When a Brooklyn family reads their father’s will and sees the eldest daughter named as executor, the immediate reaction is often pride. It feels like an endorsement of trust and character. Nine months later, that same daughter spends her evenings untangling decades of unfiled tax returns, negotiating with medical creditors, and preparing a property for sale. The honor quickly reveals itself as a demanding, liability-laden job. Naturally, the question arises from both the executor and the beneficiaries: does the person managing the estate actually get paid for this work?
The Reality of Fiduciary Duty
New York law recognizes estate administration as a significant undertaking. The appointed person acts as a fiduciary, bound by strict legal standards to act in the best interest of the estate. They are the custodian of a lifetime of assets, and with that custody comes personal risk. If an executor distributes funds to heirs before paying the deceased’s outstanding tax bills, the IRS can hold that executor personally liable.
Liability.
Because of the sheer volume of work and the legal exposure involved, the Surrogate’s Court does not expect anyone to perform these duties for free. Payment for this work is standard, legally protected, and referred to as an executor’s commission. Whether the executor is a corporate trustee, a professional attorney, or a family member, the right to compensation remains intact.
Calculating the Executor’s Commission
Unlike jurisdictions where compensation relies on a vague standard of “reasonable fees” argued before a judge, New York provides a strict statutory framework. Under SCPA §2307, an executor is entitled to a commission based on a sliding scale applied to the value of the probate estate they receive and pay out.
The commission structure is calculated as follows:
- 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
This math applies strictly to probate assets—the property passing through the will. Non-probate assets generally do not factor into the commission calculation. If a parent leaves a $2 million life insurance policy paying out directly to named beneficiaries, or a joint bank account transferring automatically upon death, the executor does not collect a percentage of those funds. Their compensation ties directly to the assets they actually manage and distribute.
Timing and Authorization of Payments
A common misconception is the timing of the payment. An executor cannot simply write themselves a check from the estate account the moment they receive their Letters Testamentary. By law, commissions are typically paid at the very end of the administration process, once the estate is fully settled and the final accounting is approved by the Surrogate’s Court.
If an executor wants an advance on their commission, they must secure explicit, written consent from all interested beneficiaries or obtain a specific court order under SCPA §2310. Taking funds early without authorization is a breach of fiduciary duty. It can result in severe penalties, including total forfeiture of the commission and removal from the role.
Strategic Considerations for Family Executors
Just because an executor is entitled to a commission does not mean they must accept it. When I sit down with families to review their estate administration options, we often make a deliberate choice about whether a family-member executor should waive their fee entirely.
This decision usually comes down to taxes. Under federal and state law, an inheritance is generally not subject to income tax for the recipient. However, an executor’s commission is considered earned compensation—meaning it is subject to ordinary income tax. If a son is the sole beneficiary of his mother’s estate and also serves as the executor, taking a $30,000 commission means he must declare that $30,000 as income on his personal tax return. If he waives the commission and simply inherits the money as part of the estate residue, the funds pass to him without that income tax burden. Prudent stewardship requires evaluating these tax consequences before distributing funds from the estate account.
Co-Executors and Custom Directives
Clients often ask if they can dictate compensation directly within their will. A testator might want to leave a specific dollar amount in lieu of statutory commissions, perhaps offering a flat $10,000 rather than the percentage calculation. In these scenarios, the executor typically has a four-month statutory window under SCPA §2307 to renounce the specific legacy and choose the statutory commission instead, assuming the statutory amount is higher.
Complications also arise when people name multiple executors. We frequently see wills naming three siblings as co-executors to avoid hurting anyone’s feelings. If an estate is valued at $300,000 or more, New York law allows up to three full commissions to be collected and divided among the fiduciaries. I always advise clients to be highly intentional when naming co-executors. It multiplies the administrative cooks in the kitchen, requires unanimous consent for basic banking tasks, and can increase the financial drain on the estate.
Deciding who will manage your final affairs—and understanding how they will be compensated—is a critical part of generational legacy stewardship. If you are drafting a new plan or have recently been named to administer an estate, you need clarity on the financial mechanics before taking action. Schedule a 30-minute review of your existing will with our office to confirm your nominated fiduciaries and their compensation structure align with your intent.
