An executor is the individual appointed to administer someone’s Last Will and Testament. An executor of a New York estate is not expected to administer a decedent’s estate for free. Executors receive a set commission, paid out of the estate. Commissions are calculated as a percentage of the value of the “probate estate,” less any specific legacies, bequests, and devises. The probate estate is all property held in the decedent’s sole name at the time of death. Thus, the probate estate does not include jointly held accounts or real property with rights of survivorship. Likewise, any account naming a beneficiary is paid directly to the beneficiary and not to the estate. This usually means pension plans, life insurance, transfer on death accounts, and IRAs are not part of the probate estate. Notably, a Last Will and Testament can provide a different fee structure, superseding the statute. Executors also have the option of waiving compensation.
The Surrogate’s Court Procedure Act sets forth the statutory commission rates in New York. The commission rate for each executor is 5% on the first $100,000 in the estate, 4% on the next $200,000, 3% on the next $700,000, 2.5 % on the next $4,000,000 and 2% on any amount above $5,000,000. To illustrate, if the value of a New York estate is $1,000,000 and there is one executor, the commission is calculated as follows:
$100,000 x 5% = $5,000
$200,000 x 4% = $8,000
$700,000 x 3% = $21,000
If the estate has multiple executors, they may each receive a commission – depending on the size of the estate.
- If the probate estate is less than $100,000, the commissions must be split between the executors according to the services rendered by them.
- If the probate estate is at least $100,000 but less than $300,000, two executors are each entitled to a full commission. If there are more than two executors, the commissions are divided according to the services rendered.
- If the probate estate is more than $300,000, three executors receive full commissions. If there are more than three executors, they must split three full commissions according to the services rendered.
Properly administering an estate and serving as an executor can be complicated. An executor has a fiduciary duty and may face legal liability if they squander assets or don’t act in the best interest of the estate. If designated as an executor, you should discuss your duties and commission with an experienced estates attorney.