Administrator fees in NY are calculated as follows:
• 5% of the first $100,000
• 4% of the next $200,000
• 3% the next $700,000
• 2.5% of the next $4 Million
• 2% of the rest of the value of the estate
This calculation instruction is written out in SCPA 2307.
Here is our interactive administrator fee calculator for NY, for help with the math involved:
We hope the NY administrator fee calculator has been helpful to you.
Administrators of Estates in NY are not expected to carry out their responsibilities free of charge. They are usually entitled to compensation. This compensation is called “commissions.” The amount is set by law, in SCPA 2307.
To calculate the administrator fees in NY, seek the advice of an estate attorney. The calculation can be trickier than people think.
Keep in mind that the statute requires that commissions be split between receiving and paying out. The amount of the administrator fees will be the same as above, but listing it will look different, as the “receiving” fee and “paying out” fee will be specified, each being half of the total administrator fee calculated.
What Percentage of the Estate Does the Administrator Take as Their Fee in NY
Actually using the percentages can be a bit confusing. Even though the NY administrator fees calculator above does the math for you, you should still be able to double-check and do the math yourself. Here is an additional explanation, which will help you understand how the calculation works:
• 5% of the first $100,000
• 4% of the next $200,000 (so $5,000 plus 4% of estate value up to $300,000)
• 3% the next $700,000 (so $5,000 plus $8,000 plus 3% of estate value up to $1 million)
• 2.5% of the next $4 Million (so $5,000 plus $8,000 plus $21,000 plus 2.5% of estate value up to $5 million)
• 2% of the rest (this is an estate that is worth more than $5 Million, so $5,000 plus $8,000 plus $21,000 plus $100,000 plus 2% of estate value over $5 Million)
The percentage is based on the value of the estate’s assets plus income derived from those assets. For example, interest received from property of the estate is included in when you calculate the administrator fees, but the property itself may not be included because the administrator is not involved in the property’s sale. This is sometimes counterintuitive because the administrator usually is involved in retitling the property from the decedent to the beneficiaries. As you can see, it is now always easy to determine which assets are included in the calculation, so an administrator is well advised to consult with an NY estate attorney before taking their fees. It is likely that a preliminary account of the estate will be required when filing for a request for advance commissions.
The administrator may be entitled to additional reasonable compensation in connection with property management (5% of gross rentals), litigation or tax matters or management of the decedent’s business matters.
What Assets Are Not Included When You Calculate Administrator Fees in NY
Assets passing outside of the estate or left to specifically named beneficiaries in a will are not included in the NY administrator fees calculation.
Assets that pass outside of the estate are not includable in calculating administrator fees in NY, also called “non-probate assets,” are not a part of the estate and the administrator, therefore, is not involved in their distribution and cannot charge commissions for them. They include:
- accounts with named beneficiaries
- accounts held jointly with the person who died
- real estate owned jointly with the person who died
- life insurance policies payable to individual beneficiaries
- real estate given to specific beneficiaries is also not a part of the estate
Specific legacy or devise is not includable in commission calculation – the value of the real property or personal property left to a specific person cannot be used as a basis of calculating administrator commissions. If there is a reason that this property has to be handled by the administrator, for example, sold and the proceeds distributed, then the property may be includable in commission calculation.
As a rule of thumb, property that the administrator is not receiving and paying out is not included in calculating their commission.
How Do I Allocate Administrator Fees in NY if there is More Than One Administrator
- Estates Under $100,000 – For estates under $100,000, there is a “one commission rule” – one commission is split between all of the administrators.
- Estates from $100,000 to $300,000 – For estates valued between $100,000 and $300,000, there is a “up to two commissions rule” – two commissions are split between all the administrators.
- Estates at $300,000 and over – For estates valued at over $300,000, there is an “up to three commissions rule” – up to three fiduciaries can get separate fees, but if there are more than three fiduciaries, they divide three commissions.
Are Administrator Fees in NY Subject to Income Tax
Yes, typical NY administrator fees are counted as income and are subject to income tax. On the other hand, the IRS and New York Department of Revenue give estate administrators an option to not take commissions and not pay income tax. This may make sense for an administrator who is the only beneficiary of an estate, or even for someone who is not the only beneficiary, in light of the income-tax savings. This is something that should be discussed with an estate attorney and a tax advisor.
Can an Administrator Get an Advance Payment of Commissions
There is no automatic right to advance payment of commissions – they are usually paid at the conclusion of the estate, with our strong insistence that administrators receive a waiver from the beneficiaries. However, New York SCPA 2310 and 2311 do authorize the administrator to apply to the court for the advance payment of commissions and will be able to take advance commissions if the judge issues an order allowing them to do so.
What is “Receiving and Paying Out”?
SCPA 2307 states that when NY administrator fees are calculated, the amount of the fee should be split in half and the first half is presented as fee for “receiving” the estate and the second half is presented as “paying out” the estate. Although this does not impact the amount of the fee that the administrator receives, it does impact how the numbers are presented in the accounting document submitted to the court or to the interested parties. An estate attorney familiar with submitting estate accounting documents would know how those numbers should be presented correctly.
Do I Need Written Consent of the Beneficiaries Before I Take My Administrator Fee
Although it is theoretically possible to take the administrator fee at the end of the case without a written confirmation from the beneficiaries, it is almost unthinkable to do so in real-world practice because of the concern that the beneficiaries may challenge the amount at a later date. Obtaining a written waiver and consent from beneficiaries of a NY estate is a must before collecting administrator Fees. It is standard practice to obtain beneficiaries’ consent not only on administrator commissions but also on all aspects of an estate before the estate is settled.
Serving as an administrator of a NY estate may require a great deal of time and expertise depending on the size of the estate and the type of assets. Under NY SCPA 2307, an administrator of an estate is entitled to receive compensation for their time and efforts in connection with the management of the estate assets and the distribution of the assets to the beneficiaries.
If you need to calculate administrator fees in NY as per SCPA 2307, and other help in an estate, you can get in touch with New York estate attorney Albert Goodwin at email@example.com or by calling (212) 233-1233.
(Updated on 7/18/2019)
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