A client’s daughter recently sat in my Manhattan office, overwhelmed. Her father had just passed away, leaving behind a brownstone in Brooklyn, a complex investment portfolio, and a lifetime of assets. She was named executor in his will, an honor she accepted without a second thought. But now, facing months of paperwork, phone calls, and difficult conversations with relatives, she asked a question many people in her position have: “Am I supposed to do all of this for free?”
The short answer is no. In New York, serving as an executor is a job with significant fiduciary duties, not merely a symbolic role. You are a steward, entrusted with the prudent management and distribution of someone’s legacy. It is work—often demanding and time-consuming—and for that, the law provides for compensation.
The Executor’s Role Is a Job, Not a Favor
When you agree to be an executor, you take on a legal obligation to act in the best interest of the estate and its beneficiaries. This is not just about reading a will aloud. It is an active management role that can last for months, or even years. The responsibilities are substantial.
An executor is tasked with:
- Identifying and gathering all of the decedent’s assets, from bank accounts to real estate to personal property.
- Obtaining an official valuation for those assets as of the date of death.
- Paying all of the estate’s legitimate debts, taxes, and administrative expenses.
- Managing estate property, which could mean anything from maintaining a home to overseeing a business.
- Communicating with beneficiaries and providing a formal accounting of every dollar that flows in and out of the estate.
- Distributing the remaining assets to the beneficiaries according to the terms of the will.
Each of these steps requires diligence, organization, and a deep sense of responsibility. You are accountable to the beneficiaries and to the Surrogate’s Court. Given this level of duty, the idea that an executor should serve without pay is often impractical. The law recognizes this and provides a clear framework for compensation.
How New York Law Calculates Executor Commissions
Executor compensation, legally called “commissions,” is not an arbitrary figure. It is set by a specific New York statute: Surrogate’s Court Procedure Act (SCPA) § 2307. This law establishes a tiered schedule based on the value of the “commissionable estate”—the assets the executor is responsible for receiving and paying 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 commission is calculated on the value of the “commissionable estate.” This generally includes probate assets—those that pass under the will. It does not typically include assets that pass outside of probate, such as life insurance policies with a named beneficiary, jointly held property with rights of survivorship, or assets held in a trust. For example, if real estate is specifically devised to a certain person in the will, it is not part of the commission base unless the executor must sell it to pay estate debts.
When the Will Overrides the Statute
While SCPA §2307 provides a default, the will itself is the primary document. A person creating a will can include a provision that specifies a different compensation arrangement. For example, a will might state that the executor is to receive a flat fee of $20,000 or no commission at all.
If the will provides for a fee that is substantially less than the statutory commission, the named executor is not trapped. Under the law, they have the right to renounce the compensation specified in the will and opt for the statutory commissions instead. To do this, the executor must file a written renunciation with the court within four months of receiving their official appointment, known as “letters testamentary.”
Many family members—a spouse, child, or sibling—choose to waive their commissions entirely. This is a personal decision, often made out of love and respect. It can also be a practical one. Executor commissions are taxable income to the person who receives them. An inheritance, on the other hand, is generally not. For a beneficiary who is also the executor, waiving the commission might result in a better net financial outcome by receiving the funds as a tax-free inheritance instead.
Multiple Executors and Extraordinary Services
What if a will names two or more executors? The law anticipates this. If the gross value of the estate is $300,000 or more, up to three executors can each receive a full statutory commission. If the estate is between $100,000 and $299,999, two executors can each take a full commission. If the estate is less than $100,000, co-executors must share a single commission.
In some cases, an executor’s duties go far beyond standard administrative tasks. They might have to manage the decedent’s business, defend the estate in a lawsuit, or handle a complex tax audit. For these “extraordinary services,” an executor can petition the Surrogate’s Court for additional compensation above the statutory amount. The court will review the request and determine what is reasonable based on the time, effort, and complexity involved.
Serving as an executor is a profound act of stewardship. It requires integrity, patience, and a steady hand. The compensation provided by law is not a windfall; it is an acknowledgment of the critical work required to see a person’s final wishes through to completion. Stewardship.
If you are considering whom to name as your executor, it is wise to understand these financial implications. We can schedule a meeting to review your estate plan and discuss how to structure this important role to best serve your family’s future.
