A son is named executor of his mother’s estate in Brooklyn. He spends the better part of a year locating assets, paying creditors, filing tax returns, and dealing with a mountain of paperwork—all while grieving. He assumes this is simply his duty. Then a cousin asks, “So, how much are you getting paid for all this?” The question hangs in the air. For many families, the idea that an executor is compensated is a surprise—and often a source of conflict.
The role of an executor is a fiduciary duty, one of the highest standards of care under the law. It is not merely an honorary title; it is a job. New York law provides a clear framework for compensation. This isn’t a negotiation between beneficiaries or a guess at an hourly rate. It is a structured formula intended to fairly compensate the person responsible for the stewardship of a legacy.
The Statutory Commission Formula
When a will is silent on compensation, or if an executor renounces a fee specified in the will, we turn to state law. The rulebook is New York’s Surrogate’s Court Procedure Act (SCPA). Specifically, SCPA § 2307 lays out the commission schedule. It is not a flat fee but a tiered percentage based on the value of the “commissionable estate.”
The calculation works as follows:
- 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
On a $1 million estate, for example, the executor’s commission is calculated in pieces: 5% of the first $100k ($5,000), plus 4% of the next $200k ($8,000), plus 3% of the remaining $700k ($21,000). The total commission would be $34,000. This statutory amount requires approval from the Surrogate’s Court before it can be paid.
What Is the “Commissionable Estate”?
A common point of contention I see is which assets are included in the commission calculation. The percentages in SCPA § 2307 apply to the value of assets the executor receives and pays out. This is a critical distinction.
Generally, this includes:
- Bank accounts, stocks, and investment portfolios in the decedent’s name alone.
- Personal property, such as art, jewelry, and vehicles.
- Real estate that the will directs the executor to sell.
- Proceeds from lawsuits and debts collected on behalf of the estate.
Some assets, however, pass outside the probate estate and are not part of the commission base. These typically include real estate that passes directly to an heir, life insurance proceeds paid to a named beneficiary, and assets held in joint accounts with rights of survivorship. Understanding this difference is fundamental to preventing disputes among beneficiaries.
When Multiple Executors Are Involved
If a will names two or more executors, the law prevents the commission from simply doubling or tripling. If the gross value of the estate is less than $300,000, all executors must share a single commission. If the estate is valued at $300,000 or more, each executor is entitled to a full commission, but only up to a maximum of two full commissions to be shared among all executors if there are more than two. This structure encourages a prudent approach to naming fiduciaries. While multiple perspectives can be valuable, the choice has direct financial implications for the estate.
A Final Thought on Intentional Planning
The statutory formula provides a reliable default, but it is just that—a default. A person creating a will can override this formula by specifying a different arrangement, such as a flat fee. An executor can also waive their commission entirely, which family members often choose to do.
The key is to be deliberate. Discussing the role and its compensation with your chosen executor ahead of time prevents misunderstanding and preserves family harmony. Stewardship. That is the goal—for the person creating the plan and for the person chosen to carry it out.
If you have been named an executor or are considering the financial structure of your own estate plan, understanding these rules is the first step. Our firm regularly counsels clients on fiduciary duties, and we can conduct a confidential review of your documents to clarify these responsibilities.
