Yes, the executor does get paid in NY. The payment to the executor is called a commission and is calculated based on the following percentages of the value of the estate:
- 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 calculator for how much is an executor paid in NY, for help with the math involved:
Executors 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 executor does get paid in NY, and the amount is set by law, in SCPA 2307.
To calculate how much an executor gets paid 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 payment of commissions will be split between receiving and paying out. The amount of the executor 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 executor commission calculated.
An Executor is Paid in NY Based on a Percentage of the Estate
Actually using the percentages can be a bit confusing. Even though the NY executor commission 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 the executor is getting paid 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 how much the executor gets paid, but the property itself may not be included because the executor is not involved in the property’s sale. This is sometimes counterintuitive, because the executor 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 payment, so an executor is well advised to consult with a 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 an advance payment of commission.
The executor 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 In Executor Payment
Assets passing outside of the estate or left to specifically named beneficiaries in a will are not included when a New York executor gets paid.
Assets that pass outside of the estate are not includable in calculating how much is an executor paid in NY, also called “non-probate assets,” are not a part of the estate and the executor therefore is not involved in their distribution and cannot charge a commission 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 executor payment – the value of real property or personal property left to a specific person cannot be used as a basis of calculating executor compensation. If there is a reason that this property has to be handled by the executor, for example sold and the proceeds distributed, then the property may be includable in calculating executor payment.
As a rule of thumb, property that the executor is not receiving and paying out is not included in calculating their payment.
How much is Each Executor Paid in NY if there is More Than One Executor
- Estates Under $100,000 – For estates under $100,000, there is a “one commission rule” – one commission is split between all of the executors.
- 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 executors.
- 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.
Is Executor Pay in NY Subject to Income Tax
Yes, typical NY executor 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 executors an option to not take their payment and not pay income tax. This may make sense for an executor 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 Executor Get an Advance Payment of Fees
There is no automatic right to advance payment of commission – executors are usually paid at the conclusion of the estate, with our strong insistence that executors receive a signed and notarized waiver from the beneficiaries. However, New York SCPA 2310 and 2311 do authorize the executor 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 executor commission is calculated, the amount of the commission 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 executor 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.
What if How Much an Executor Gets Paid is Specified in the Will?
Some wills direct that the executor is to serve without compensation, but those wills are far and few in between. Even fewer wills specify how much is an executor paid in NY. Typical executor commission is in accordance with SCPA 2307, but a will can change that default. So it’s always a good idea to double-check your will, because if the will does set the amount of compensation, the direction of the will overwrites the default executor commission rate set forth in SCPA 2307.
Do I Need Written Consent of the Beneficiaries Before I Take My Executor Pay
Although it is theoretically possible to take the executor pay at the end of the case without 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 executor pay in NY. It is standard practice to obtain beneficiaries’ consent not only on executor commissions but also on all aspects of an estate before the estate is settled.
Serving as an executor 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 executor of an estate is entitled to receive payment 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 how much you would get paid as an executor 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 firstname.lastname@example.org or by calling (212) 233-1233.