A client from Brooklyn called me last week. Her mother had passed, leaving her as the named executor of the estate. After reviewing the will with us, she was surprised by one detail: that she was entitled to payment for her work. “But I’m her daughter,” she said. “Taking money from my brother’s inheritance feels wrong.” This is a conversation my firm has often. The role of an executor is not merely an honor; it is a demanding job with significant legal and financial responsibility. The payment for that job—the executor’s commission—is a matter of law, not a grab for family assets.
A Job, Not a Gift
Serving as an executor is a profound act of stewardship. You are entrusted with the final financial chapter of someone’s life. This involves gathering assets, paying final bills and taxes, accounting for every dollar to the beneficiaries and the court, and distributing what remains. It can be a year-long process involving appraisers, accountants, and the Surrogate’s Court. It is a fiduciary duty, and it carries personal liability if managed improperly.
For this reason, New York law recognizes that the person performing these tasks is providing a professional service. The commission is compensation for the time, effort, and risk involved in settling an estate. It is not an inheritance. It is treated as taxable income to the executor, unlike an inheritance, which is received tax-free. Understanding this distinction is the first step for any family member who feels conflicted about accepting payment.
How New York Law Calculates an Executor’s Commission
The commission is not an arbitrary number. It is defined by statute. New York’s Surrogate’s Court Procedure Act (SCPA) § 2307 sets a sliding scale based on the value of the “commissionable estate.” This includes the value of all property and assets that the executor receives and pays out.
The statutory rates 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 above $5,000,000
The calculation excludes certain assets. For example, real estate that passes directly to a beneficiary named in the will is not part of the commissionable estate. The same goes for assets held in a trust or accounts with a named beneficiary, as they bypass probate and the executor’s administration. The calculation is deliberate, based only on the assets the executor is legally responsible for managing.
Considering Contingencies and Family Dynamics
The statutory formula is the default, but a thoughtfully drafted will can alter the arrangement.
Multiple Executors: What if a will names two children as co-executors? If the gross value of the estate is $300,000 or more, SCPA § 2307 allows each of the two executors to receive one full commission. If the will names three or more executors, they must share the equivalent of three full commissions among them. This is a crucial detail when deciding how many people to name to this role.
Waiving the Commission: An executor can always choose to waive their commission. My client in Brooklyn was considering this. It’s a common choice when the executor is also the main beneficiary. By waiving the taxable income from the commission, they receive the same amount of money as a tax-free inheritance. If the executor is not a primary beneficiary, however, waiving the fee amounts to a significant gift to the other beneficiaries.
The Will’s Authority: The person creating the will—the testator—has the final say. The will can direct a specific lump-sum payment, an hourly rate, or state that the executor must serve without compensation. If a named executor is not willing to serve under the terms specified in the will, they have the right to decline the appointment.
Deciding on executor compensation is a critical part of the estate planning process. It reflects the trust you place in someone and the value of the work you’re asking them to do. Acknowledging this work with fair compensation is an act of prudence that can prevent future misunderstandings.
If you have been named an executor or are considering whom to appoint in your will, understanding these financial and legal structures is not optional. To review the fiduciary duties involved and make a deliberate, informed decision for your estate, schedule a consultation with our firm.
