A Kentucky executor fee is capped at 5% of the personal estate’s value, plus 5% of any income the estate collects during administration. That ceiling comes from KRS 395.150, and the District Court has to approve the final amount before it’s paid, so the actual number often lands below the maximum.1Kentucky Legislative Research Commission. Kentucky Revised Statutes 395.150 – Compensation of Representatives The court can also move the figure in either direction based on how complex the estate was and how well the executor did the work.
What the 5% Cap Covers
The cap applies to the personal estate: bank accounts, investments, vehicles, household goods, and other movable property. Real property the decedent owned isn’t automatically part of the calculation, though the court may factor real-estate work into an adjustment for extraordinary services.
The second 5% applies to income the estate earns after death, such as rent, dividends, or interest collected during administration. Both pieces need court approval.1Kentucky Legislative Research Commission. Kentucky Revised Statutes 395.150 – Compensation of Representatives
KRS 395.150 also lets the District Court exceed the 5% ceiling when the executor performed unusual or extraordinary tasks, and reduce compensation below 5% when the executor performed poorly or inefficiently.
How the Commission Is Calculated
Under KRS 395.155, the commission is based on the value of the personal estate at the decedent’s death or at the time the executor actually receives the assets, whichever is higher. If an asset appreciated between the death and the executor taking possession, the higher value controls.2Kentucky Legislative Research Commission. Kentucky Revised Statutes Chapter 395 – Section 395.155
An example. If the personal estate is worth $400,000 at death and the executor collects $20,000 in income during administration, the maximum fee is $21,000: 5% of $400,000 plus 5% of $20,000. The court could approve the full amount, cut it, or raise it if the circumstances justify going above the statutory cap.
When the Will Specifies Compensation
Many wills include a compensation clause naming a dollar amount or percentage. When the will sets a figure, that provision generally governs unless it’s clearly unreasonable. An executor who accepts appointment under a will with a compensation clause is usually understood to have accepted its terms. If the will is silent, the 5% statutory cap fills the gap.
An executor named in the will can also decline the will’s compensation provision and ask the court to set fees under KRS 395.150 instead. That adds a step and requires court involvement, and in practice most family executors either take what the will provides or waive the fee entirely.
Why Family Executors Often Waive the Fee
No one has to accept executor compensation. Family members serving for a parent’s or spouse’s estate frequently waive it, especially when they’re also beneficiaries. Executor fees are taxable ordinary income at the federal level, while an inheritance generally isn’t, so taking the same dollars as an inheritance rather than as a fee can leave the executor with more after tax.3Internal Revenue Service. Are the Fees I Receive as an Executor or Administrator of an Estate Taxable Waiving also leaves more in the estate for everyone else.
The math changes if the executor isn’t a beneficiary, or is one of many. In that case the fee is real compensation for real work, and waiving it is a gift to the other heirs.
What Pushes the Fee Above or Below 5%
The District Court looks at the totality of the executor’s work when it approves compensation. A handful of factors consistently matter.
Estate complexity. A bank account and a house is a simple estate. Business interests, out-of-state property, illiquid assets, or tangled debts are not. Courts routinely approve fees near the 5% ceiling for complex estates and can exceed it when the executor’s services qualify as extraordinary.1Kentucky Legislative Research Commission. Kentucky Revised Statutes 395.150 – Compensation of Representatives
Time spent. An estate that closes in the minimum six months takes less effort than one that runs for years because of contested claims, tax audits, or hard-to-sell property. Longer administration usually supports a higher fee.
Executor performance. This is where the statute has teeth. If the court finds the executor didn’t handle duties professionally or efficiently, it can reduce the fee below 5%. Missed deadlines, sloppy records, or unnecessary delays cost the executor money directly.1Kentucky Legislative Research Commission. Kentucky Revised Statutes 395.150 – Compensation of Representatives
Beneficiary disputes. Heirs contesting the will or fighting over distributions pull the executor into mediation and litigation the estate wouldn’t otherwise face. Courts generally recognize that added burden when setting the fee.
When the Fee Gets Paid
The commission is ordinarily paid at final settlement. The District Court can authorize earlier payment for good cause, but that’s the exception.2Kentucky Legislative Research Commission. Kentucky Revised Statutes Chapter 395 – Section 395.155
Kentucky requires a minimum wait of six months from the date the personal representative was appointed before the final settlement can be filed. The settlement filed with the District Court must state the compensation claimed and the basis for it.4Kentucky Courts. Guide to Basic Kentucky Probate Procedures
If administration runs longer than two years, periodic accountings are required at least every two years. Failing to file the required accountings or inventory can result in removal from office and complete disallowance of compensation.5Kentucky Legislative Research Commission. Kentucky Revised Statutes Chapter 395 – Section 395.255 An executor who lets paperwork lapse can lose the entire fee.
Taxes on the Fee
The IRS treats executor and administrator compensation as ordinary income, reportable on the recipient’s return.3Internal Revenue Service. Are the Fees I Receive as an Executor or Administrator of an Estate Taxable That’s the tax reason many family executors waive.
On the estate’s side, the personal representative’s commission is deductible on the Kentucky inheritance tax return, reducing the taxable value of the estate. Kentucky’s inheritance tax falls on Class B and Class C beneficiaries (those outside the immediate family). Class A beneficiaries, including spouses, children, parents, and siblings, are fully exempt regardless.6Kentucky Department of Revenue. A Guide to Kentucky Inheritance and Estate Taxes
How Beneficiaries Can Challenge the Fee
Because every fee needs District Court approval, beneficiaries have a built-in chance to object before anything is paid. The executor’s settlement filing lays out the compensation claimed and the reasoning, so beneficiaries have concrete numbers to evaluate.4Kentucky Courts. Guide to Basic Kentucky Probate Procedures
Fee fights usually start with poor documentation or lack of communication. An executor who can’t explain what they did or how long it took is much more exposed to a reduction than one with detailed records. On the other side, an executor whose work was genuinely extraordinary can petition for compensation above 5%, and carries the burden of proving the services justify exceeding the cap.
Small Estates: When No Fee Applies
Not every estate goes through full probate. If the personal estate is worth $30,000 or less, the surviving spouse can petition the court to transfer the property directly. If there’s no surviving spouse, the decedent’s children can file the same petition.4Kentucky Courts. Guide to Basic Kentucky Probate Procedures Because this simplified process skips the appointment of a personal representative, executor fees generally don’t come into play at all.