When a sibling steps up to administer a parent’s $1.2 million estate in Queens, the next eighteen months of their life change. They spend weekends clearing out the family home, evenings tracking down misplaced brokerage accounts, and holidays mediating disputes between heirs. By the time the final accounting is ready for Surrogate’s Court, that sibling usually asks a reasonable question: do I get paid for this work?
Yes. But how we calculate that payment—and whether it makes financial sense to accept it—requires a deliberate look at state law and the specific assets involved.
The Statutory Sliding Scale
We frequently see families assume an executor can simply write themselves a check for a “fair” hourly rate. That is not how the legal system operates. In New York, fiduciary compensation is not arbitrary—it is strictly governed by the Surrogate’s Court Procedure Act. Specifically, SCPA §2307 establishes a mandatory sliding scale based on the total value of the probate estate.
The calculation operates on the following tiers:
- 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 a $1.2 million estate, the executor does not simply take a flat percentage across the board. They take 5% of the first hundred thousand ($5,000), 4% of the next two hundred thousand ($8,000), 3% of the next seven hundred thousand ($21,000), and 2.5% of the remaining two hundred thousand ($5,000). The total statutory commission for this estate is $39,000.
What Counts Toward the Commission?
A common point of friction during estate administration is determining exactly which assets are subject to this calculation. Beneficiaries are understandably protective of their inheritances, and executors want to be compensated fairly for their stewardship.
The foundational rule is that an executor is only commissioned on the assets they actually receive and pay out. This means strictly probate assets. If a parent leaves behind a $500,000 life insurance policy with designated beneficiaries, or a joint bank account that passes directly to a surviving spouse, those funds bypass probate entirely. The executor does not manage them and cannot claim a percentage of their value.
Real estate carries its own distinct rules. If a house is left directly to a beneficiary in a will, it is generally not commissionable. However, if the will explicitly directs the executor to sell the property and distribute the proceeds, that real estate becomes part of the commission base. We spend significant time reviewing these distinctions with fiduciaries—over-calculating a commission is a fast track to litigation in Surrogate’s Court.
Co-Executors and Apportionment
Parents frequently name two or more children to serve as co-executors, assuming this will prevent arguments or hurt feelings. From a legal standpoint, this introduces another layer of mechanical difficulty regarding compensation. Does each sibling receive the full $39,000 in our previous example?
The answer depends entirely on the size of the estate. Under SCPA §2313, if the commissionable estate is valued at less than $100,000, only one full commission is allowed, and the co-executors must split it. If the estate is valued between $100,000 and $300,000, up to two full commissions can be awarded. For estates exceeding $300,000, the law permits up to three full commissions. If there are more than three executors on a large estate, they must divide those three commissions among themselves.
Courts rarely tolerate passive executors who demand equal pay for unequal work. Fiduciary compensation must be apportioned based on the actual services rendered. If one sibling handles the house sale, the tax filings, and the legal accounting, while the other merely signs documents when asked, the active sibling has strong grounds to request a much larger share of the allowable commission.
The Tax Implications of Taking a Fee
Just because an executor is entitled to a commission does not mean they should take it. Prudent planning is required here. Accepting a fee carries immediate tax consequences.
An executor commission is considered earned income by the IRS and the state. If you accept it, you must report it on your personal income tax return, which could push you into a higher tax bracket for the year. Conversely, inheritances are generally free from ordinary income tax.
If you are the sole beneficiary of your parent’s estate, taking a commission makes terrible financial sense. You would be actively converting a tax-free inheritance into taxable income. Even when there are multiple beneficiaries, an executor must weigh the after-tax value of the commission against the potential family friction it might cause. Many executors choose to formally waive their right to compensation to preserve harmony and maximize the generational wealth passed down to the family.
Fiduciary Duty and Court Oversight
Serving as an executor is not merely an administrative task—it is the highest form of legal responsibility. Stewardship. You act as the custodian of someone’s final legacy. Because of this, the right to a commission is never absolute.
If an executor breaches their fiduciary duty—whether through negligence, commingling estate funds with personal accounts, or failing to file tax returns on time—the beneficiaries can object to the accounting. In such cases, the Surrogate has the authority to reduce or completely deny the executor’s commission. The fee is compensation for a job done correctly, not a guaranteed payout for simply holding the title.
Properly administering an estate requires balancing legal obligations, financial realities, and family dynamics. If you have recently been named as an executor and need clarity on your responsibilities or how to accurately handle estate assets, schedule an estate administration consultation with our office to review the will and the probate inventory.
