A client’s niece recently called me from her late uncle’s apartment in Queens. She had been named the executor of his will. On the dining room table, she had a shoebox of financial statements, a stack of unpaid bills, and the keys to a car she couldn’t find. Her first question wasn’t about the will itself—it was about the mountain of work ahead. “Am I really expected to handle all of this for free?”
It’s a fair question. Serving as an executor is not a simple honorific. It is a demanding job, one that carries significant legal and financial responsibility. The person you name as the custodian of your legacy is tasked with marshalling your assets, paying your final debts and taxes, and distributing what remains to your heirs. In New York, this work is recognized as a professional service, and it comes with a right to compensation.
Many people—both those writing a will and those named to execute one—are unclear on how this works. The payment is not a gift or part of the inheritance. It is a commission earned for the faithful performance of a fiduciary duty.
The Default Rule: New York’s Statutory Commissions
When a will is silent on compensation, or if it simply states that the executor should receive a “reasonable fee,” New York law provides a clear formula. The rules are laid out in the Surrogate’s Court Procedure Act (SCPA) § 2307. This statute removes ambiguity and ensures that executors are compensated according to a predictable schedule based on the value of the estate they administer.
The commission is calculated on a sliding scale based on the value of the assets that the executor receives and pays out. The rates are 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
For example, on a $1 million estate, the executor’s commission would be calculated as: $5,000 (5% of $100k) + $8,000 (4% of $200k) + $21,000 (3% of $700k). The total statutory commission would be $34,000. This is the baseline the law provides to ensure the person managing the estate is paid for their time, effort, and risk.
When the Will Specifies a Different Arrangement
A person writing a will—the testator—is free to set their own terms for executor compensation. This power allows for deliberate and intentional planning that reflects the family’s unique circumstances. The will might specify:
- A Fixed Fee: The will might state, “I direct that my executor shall be paid the sum of $20,000 for their services.” This is common when the testator wants to provide certainty.
- A Bequest in Lieu of Commission: A clause might read, “I give my sister, Jane, $50,000, on the condition that she serves as the executor of my estate.” This has tax implications, as a bequest is typically received income-tax-free, while a commission is taxable income.
- No Compensation: A will can direct that an executor serve without pay. This often occurs when the named executor is also the sole beneficiary of the estate, making a formal commission redundant.
An executor is not bound by the will’s compensation terms if they are less than the statutory rate. An executor can, within a specific timeframe, file a written notice renouncing the compensation provided in the will. If they do so, they are entitled to the full statutory commissions laid out in SCPA § 2307. This protects a non-family executor, for example, from being locked into an unreasonably low fee for a complex estate administration.
What Exactly Is a “Commissionable Estate”?
One of the most frequent points of confusion is what assets are included in the commission calculation. The fee isn’t based on the decedent’s total net worth but on the value of the assets that legally pass through the executor’s hands—assets they must formally receive and then distribute.
This “commissionable estate” generally excludes assets that pass directly to a beneficiary by operation of law. Common examples include:
- Life insurance proceeds paid directly to a named beneficiary.
- Retirement accounts (like a 401(k) or IRA) with a designated beneficiary.
- Property owned jointly with rights of survivorship.
Real estate is a classic example of this distinction. If a will leaves a house directly to a child (“I give my home at 123 Main Street to my son, David”), and the executor’s only duty is to sign the deed over, the value of the house is typically not included in the commission base. However, if the will directs the executor to sell the house and distribute the cash proceeds, then the sale price is very much a part of the commissionable estate. Why? Because the executor has the active duty to manage, market, and transact the sale—precisely the kind of work the commission is meant to cover.
Stewardship. That is the executor’s role. It is a job that requires meticulous record-keeping, integrity, and the ability to act impartially in the face of family pressures. The compensation is not a windfall; it is a wage for performing one of the most important and legally significant duties one person can undertake for another.
Naming an executor is a profound act of trust. Ensuring they are compensated fairly for that responsibility is a key part of prudent estate planning. If you are preparing your own will or have been asked to serve as an executor, the essential first step is to clarify the scope of the duties involved. A productive way to begin is with a structured assessment of the estate’s assets to define the responsibilities and expectations for everyone involved.
