California has one of the most detailed schemes, which provides that the executor fee is four percent of the first $100,000 of the estate, three percent of the next $100,000, two percent of the next $800,000, one percent on the next $9 million, one-half of one percent on the next $15 million, and a “reasonable amount" ...
While California law grants executors considerable authority in managing estate assets, the powers of an executor of a will are limited by the fiduciary duties owed to the estate and its beneficiaries. This means that executors are legally required to act in the best interests of the estate and its beneficiaries.
All personal representatives must include fees paid to them from an estate in their gross income. If you aren't in the trade or business of being an executor (for instance, you are the executor of a friend's or relative's estate), report these fees on your Schedule 1 (Form 1040), line 8.
Generally speaking, the executor of a will cannot take everything simply based on their status as executor. Executors are bound by the terms of the will and must distribute assets as the will directs. This means that executors cannot ignore the asset distribution in the will and take everything for themselves.
Can an executor of a will be a beneficiary? Yes, the executor of the estate also can be a beneficiary of the will, and often is. Many people will select one of their grown children to be their executor. Children are primarily the beneficiaries of parents' wills.
While beneficiaries can often disagree with an executor's decisions, unless the executor clearly violates the terms of the will or breaches their fiduciary duty, there is typically nothing a beneficiary can do about it.
Utilize deductions for estate-related expenses like legal and accounting fees to lower taxable income. Consider reimbursement for out-of-pocket expenses to avoid additional tax liabilities. Explore state-specific regulations and exemptions that may minimize executor fee taxes.
Inheritance checks are generally not reported to the IRS unless they involve cash or cash equivalents exceeding $10,000. Banks and financial institutions are required to report such transactions using Form 8300. Most inheritances are paid by regular check, wire transfer, or other means that don't qualify for reporting.
If you file a return and claim a refund for a deceased taxpayer, you must be: A surviving spouse/RDP. A surviving relative. The sole beneficiary.
They have many responsibilities and powers. However, the executor does not get to decide who gets what. It is the fiduciary duty of the executor to distribute the decedent's estate funds as stated in the will.
As noted in the previous section, an executor cannot change a will. This means the beneficiaries who are named in a will are there to stay. Put simply, they cannot be removed, no matter how difficult or belligerent they are being with the executor.
Serving as an executor or trustee is a significant responsibility that requires careful consideration. While there are benefits, such as personal satisfaction and potential compensation, there are also drawbacks, including time commitment, emotional strain, and potential legal liability.
Executor fees are regulated by a set tariff of 3.5% (excl. VAT) of the gross value of assets in the estate, and 6% (excl. VAT) on all income received into the estate during the estate administration process. The length of the deceased administration process therefore determines how much an executor can charge.
The executor has authority from the county probate court to act in this role, but that doesn't necessarily mean that the executor has the final say on all decisions regarding the estate. In fact, they're instead tasked with simply following the guidelines set forth by the will and other estate planning documents.
According to California Probate Code section 10800, the following is the statutory fee structure for personal representatives in California; 4% on the initial 100,000 dollars. 3% on the subsequent 100,000 dollars. 2% on the following 800,000 dollars.
Many people worry about the estate tax affecting the inheritance they pass along to their children, but it's not a reality most people will face. In 2025, the first $13,990,000 of an estate is exempt from federal estate taxes, up from $13,610,000 in 2024. Estate taxes are based on the size of the estate.
Bottom Line. California doesn't enforce a gift tax, but you may owe a federal one. However, you can give up to $19,000 in cash or property during the 2025 tax year and up to $18,000 in the 2024 tax year without triggering a gift tax return.
Deposit the money into a safe account
Your first action to take when receiving a lump sum is to deposit the money into an FDIC-insured bank account. This will allow for safekeeping while you consider how to make the best use of your inheritance.
For example, the executor is entitled to 4% of the first $100,000 of the estate, then 3% of the next $100,000, and 2% of the next $800,000. If the estate is in the millions of dollars, the executor will receive 1% on the next $9 million, then 1/2% on the next $15 million.
Fact Sheet on Being on Executor
An executor (personal representative) is the person responsible for settling a deceased person's estate. As executor, your duties include inventorying, appraising, and distributing assets, paying taxes, and settling debts owed by the deceased.
Trusts and estates are generally not treated as a “trade or business” and nonprofessional trustees are serving in a capacity that does not qualify as a “trade or business” activity for that individual. Therefore, we generally do not issue 1099s for executor or trustee fees.
An executor should be someone who's trustworthy, financially responsible, organized and respected by the beneficiaries.
An executor may overrule beneficiary wishes if it is necessary to comply with a will's terms or a court order, though they cannot unilaterally reduce inheritance payments or alter will terms without following legal and ethical boundaries set out by both state law and the will itself.
Beneficiary Designation Takes Precedence Over A Will
If your heirs decide to fight the beneficiary designation in court, litigation can be expensive and take months.