A client’s mother recently passed away, leaving behind a brownstone in Brooklyn and a lifetime of carefully managed investments. My client, her only daughter, was named as the executor in the will. In our first meeting, amidst her grief, she asked a question I hear often: “Am I supposed to do all of this for free?” She was looking at months of work—locating assets, paying creditors, filing tax returns, and communicating with other family members. It felt like a full-time job.
My answer was simple: No, you are not. The role of an executor is not a favor; it is a fiduciary appointment with immense responsibility and significant personal liability. New York recognizes this, and our laws provide a clear framework for executor compensation.
A Fiduciary’s Work Deserves a Fiduciary’s Pay
When you name an executor, you are appointing a steward for your legacy. This person—whether a child, a sibling, a friend, or a professional—is legally bound to act in the best interests of the estate. Their duties are demanding. They must inventory every asset, from real estate to digital currency. They must satisfy all legitimate debts and taxes. They must defend the will against any challenges in Surrogate’s Court. And finally, they must distribute the remaining assets to the beneficiaries as you intended.
This is not a simple administrative task. It requires diligence, impartiality, and a great deal of time. An executor can be held personally liable for mistakes, such as distributing assets before paying a tax bill or failing to prudently manage estate investments. Because the law imposes this high standard of care—a fiduciary duty—it also provides a right to compensation. Acknowledging this right is a matter of fairness and practicality. Expecting someone to take on this risk and workload without pay is often an unreasonable request.
The Statutory Commission Formula Under New York Law
Unlike some states that use a vague “reasonable fee” standard, New York provides a specific, tiered commission schedule. The formula is laid out in Section 2307 of the Surrogate’s Court Procedure Act (SCPA). This statute dictates that an executor is entitled to a percentage of the “commissionable estate”—the value of the assets that pass through their hands.
The commissions are calculated on a sliding scale:
- 5% on the first $100,000
- 4% on the next $200,000
- 3% on the next $700,000
- 2.5% on the next $4,000,000
- 2% on any amount over $5,000,000
The commissionable estate is composed of the assets an executor receives and pays out. This typically covers real estate that is sold, bank accounts, brokerage accounts, and personal property. It does not include assets that pass outside of the probate process—such as life insurance policies with a named beneficiary or property held in joint tenancy with right of survivorship. The value of these non-probate assets is not used to calculate the executor’s fee.
Can a Will Change the Executor’s Compensation?
Yes, the person creating the will (the testator) has the final say. You can include a provision in your will that specifies a different compensation arrangement. You might direct that your executor receive a flat fee, an hourly rate, or a specific bequest in lieu of the statutory commission. You can also state that they should serve without any compensation at all.
However, an executor is not forced to accept the terms laid out in the will. Under New York law, if a will provides for compensation less than the statutory commission, the named executor has a choice. They can either accept the terms of the will or renounce that specific provision and opt for the full statutory commission instead. To do so, they must file a written renunciation with the court, typically within four months of the date their letters testamentary are issued.
This is a critical contingency. A testator might name a friend as executor and leave them a $5,000 bequest in the will, thinking it is a fair payment. But if the estate is complex and valued at $1 million, the statutory commission would be $34,000. The named executor has the right to renounce the $5,000 and claim the much larger statutory amount.
Planning for Your Steward’s Role
The question of executor compensation is a fundamental part of intentional estate planning. Forgoing compensation might seem like a way to maximize the inheritance for beneficiaries, but it can place an undue burden on the person you trust most. It can also create tension if the executor is also a beneficiary, as other beneficiaries may scrutinize their work more closely if they are also taking a commission.
These are not just financial decisions; they are family decisions. Being clear about your intentions for compensation in the will itself prevents confusion and conflict down the road. It honors the significant work you are asking your executor to perform and treats the role with the seriousness it deserves.
If you are considering whom to appoint as your executor or have been asked to serve in this capacity, it is prudent to understand the obligations and the compensation structure from the outset. We can review the fiduciary and compensation clauses in your estate planning documents to ensure your intentions for the stewardship of your assets are clear, fair, and legally sound.
