Dear Mr. Premack: In a previous article you stated that the executor could not legally charge a fee for “receiving funds…which were on hand or were held…in a financial institution or a brokerage firm.” Does that mean if there are 5000 shares of stock at a brokerage firm that the executor could not collect a fee on transferring those to the heirs? Would that also include sale of stock and cash distributed to the heirs? NKS
The statute is clear. Section 241 of the Texas Probate Code is the source for the quote that you included in your question. Handling the shares of stock held at a brokerage firm does not entitle the Executor to 5% of their value. Selling the stock and distributing the funds does not entitle the Executor to 5% of the value.
However, there is one very significant exception. If the Will itself authorizes a fee, then the terms of the Will apply instead of the terms of the statute. Sometimes a Will states “pay my executor a reasonable fee” or “pay my executor X percent of my gross estate” or similar instructions. If the Will has specific fee instructions, then the Executor’s handling of the stock may indeed entitle the Executor to a fee which could in part be based on the value of that stock.
Paul Premack is a Certified Elder Law Attorney practicing estate planning and probate law in San Antonio.
Original Publication: San Antonio Express News, November 25, 2011