A brother is named executor of his late sister’s will in Brooklyn. He spends the next eighteen months gathering assets, paying creditors from the estate account, filing her final tax returns, and preparing to distribute what remains. When the estate is finally ready to close, the beneficiaries—his own nieces and nephews—are surprised to see a line item for his “commission.” They ask, “You’re getting paid for this?”
This is a common point of friction. It comes from a misunderstanding of the executor’s role. Serving as an executor is not an honorary title; it is a demanding job with significant personal liability. The person you name as the steward of your legacy must perform duties ranging from inventorying property to defending the will in Surrogate’s Court if challenged. For this work, New York law entitles them to compensation.
How New York Law Sets Executor Fees
In many family situations, an executor might choose to waive their fee. But the right to that fee is absolute unless the will states otherwise. This compensation is not an arbitrary number. It is a commission calculated according to a specific, tiered formula set by statute.
The controlling law is Surrogate’s Court Procedure Act (SCPA) § 2307. This statute provides a sliding scale based on the value of the probate estate—that is, the assets that pass through the will and are administered by the executor. The commissions are calculated as follows:
- 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 above $5,000,000
For an estate valued at $1 million, the total commission would be $34,000. It is not 5% of the total. It is the sum of the calculations at each tier: ($100k * 5%) + ($200k * 4%) + ($700k * 3%) = $5,000 + $8,000 + $21,000 = $34,000. This is the presumed reasonable compensation for the executor’s work and the fiduciary duty they undertake.
What Assets Are Part of the Calculation?
A critical point is which assets are included in the commissionable estate. The fee is based on the value of assets the executor receives and pays out. This means assets passing outside of probate are not part of the calculation.
Common non-probate assets include:
- Life insurance proceeds with a named beneficiary other than the estate itself.
- Retirement accounts (like a 401(k) or IRA) with a designated beneficiary.
- Property owned jointly with rights of survivorship.
- Assets held in a trust.
If an apartment in Manhattan is owned jointly by a husband and wife, it passes directly to the surviving spouse by operation of law. The executor does not administer it, so its value is not included in the commission base. If that same apartment was owned solely by the decedent, the executor would be responsible for it, and its full value would be part of the commission calculation.
Planning for Executor Compensation
The statutory formula is the default rule, but it is not the only option. You can—and often should—address executor compensation directly in your will. You can specify a different fee structure, such as a flat fee, or state that the executor should receive no compensation.
Why would someone waive the fee? Often, the executor is also the primary beneficiary. In that case, taking a commission can be inefficient. A commission is taxable income to the executor. An inheritance, on the other hand, is generally received income-tax-free. If the executor is a close family member who will inherit the bulk of the estate, waiving the commission often makes financial sense.
However, if you name a friend, a professional, or a corporate trustee, expecting them to work for free is not realistic. The statutory commission ensures that the person you entrust with your legacy is fairly compensated for their deliberate stewardship.
Clarity is key. Addressing this issue when you draft your will prevents disputes among your beneficiaries. It allows the person you choose to accept the role with a full understanding of the duties—and the compensation—involved.
Before you name an executor, or before you agree to serve as one, it is prudent to understand the obligations involved. We can review the terms of a proposed appointment and project the statutory commission, ensuring all parties understand the process from the outset.
