A client recently sat in my office, the original copy of her mother’s will on the table between us. She had been named the executor, and while honored, she was also overwhelmed. Her first question wasn’t about assets or beneficiaries; it was more fundamental. “I want to do this right,” she said, “but this looks like a full-time job. Am I supposed to do all this for free?”
It’s a question I hear often. The role of an executor is a profound act of stewardship. It carries a significant fiduciary duty—a legal obligation to act in the best interests of the estate. But it is not volunteer work. New York law recognizes the immense responsibility and allows for compensation, not as a gift, but as an earned commission for the work performed.
How Executor Commissions Are Calculated by Law
When a will is silent on compensation, we don’t negotiate a “fair” amount. We turn directly to state law. The New York legislature created a clear fee schedule, a default rule applied by the Surrogate’s Court.
The controlling statute is Surrogate’s Court Procedure Act (SCPA) § 2307. It establishes a tiered commission structure based on the value of the “commissionable estate”—the assets the executor is responsible for receiving and distributing. The percentages are:
- 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
For an estate valued at $1,000,000, the calculation is: (5% of $100k) + (4% of $200k) + (3% of $700k). This results in a total commission of $34,000. This fee covers the entire administration, which often takes a year or more to complete.
What Is Included in the “Commissionable Estate”?
A common point of confusion is determining which assets are used to calculate this fee. An executor is paid a commission on the value of property they actively administer. This includes assets like bank accounts, investment portfolios, and personal property that pass through the will.
However, not everything a person owns is part of the commissionable estate. Certain assets pass to beneficiaries by “operation of law” and are not controlled by the will or the executor. These often include:
- Real estate owned jointly with rights of survivorship.
- Bank or brokerage accounts with a named beneficiary (payable-on-death or transfer-on-death accounts).
- Life insurance proceeds payable to a specific person.
- Assets held in a trust.
If a decedent’s largest asset was a Brooklyn brownstone owned jointly with a spouse, the value of that property would not be included in the executor’s commission base. The executor isn’t responsible for transferring it, so they cannot be paid for it. This distinction is critical for forecasting the costs of estate administration.
The Will Can Change the Rules
The statutory formula in SCPA § 2307 is a default, not a mandate. The person creating the will—the testator—has the power to override it. I have seen clients make deliberate choices about this for many reasons.
A will can specify a different compensation structure. It might state the executor is to receive a flat fee, like $25,000, regardless of the estate’s size. Or it could set a lower percentage. It is also common for a testator to name a close family member who is also a primary beneficiary and state that they should serve without commission.
If a will directs an executor to serve without compensation, the nominated person is not forced to accept. They have the right to renounce that provision in writing and opt for the statutory commission instead. Stewardship.
What if There Are Multiple Executors?
Appointing co-executors is a common strategy for dividing labor. But how does this affect compensation?
The law addresses this directly. If the gross value of the estate is less than $100,000, co-executors must share a single commission. If the estate is valued at $300,000 or more, each executor—up to a maximum of two—is entitled to receive one full statutory commission. If there are more than two, they must share two full commissions among them. For estates valued between $100,000 and $299,999, all co-executors must still share a single commission.
This is an important consideration when structuring your estate plan. Naming multiple fiduciaries can significantly increase administrative costs if the estate is large enough to trigger multiple commissions.
Understanding executor compensation is a key part of both creating an intentional estate plan and carrying out your duties as a fiduciary. The rules are clear, but their application requires careful analysis of the estate’s assets and the will’s specific language.
If you are creating or updating your will, the prudent first step is to model the potential administrative costs, including your executor’s compensation. We can schedule a meeting to review the structure of your assets and ensure your plan aligns with your intentions for your legacy and your family.
