Executors Are Paid by Statute
Serving as an executor or administrator is real work. The fiduciary gathers assets, deals with banks and brokers, pays debts and taxes, sells or manages property, keeps records, and eventually accounts to the beneficiaries.
New York compensates that work through statutory commissions. For fiduciaries other than trustees, the governing statute is Surrogate’s Court Procedure Act § 2307. It applies to executors and administrators alike, and it uses a percentage schedule rather than hourly billing.
Commissions are a frequent source of questions from fiduciaries and a frequent subject of objection from beneficiaries. Understanding how they are calculated avoids surprises on both sides.
The Commission Schedule
SCPA 2307 sets commissions on the value of property the fiduciary receives and pays out. The rates are applied in tiers:
| Portion of commissionable value | Rate |
|---|---|
| First $100,000 | 5% |
| Next $200,000 | 4% |
| Next $700,000 | 3% |
| Next $4,000,000 | 2.5% |
| Above $5,000,000 | 2% |
The statute divides each rate in half: one half for receiving and one half for paying out. A fiduciary who receives property but has not yet distributed it has, at that point, earned only the receiving half on that property.
As an illustration, if $1,000,000 of commissionable property is received and paid out, the full commission is $34,000: $5,000 on the first $100,000, $8,000 on the next $200,000, and $21,000 on the next $700,000. Actual figures depend on what the court treats as commissionable and on any credits or adjustments in the accounting.
What Counts Toward the Commission Base
The base is not simply the size of the estate. Under SCPA 2307, property other than cash is treated as money for commission purposes, valued as the court directs, but a specific legacy or devise is excluded. If a will leaves the house to a named child, that house generally does not generate commissions merely because it passed under the will.
Assets that pass outside the estate are a separate category. Jointly held accounts, life insurance payable to a named beneficiary, and retirement accounts with designated beneficiaries are generally not received by the executor at all. Our post on whether beneficiary designations override a New York will explains why those assets often bypass probate.
Real property raises its own rule. Where a fiduciary collects rents and manages real property, SCPA 2307 permits an additional commission of 5 percent of the gross rents collected. Only one such rent commission is allowed, regardless of the number of fiduciaries.
More Than One Executor
Wills frequently name two or three children as co-executors. SCPA 2307 addresses how commissions work when more than one fiduciary serves, using the gross value of the estate’s principal:
- $300,000 or more: each fiduciary is entitled to a full commission, unless there are more than three. If there are more than three, the compensation for three is apportioned according to services rendered, unless the fiduciaries agree otherwise in writing.
- $100,000 to under $300,000: each is entitled to a full commission unless there are more than two; if more, the compensation for two is apportioned.
- Under $100,000: one full commission is apportioned among them according to services.
This is a meaningful planning point. Naming three co-executors of a large estate can multiply the total commission cost. A testator who wants several children involved may decide to address compensation in the will.
When the Will Sets the Compensation
A will may specify what an executor is to be paid. Under SCPA 2307, a fiduciary whose compensation is fixed by the will is limited to that compensation unless the fiduciary renounces it by a written instrument filed with the court within four months of the date letters are issued.
Corporate executors, such as banks and trust companies, can be entitled to compensation under the will, a written agreement, or a published fee schedule, as SCPA 2307 provides.
Attorney-Executors and SCPA 2307-a
Some clients ask the lawyer who drafted the will to serve as executor. New York permits that, but SCPA 2307-a imposes a disclosure requirement.
Before the will is executed, the testator must be informed that almost anyone may serve as executor, that an executor (including an attorney) is entitled to statutory commissions absent a contrary agreement, that without a signed acknowledgment the attorney-executor receives only one-half of the statutory commissions, and that the attorney may also be paid reasonable compensation for legal services.
The testator must sign a written acknowledgment of that disclosure in the presence of at least one witness other than the attorney-executor. The acknowledgment is a separate document, though it may be attached to the will, and it must be filed in the probate proceeding.
If the requirements are not met, the attorney-executor’s commissions are limited to one-half of the statutory amount. The statute provides that the additional rent commission is not reduced by this rule.
