Fiduciary Duty of an Executor: What It Means and What It Costs

Executors don't work for the beneficiaries. They don't work for themselves. They work for the estate — and every decision they make is measured against a standard called fiduciary duty. It requires loyalty, care, and impartial administration; violating it can result in personal liability, removal from the role, or both.

Understanding what fiduciary duty requires is the difference between administering an estate competently and handing beneficiaries the ammunition to sue you.

What Fiduciary Duty Actually Requires

As a fiduciary, the executor owes the estate four core obligations:

Duty of loyalty. Act in the best interest of the estate and its beneficiaries — never in your own interest. If you're buying an asset from the estate, hiring your own company to perform work, or taking a loan from estate funds, you've crossed the line.

Duty of care. Manage estate assets with the same prudence a reasonable person would apply to their own property. This includes securing real estate, maintaining insurance, investing estate cash conservatively, and preserving perishable or depreciating assets.

Duty to account. Keep meticulous records of every transaction — every dollar in, every dollar out. Beneficiaries and the court may review the final accounting; the right to demand a separate accounting depends on local law.

Duty of impartiality. Treat all beneficiaries fairly. If the will creates tension between current beneficiaries (who want income) and remainder beneficiaries (who want capital preservation), the executor must balance both interests — not favor one group.

Out-of-Pocket Costs: What the Estate Should Reimburse

Executors routinely pay expenses from their own pocket during the early weeks of administration, before the estate bank account is open and funded. These out-of-pocket costs are reimbursable from the estate:

• Court filing fees and probate bond premiums
• Certified death certificates
• Postage for creditor notices
• Travel to the deceased's property, court, or financial institutions
• Storage or security costs for estate assets
• Professional fees you advanced (appraiser, locksmith, cleaning service)
• Publication costs for statutory creditor notice

Keep receipts for everything. Enter each expense in a log with the date, amount, purpose, and supporting documentation. Without this paper trail, your reimbursement request becomes a he-said/she-said dispute with beneficiaries.

Can an Executor Charge the Estate for Their Time?

Yes — executors are legally entitled to compensation in most jurisdictions, and taking it is not a violation of fiduciary duty.

United States: Compensation is set by state law. For example, New York uses a sliding schedule: 5% on the first $100,000, 4% on the next $200,000, 3% on the next $700,000, 2.5% on the next $4 million, and 2% above $5 million. Other states set different schedules or use "reasonable compensation" standards based on the estate's complexity, the time spent, and the skill required.

Canada: The customary guideline is up to 5% of the estate's value — calculated as 2.5% on capital receipts plus 2.5% on capital disbursements — subject to court approval. British Columbia also allows an annual "care and management fee" of up to 0.4%.

United Kingdom: Executors are not entitled to compensation unless the will specifically provides for it or the executor is a professional (solicitor, bank, trust company). Lay executors serve without pay unless all beneficiaries agree to compensation.

Australia: Professional executors charge per the will's terms or court-approved rates. Lay executors can apply to the court for "commission" based on the estate's value and complexity, but it's not automatic.

Expenses That Are Not Reimbursable

The estate is not your personal expense account. These costs come out of your own pocket:

• Legal fees for defending yourself against beneficiary claims arising from your own misconduct
• Costs of correcting your own errors (e.g., penalties for late tax filings that were your responsibility)
• Personal travel that isn't directly related to estate business
• Meals, entertainment, or gifts to beneficiaries (unless specifically authorized by the will)
• Your personal tax preparation costs related to executor compensation income

Protecting Yourself

The best protection against a fiduciary breach claim is a well-documented paper trail. Every major decision — selling property, hiring professionals, timing distributions — should be noted in a decision log with your reasoning.

If a beneficiary later challenges your choices, you'll have contemporaneous documentation showing you acted prudently, impartially, and in the estate's best interest.

Our How to Read and Execute a Will toolkit includes a financial transaction tracker, executor fee calculator, and decision log designed to meet fiduciary documentation standards — so you're protected from day one.