A client recently came to my office with a common and painful problem. Her mother had passed away in Brooklyn, leaving a will that named her as the executor. Her brother, a beneficiary, was shocked—and angry—to learn that she would be paid for her work from the estate. He felt she was taking money that belonged to the family. What he didn’t understand is that in New York, an executor’s work is a job with significant legal responsibilities, and it comes with statutory compensation.
Executor Compensation Is Not Arbitrary
The term “executor fees” is a misnomer in our state. A more accurate term is “commissions.” This is not just a matter of semantics. The amount an executor can be paid is not a figure they invent or a percentage they negotiate. It is set by law, specifically by the Surrogate’s Court Procedure Act.
The governing statute, SCPA § 2307, provides a clear, tiered formula. This structure removes guesswork and compensates the executor for the fiduciary duty they undertake. The formula calculates commissions on the value of the assets that the executor 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
For example, on a $1 million estate, the total commission is $34,000. It’s a significant figure, but it reflects the work and liability involved in properly administering an estate through the Surrogate’s Court.
What Assets Are Included in the Commission Base?
A common point of contention among beneficiaries is which assets are used to calculate this commission. The executor’s commission is based only on assets that pass through the probate estate. This is a critical distinction.
Many assets are designed to bypass probate entirely. These include:
- Life insurance policies with a named beneficiary other than the estate itself.
- Retirement accounts (like a 401(k) or IRA) with a designated beneficiary.
- Bank accounts held jointly with rights of survivorship (“JTWROS”).
- Assets held in a trust.
These assets pass directly to the named individuals by operation of law, not through the will. The executor does not administer them, so they are not included in the commission calculation. Real estate, too, has specific rules. An executor only earns a commission on real property if they are required to sell it to pay the estate’s debts or to distribute the proceeds.
The Work Behind the Commission
Serving as an executor is not a simple honorific. It is a demanding role that requires financial acumen and an unwavering commitment to one’s fiduciary duty. The commission is earned compensation for this stewardship.
The executor is responsible for marshalling all of the decedent’s assets, which can mean searching for old bank accounts and tracking down property. They must pay all of the estate’s legitimate debts and final taxes—a process that requires meticulous record-keeping. They are accountable to the beneficiaries and to the Surrogate’s Court for every dollar. They handle court procedures, manage communications with heirs who may be grieving or disagreeing, and ultimately ensure the decedent’s wishes are carried out precisely as stated in the will.
This work can take months, sometimes more than a year. It is a profound responsibility, and the statutory commission acknowledges that. Stewardship.
Can a Will Change the Commission?
Yes. A person writing a will—the testator—has the final say. If you are creating your estate plan, you can be deliberate about this. You can state in your will that your chosen executor should receive a different amount, perhaps a flat fee, or that they should serve without any commission at all. This is a common choice when the executor is also the primary beneficiary, like a surviving spouse.
If the will is silent on the matter, the rules of SCPA § 2307 apply by default. Without explicit language to the contrary, the executor is entitled to the statutory commission. Addressing the topic head-on during the planning process is a prudent step toward preventing future family conflict.
If you are drafting your will or have been asked to serve as an executor, a clear understanding of these rules is vital. We can schedule a private consultation to review the specific assets involved in your estate and clarify how these statutory commissions would apply.