Waiving Commissions
An executor who is also a principal beneficiary often waives commissions. The reason is usually tax-related. Commissions are compensation and are generally treated as taxable income to the fiduciary, while an inheritance generally is not. The right choice depends on the family’s circumstances and should be reviewed with a tax adviser before the accounting is prepared.
When Commissions Are Taken and How They Are Challenged
Commissions are ordinarily reflected in the fiduciary’s accounting, whether informal (through receipts and releases) or judicial. Article 23 of the SCPA also contains provisions on payment on account of commissions (SCPA 2310) and applications for advance payment (SCPA 2311). A fiduciary should not simply pay commissions to himself or herself early without considering those provisions and the beneficiaries’ rights.
Beneficiaries who believe commissions were miscalculated, taken prematurely, or claimed on property outside the base can raise the issue in the accounting. Our posts on a beneficiary’s right to an accounting and contesting an executor’s accounting describe that process.
Commissions are only one administration expense. Bond premiums, discussed in our post on bond requirements in Surrogate’s Court, and legal and accounting fees are evaluated separately.
A Worked Example With Co-Executors
Assume a will names two children as co-executors, and $1,500,000 of commissionable property is received and paid out. Because the estate’s gross principal exceeds $300,000, SCPA 2307 entitles each co-executor to a full commission unless they agree otherwise in writing.
One full commission on $1,500,000 is $46,500: $34,000 on the first $1,000,000, plus $12,500 at 2.5 percent on the next $500,000. With two co-executors, total commissions could reach $93,000, before any rent commission.
If the will had named one executor, the commission cost would be half that amount. If it had named four, the compensation for three would be apportioned among the four according to services rendered, absent a written agreement.
The example is simplified. In an actual estate, the court determines values, the timing of distributions affects the receiving and paying-out halves, and specific bequests and nonprobate assets come out of the base. The point is that the number of fiduciaries named in the will can change the administration’s cost in a meaningful way.
Practical Guidance for Fiduciaries
Keep a clear record from the start. A ledger showing what was received, when, and in what form makes the commission calculation straightforward and defensible.
Identify early which assets are specifically bequeathed, which pass outside the estate, and which will be sold. Those categories drive the commission base.
If there are co-fiduciaries, discuss compensation before the work begins. A written agreement on apportionment avoids disputes at the end.
Getting Help With Administration
William G. Goode has handled probate and administration matters in Suffolk County Surrogate’s Court for roughly 25 years, including accountings in which commissions were at issue. Learn more about the firm’s probate and estate administration services, review William G. Goode’s attorney profile, or contact the office.
Five Frequently Asked Questions
How much does an executor get paid in New York?
Commissions follow SCPA 2307’s schedule: 5% of the first $100,000, stepping down to 2% above $5,000,000, half for receiving and half for paying out.
Do co-executors each get a full commission?
Often, yes. For estates of $300,000 or more, up to three fiduciaries may each receive a full commission under SCPA 2307.
Is the house included in the commission calculation?
Not if it passes by specific devise. Rents collected while managing real property can earn a separate 5% commission.
Can the attorney who drafted the will serve as executor?
Yes, but without the SCPA 2307-a signed disclosure acknowledgment, the attorney-executor’s commissions are cut in half.
Should a family-member executor waive commissions?
Sometimes. Commissions are generally taxable income; an inheritance generally is not. Review the choice with a tax adviser.
Authorities
SCPA § 2307 — Commissions of fiduciaries other than trustees
SCPA § 2307-a — Commissions of attorney-executor
SCPA § 2310 — Payment on account of commissions
SCPA § 2311 — Ex parte application for advance payment of commissions
Disclaimer
Attorney Advertising — General Information: This article provides general information, not legal or tax advice, and does not create an attorney-client relationship. Commission calculations depend on the will, the assets, the fiduciaries, and the court’s determinations. Prior results do not guarantee a similar outcome. The Law Office of William G. Goode, P.C. is responsible for this content.
