A client from Brooklyn recently came to my office. Her aunt had named her as executor in her will, and she was honored—but also overwhelmed. “Is this a job?” she asked. “Am I supposed to get paid for this?” The answer is yes, and it’s an important one. Serving as an executor is not a simple favor for a departed family member. It is a demanding role with significant legal and financial responsibility—a fiduciary duty.
The person you name as executor is tasked with the stewardship of your entire legacy. They marshal your assets, pay your final debts and taxes, manage and protect property, and distribute what remains to your beneficiaries, all under the supervision of the Surrogate’s Court. This process can take months, sometimes years. For this work, New York law provides for specific compensation, not as a gift, but as earned payment for a critical service.
How Executor Commissions Are Calculated in New York
Many people assume executor compensation is a simple percentage of the estate. The reality is more structured. The rules are not arbitrary; they are set by statute. Specifically, New York’s Surrogate’s Court Procedure Act (SCPA) § 2307 dictates the commission schedule for fiduciaries like executors.
The commission is based on the value of the probate estate—the assets that pass through the will and are administered by the executor. It does not include assets that pass outside of probate, such as property held in a trust, jointly owned bank accounts with rights of survivorship, or accounts with named beneficiaries like IRAs or life insurance policies.
The statutory formula is tiered, meaning different rates apply to different portions of the estate’s value:
- 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
Let’s make this concrete. For an estate valued at $1,000,000, the executor’s commission would be calculated as follows:
- 5% of $100,000 = $5,000
- 4% of $200,000 = $8,000
- 3% of the remaining $700,000 = $21,000
The total commission for administering this $1 million estate would be $34,000. This fee is paid from the estate’s assets before the final distribution to beneficiaries. It is not paid out of the executor’s own pocket.
Important Considerations and Contingencies
While the statutory formula is the default, other factors can influence an executor’s compensation. Prudent estate planning involves thinking through these contingencies.
What if There Are Multiple Executors?
It’s common to name more than one person, often multiple adult children, to serve as co-executors. SCPA § 2307 also addresses this. If the gross value of the estate is $300,000 or more, each executor is entitled to a full statutory commission. However, if the estate is valued at more than $100,000 but less than $300,000, one full commission is split among the co-executors. If there are more than three executors, they must share the equivalent of three full commissions among them.
This is a critical point. Naming three executors for a $500,000 estate, for instance, could result in three full commissions being paid, significantly reducing the assets available for beneficiaries. This choice must be made with intention.
Can a Will Change the Compensation?
Yes. A testator—the person making the will—can specify a different compensation structure. They might state that the executor should receive a flat fee or serve without compensation at all. If an executor is a close family member who is also a primary beneficiary, they might agree to waive the fee. However, if the will stipulates a fee lower than the statutory rate, the named executor has the right to renounce that specific compensation and opt for the standard statutory commission instead.
Compensation for Extraordinary Services
The statutory commission is for the ordinary duties of administering an estate. If an executor must perform unusually difficult or time-consuming tasks—such as managing complex litigation on behalf of the estate or running the deceased’s business for a period—the court may approve additional, reasonable compensation for those extraordinary services. This is not automatic and must be justified to the Surrogate’s Court.
Ultimately, the role of an executor is one of immense trust and responsibility. The statutory commission acknowledges the weight of that duty. It ensures that the person tasked with overseeing your legacy is compensated fairly for their diligence, time, and the personal liability they assume.
If you have been asked to serve as an executor or are in the process of selecting one for your own estate plan, understanding these financial realities is essential. To discuss the specific duties and compensation structure relevant to your family’s situation, I invite you to schedule a consultation with our firm to review your estate planning documents.
