Executor fees in Michigan are set by a “reasonable compensation” standard, not a fixed percentage written into law. Under MCL 700.3719, the personal representative (Michigan’s term for an executor) is entitled to reasonable pay for the work performed, but the statute does not spell out a dollar amount or formula.1Michigan Legislature. MCL Section 700.3719 In practice, fees often fall between 2% and 4% of the estate’s gross value, with the actual number driven by the size of the estate and how complicated the administration turns out to be.
What Counts as a Reasonable Fee
Because Michigan doesn’t publish a schedule, probate courts judge fees against the facts of each estate. The Michigan Court of Appeals in In re Weaver Estate held that reasonable value is measured by the time spent, the amount involved, the character of the services rendered, the skill and experience the work called for, and the results obtained. The court also made clear that the executor’s own opinion of what the services are worth does not bind the judge; the court weighs the services independently from the evidence in front of it.2CaseMine. In re Estate of Weaver
In plain terms, three things move the number up or down: the executor’s own qualifications and experience, the difficulty and volume of the work (business interests, out-of-state real estate, contested claims, and complex taxes all push fees higher), and what the executor actually accomplished for the estate. A straightforward estate of a house and a few bank accounts sits at the low end of the typical 2%–4% range. An estate with litigation or a closely held business can justify more.
One useful cross-check: compare the proposed fee both as a percentage of the estate and as an implied hourly rate for the work performed. If a percentage-based fee works out to several hundred dollars an hour for routine paperwork, it will be hard to defend as reasonable no matter how large the estate.
When the Will Sets the Fee
If the will specifies a compensation amount or formula, that provision generally controls. The personal representative does, however, have the right to renounce the will’s compensation provision before formally qualifying for the role, and then claim reasonable compensation instead.1Michigan Legislature. MCL Section 700.3719 That matters when a will drafted decades ago fixes a fee that no longer fits the actual work.
There is one exception. A written contract between the decedent and the personal representative about compensation is binding and cannot be renounced.1Michigan Legislature. MCL Section 700.3719 If you signed a fee agreement with the decedent during their lifetime, that agreement governs.
How and When the Executor Gets Paid
Michigan does not require court approval before the personal representative draws compensation. Section 3719 permits paying yourself periodically as the fee is earned.1Michigan Legislature. MCL Section 700.3719 Many executors take monthly or quarterly draws when administration stretches past a year, rather than waiting for a lump sum at closing.
Executor compensation is treated as an administration expense of the estate. That gives it priority over general creditor claims and over distributions to beneficiaries. If assets are thin, administration expenses (including the executor’s fee and attorney fees) are paid before unsecured creditors, though they sit behind funeral costs, secured claims, and certain priority debts.
The tradeoff for this self-pay authority is that any interested person can later challenge the fees as unreasonable. Your real protection isn’t a court order up front; it’s the record you keep as you go.
Keep Time Records From Day One
When an attorney serves as personal representative, Michigan law explicitly requires time records showing the date of each service, who performed it, how long it took, and a brief description of the work.1Michigan Legislature. MCL Section 700.3719 Non-attorney executors are not held to that statutory requirement, but keeping the same kind of log is the single smartest thing a lay executor can do. Without it, defending a fee becomes an uphill fight.
A workable log captures four things for every entry: date, time spent in tenths of an hour, a short description of the task, and the category of work (asset management, creditor claims, tax preparation, beneficiary communication, and so on). Start it the day you take the role. Reconstructing hours months later rarely holds up; courts tend to discount estimates that weren’t recorded contemporaneously. Phone records, emails, and professional invoices back up the log if it’s ever questioned.
Expenses Are Separate From Your Fee
Out-of-pocket costs you incur running the estate are reimbursable expenses, not part of your compensation. Court filing fees, postage, certified mail, mileage, appraisal fees, notary charges, and the cost of death certificates all come out of estate funds as administration expenses. Keep receipts and a running expense log so reimbursements never get tangled up with your fee.
Professional fees you authorize, including attorneys, accountants, and appraisers, are also estate expenses, and the probate court has authority to review whether hiring them was appropriate and whether their charges are reasonable.3Michigan Legislature. MCL Section 700.3721 One practical consequence: an executor who hands most of the real work to an attorney will have a harder time justifying a large personal fee on top of those legal bills.
Fees Are Taxable Income
Executor compensation is taxable income to the person who receives it.4Internal Revenue Service. Are the Fees I Receive as an Executor or Administrator of an Estate Taxable A non-professional handling one estate generally reports it as other income on Schedule 1. A professional fiduciary who administers estates as a regular business reports on Schedule C and owes self-employment tax on top of income tax.
The tax hit is real. A $15,000 fee might net $10,000 to $11,000 after federal and state income tax, depending on your bracket.
Should You Waive the Fee?
Michigan explicitly allows a personal representative to renounce the right to all or part of their compensation. The renunciation must be in writing, may be filed with the court, and must be served on all affected interested persons.1Michigan Legislature. MCL Section 700.3719
Family members who are both executor and beneficiary commonly waive the fee for tax reasons. If a child serves as executor of a parent’s estate and would receive $15,000 as a taxable fee or $15,000 more as an inheritance that isn’t subject to income tax, the math usually favors waiving. The calculation changes when the executor is not a beneficiary, or when the estate itself may owe federal estate tax, because executor fees are deductible as administration expenses on an estate tax return. Talk through both scenarios with a tax advisor before deciding.
What Happens If Beneficiaries Object
Any interested person can petition the probate court to review fees already taken or proposed. Objections usually surface in one of two ways: a beneficiary objects to the fee shown in the estate accounting, or a beneficiary files a standalone petition.
On review, the executor carries the practical burden of showing the fees were reasonable, and the court applies the Weaver factors: time spent, complexity, skill required, results obtained, and the estate’s total value.2CaseMine. In re Estate of Weaver This is where the time log either saves you or sinks you. An executor with contemporaneous records is in a strong position. An executor who took $30,000 and can only offer a general narrative about having worked hard is not.
If the court finds the fees excessive, it can order the executor to return the overage. Where the court finds bad faith, such as inflated fees or concealed withdrawals, it can impose additional sanctions, remove the executor, and require restitution.
Co-Executors
When a will names two or more co-personal representatives, Michigan has no statutory formula for splitting the fee. The reasonable compensation standard still applies, and each co-executor’s share should reflect the work that person actually did. Two co-executors who split the work evenly might each take a proportional share of what a single executor would have earned. One who handles the bulk of the administration while the other plays a minor role can justify a larger piece. The combined total still has to be reasonable for the estate, so naming three co-executors does not triple the total fee the estate owes.
Agree on the split early, put it in writing, and revisit it if the division of labor changes. Co-executor fee fights end up in probate court, and the delay and cost benefit no one.