Start with a free 15-minute consult call with Nicole Ott, our Lead Intake Coordinator. Tell her whether you are serving now or being asked to serve later. That is usually enough for us to point you in the right direction.
