In North Carolina, an executor can charge up to 5% of the estate’s receipts and disbursements, but the actual figure is set by the clerk of superior court and often comes in lower. That statutory cap under N.C.G.S. § 28A-23-3 answers the basic question of how much an executor can charge in North Carolina, though the will itself can override it and non-probate assets are excluded from the calculation.1North Carolina General Assembly. North Carolina Code 28A-23-3 – Commissions Allowed Personal Representatives
The 5% Ceiling and What It Applies To
The 5% figure is a ceiling, not a floor, and it’s calculated against a specific base: the money that actually flows through the executor’s hands during administration. That means both the receipts coming into the estate and the disbursements going out. It is not 5% of the decedent’s total wealth or 5% of the estate’s inventory value.
Many executors expect the full percentage and are caught off guard when the clerk awards less. A straightforward estate with a couple of bank accounts and no disputes might warrant a commission well under 5%, while a tangled estate involving business interests, real property sales, and creditor negotiations could justify a figure near the maximum. For very small estates worth $2,000 or less, the clerk has broader discretion and can set the commission without using the percentage framework at all.
How the Clerk Decides the Actual Amount
The clerk of superior court does not rubber-stamp a percentage request. Under § 28A-23-3, the clerk weighs the time the executor spent, the level of responsibility involved, the trouble encountered, and the skill the work demanded.1North Carolina General Assembly. North Carolina Code 28A-23-3 – Commissions Allowed Personal Representatives
In practice, those factors turn into concrete questions. Did the executor have to sell real estate or liquidate a business? Were there contested creditor claims? Did family disputes require mediation or court hearings? Were there complicated income or estate tax filings? An executor who spent two years navigating litigation and managing rental properties has a stronger case for a higher commission than one who distributed a few bank accounts over three months.
Documentation is what separates a request that gets approved from one that gets cut. An executor who tracks hours, correspondence with creditors, trips to the courthouse, and coordination with appraisers or accountants gives the clerk something to look at. An executor who shows up without records is unlikely to walk away with the full amount, and beneficiaries who think the requested fee is too high can file a formal objection that puts that documentation to the test.
When the Will Overrides the Statute
A will can override the statutory framework entirely. If the decedent’s will sets executor compensation at a specific dollar amount, a fixed percentage, or even zero, that direction generally governs once the executor qualifies and accepts the appointment. Some wills state that the named executor serves without a fee. In that case the safer approach is to treat the role as unpaid unless the clerk directs otherwise.
This creates a decision point before you accept the job. If the will caps compensation at a level that doesn’t reflect the work involved, a named person can decline to serve. Once you qualify as executor, you’re largely bound by whatever the will says about pay. Read the compensation clause carefully before signing anything at the clerk’s office.
Non-Probate Assets Don’t Count
Only assets that pass through probate count toward the commission base. Life insurance paid directly to a named beneficiary, transfer-on-death bank or brokerage accounts, jointly held property that passes by survivorship, and assets in a living trust all bypass the estate and are excluded from the receipts-and-disbursements figure.
The practical effect can be significant. A decedent might have $2 million in total wealth, but if $1.5 million sits in TOD accounts and a revocable trust, the probate estate is only $500,000, and the commission ceiling is 5% of that smaller number. Executors sometimes do real work coordinating non-probate assets, but that effort alone does not increase the statutory base. If the will or a separate agreement doesn’t provide extra compensation for trust or non-probate work, the executor has no automatic right to it.
Expenses Are Reimbursed Separately
Out-of-pocket costs paid on behalf of the estate are reimbursable and do not come out of the commission. Travel for trips to the courthouse or to inspect property, postage for required mailings to creditors and beneficiaries, court filing fees, and document copying costs are legitimate estate expenses that the executor submits for reimbursement from estate funds.
Even when a will says the executor serves without a fee, documented out-of-pocket expenses can still be reimbursed. The commission compensates for time and effort; reimbursement covers money the executor fronted that the estate should have paid directly. Keep receipts. Mixing personal spending with estate expenses invites disputes and can cost the executor both the reimbursement and credibility with the clerk.
Attorneys Serving as Executor
When a licensed attorney serves as personal representative, N.C.G.S. § 28A-23-4 lets the clerk award separate counsel fees on top of the standard commission.2North Carolina General Assembly. North Carolina Code 28A-23-4 – Counsel Fees Allowable to Attorneys Serving as Representatives The attorney can be paid both for legal services rendered to the estate and for the administrative work of serving as executor, but the clerk must approve both amounts. Beneficiaries reviewing the accounting should know this dual-fee structure exists so they can raise objections if the combined total looks disproportionate to the work.
Taxes on the Commission
Whatever the clerk approves is taxable income to the executor. The IRS treats professional and non-professional executors differently.3Internal Revenue Service. Publication 559, Survivors, Executors, and Administrators
- A non-professional executor serving for a relative or friend in an isolated instance reports the fee on Schedule 1 (Form 1040), line 8z. Self-employment tax generally does not apply unless the estate includes a trade or business the executor actively participates in and the fees relate to running it.
- A professional executor in the trade or business of serving in this role, such as an attorney or trust company, reports the fee as self-employment income on Schedule C (Form 1040). Self-employment tax applies.
The estate can deduct what it pays as an administration expense, which may reduce estate tax liability for larger estates. But the executor still owes income tax on what they take home. Family-member executors sometimes waive the commission and receive the equivalent as an inheritance instead, which is generally not taxed as income. A CPA or tax attorney should run the numbers for the specific estate before that decision is finalized.
Misconduct Can Cost the Commission
An executor who breaches fiduciary duties risks losing both the position and the commission. Under N.C.G.S. § 28A-9-1, the clerk can revoke an executor’s appointment on grounds including disqualification, appointment obtained by false representation or mistake, violation of fiduciary duty, and adverse private interest.4Justia. North Carolina Code 28A-9-1 – Revocation After Hearing A removed executor faces potential surcharges for losses caused to the estate and will almost certainly forfeit any claim to a commission for the period of misconduct. Self-dealing, commingling estate funds with personal accounts, and failure to account to beneficiaries are treated especially seriously.