When a Brooklyn family loses a parent, the sibling named as executor quickly discovers that closing an estate is a demanding, part-time job. Between clearing out the family home, securing property appraisals, negotiating with creditors, and filing formal petitions in Surrogate’s Court, the workload easily consumes hundreds of hours. Eventually, the siblings who are not doing the heavy lifting notice a check written from the estate account to the executor and ask a pointed question: Are executors actually supposed to get paid?
The short answer is yes. Serving as the custodian of a deceased person’s assets is labor-intensive, and the law recognizes that this effort warrants financial compensation. However, executor pay is not a guessing game, nor is it a blank check drawn against the family’s inheritance. It is a strictly calculated figure governed by state statute. Understanding how it works is fundamental to maintaining peace among beneficiaries.
The Mathematical Reality of SCPA § 2307
I often remind families that executor compensation is not based on the amount of time spent sorting through paperwork or cleaning out outbuildings. You do not bill by the hour. Instead, compensation is based entirely on the financial size of the probate estate. Under the Surrogate’s Court Procedure Act (SCPA § 2307), New York employs a specific, tiered percentage schedule to determine an executor’s commission.
The calculation is a matter of public record and applies to the assets the executor formally receives and pays out:
- 5% on the first $100,000 of the estate
- 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
To put this into perspective, if you are administering an estate valued at $800,000, the commission is not a flat percentage of the total. You calculate $5,000 for the first tier, $8,000 for the second tier, and $15,000 for the remaining half-million. The total statutory commission for an $800,000 estate is $28,000.
Executors cannot simply write themselves this check on day one. Taking an advance on commissions without prior approval from the Surrogate’s Court or the written consent of all beneficiaries is a breach of fiduciary duty. Typically, the commission is paid at the very end of the administration process, alongside the final accounting and distribution of assets.
Probate Assets vs. Non-Probate Assets
One of the most frequent sources of friction we see involves calculating what actually belongs in that tiered formula. An executor is only paid a commission on the assets they actively manage—known as the probate estate. They do not earn a commission on assets that pass automatically to beneficiaries outside of the will.
If a parent leaves behind a $2 million estate, but $1.5 million of that is held in a deliberate, properly funded living trust, the executor does not touch those trust funds. The trustee handles them. Similarly, life insurance policies with named beneficiaries, joint bank accounts, and retirement accounts with transfer-on-death designations bypass the Surrogate’s Court entirely. If the remaining probate estate is only worth $500,000, the executor’s commission is calculated strictly on that $500,000.
Real estate also carries its own set of rules. If a house is left directly to the children in the will, and the executor simply deeds the property over to them, the value of the house is generally not commissionable. However, if the will directs the executor to sell the real estate, or if the property must be sold to pay the deceased’s debts, the proceeds of that sale enter the probate estate and become subject to the executor’s commission.
The Income Tax Trap
Just because an executor is entitled to a $28,000 commission does not mean they should take it. In fact, when I counsel executors who are also the primary beneficiaries of an estate, we frequently decide to waive the fee entirely.
Stewardship.
That is the driving principle here. When a family member inherits money, that inheritance is generally free of income tax. However, an executor’s commission is classified by the IRS as earned income. If an executor takes their statutory fee, they must report it on their personal income tax return and pay federal and state taxes on it.
If you are the sole beneficiary of your mother’s estate, taking a commission simply converts tax-free inheritance into taxable income. It is a highly inefficient financial move. Even when there are multiple sibling beneficiaries, the executor will often waive the commission to preserve the generational wealth of the family. Alternatively, they may reach a private, informal agreement with their siblings regarding an unequal distribution of physical property to offset their labor without triggering an income tax event. Making a prudent decision here requires looking at the entire board—not just the probate statutes.
Multiple Executors and Will Directives
Families often appoint co-executors, assuming that two siblings working together will halve the burden. From a legal standpoint, it introduces a new layer of arithmetic. If the total value of the estate is under $100,000, the co-executors must split a single commission. If the estate is valued between $100,000 and $300,000, they split up to two full commissions. If the estate exceeds $300,000, New York law allows up to three co-executors to each claim a full commission. If there are more than three, they must divide three full commissions among themselves.
The deceased always has the last word. The default rules of SCPA § 2307 only apply if the will is silent on the matter. A well-drafted will can explicitly state that the executor shall serve without compensation, or it can dictate a specific flat fee. If the will caps the compensation at $10,000, the executor must accept that limit—or, under specific legal timeframes, formally renounce the compensation designated in the will and petition the court for the statutory amount.
Leaving these matters to chance or assumption almost guarantees conflict. If you want to ensure your chosen executor is fairly compensated without draining the estate or causing a rift among your heirs, the language in your estate documents must be exact. I invite you to schedule a 30-minute review of your existing will so we can examine your executor compensation clauses and ensure they align with your family’s reality.
