Executor compensation is the amount of compensation that an executor may receive for managing and distributing an estate’s assets in accordance with the testator’s wishes set forth in the testator’s will. The testator may specify the amount of compensation an executor may receive in accordance with New York statutes or request that the executor waive the fee. If two executors are appointed by the testator, the executors must split the executor’s fee. When a spouse or other family member is appointed as the executor, many times that person typically decides not to take the fee because that person is also a beneficiary under the testator’s will. If the testator appoints an attorney or personal representative that is unrelated to the testator to act as executor, it is customary that such person receives compensation for executor’s services. If a person is both an executor and beneficiary under the will, the executor may want to waive taking an executor’s compensation since the distribution of assets to a beneficiary is non-taxable. On the other hand, executor’s fees are considered taxable under the New York State Department of Revenue and Internal Revenue Service’s tax laws. Before taking a fee for the executor’s services, it is advisable to discuss this matter with a financial advisor.
Executor’s fees in New York are statutory, and they are calculated upon the value of the estate and income received. Under the Surrogate’s Court Procedure Act, executor’s fees are as follows:
• 5% of all sums of money not exceeding $100,000
• 4% of all sums not exceeding $200,000
• 3% of all sums not exceeding $700,000
• 2.5% of all sums not exceeding $4,000,000
• 2% of all sums not exceeding $5,000,000
Additional Executor Compensation
Under New York Law, an executor may be entitled to additional reasonable compensation for one’s services under the following circumstances:
• If the decedent owned rental property and the executor duties include property management, the executor may be entitled to an additional 5% or the gross rental amounts.
• In connection with the sale of real or personal property.
• With regard to conducting litigation matters relating to the estate.
• Involving proceedings for payment or adjustment of estate taxes.
• Managing the decedent’s business.
• In connection with a homestead action.
• Other special services required to be performed by the executor
Since executor compensation matters can be complex, the assistance of a New York Estate Attorney is recommended. An experienced attorney understands the New York Probate and Estate laws and can answer questions relating to executor compensation and other probate matters, make recommendations regarding the management and administration of an estate and help settle disputes that may arise between the executor and any beneficiaries.
If you wish to speak to a New York estate attorney, call the Law Offices of Albert Goodwin at (212) 233-1233.