Does Estate Administrator Commission Come Out of the Gross Estate in New York?

Administrator commission comes out of the gross estate, not out of the net estate in New York. If you want to know how much an estate administrator gets paid in NY, here are the commission percentages:

• 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 estate administrator paid in NY out of the gross estate:

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We hope the NY estate administrator commission 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, which comes out of the gross estate, not the net estate. This compensation is called “commissions.” The amount an estate administrator is paid in NY is set by law, in SCPA 2307.

To calculate how much is an estate administrator 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 commission 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 commission calculated.

Actually using the percentages can be a bit confusing. Even though the NY administrator 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 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 commission, but the property itself may not be included because the estate 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 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 commission.

The estate 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.

If you need to calculate administrator commission 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 protected] or by calling (212) 233-1233.

What Counts as the Administrator's Commission Base

The commission percentages above apply to the estate assets that the administrator actually handles — assets received into the estate and paid out by the administrator. The specific items that count include:

• Bank accounts and cash. Money the administrator collects and either pays out as expenses or distributes to beneficiaries.
• Brokerage and investment accounts. Securities that the administrator liquidates or transfers.
• Real estate that is sold. When the administrator sells real property and handles the proceeds, the sale value counts.
• Personal property that is sold. Vehicles, art, jewelry, and other personalty sold by the administrator.
• Income earned on estate assets. Interest, dividends, rent received during administration.
• Insurance proceeds payable to the estate. Life insurance and other proceeds collected.

What Does Not Count

Equally important is what does not count toward the commission base:

• Non-probate assets. Assets that pass outside the estate — joint accounts with right of survivorship, retirement accounts with named beneficiaries, life insurance with designated beneficiaries, trust assets — do not pass through the administrator and do not count.
• Real estate distributed in kind. When the administrator distributes real property directly to a beneficiary without selling, the property value may not count.
• Specific bequests delivered in kind. A specific item left to a specific beneficiary that is delivered without sale is generally not subject to commission.
• Property held in joint name. Assets held jointly that pass by survivorship do not enter the probate estate.

The result is that the commission base is often significantly smaller than the decedent's total wealth. An estate with $5 million in total assets may have only $1.5 million in probate assets that pass through the administrator's hands, with the remainder passing outside probate. The commission is calculated on the $1.5 million, not the $5 million.

The "Receiving" and "Paying Out" Split

SCPA § 2307 requires that the commission be split into a "receiving" portion and a "paying out" portion. Each portion is typically half of the total commission. The split reflects the historical concept that the fiduciary earned half the commission for taking possession of estate assets and the other half for distributing them.

In modern practice, the receiving and paying out portions are calculated on the same total commission. The split is mostly a matter of how the commission is presented in the accounting rather than a substantive division of work. The administrator's actual compensation is the total of both halves.

Additional Commissions for Special Activities

Beyond the basic statutory commission, administrators can earn additional compensation for specific activities:

Property management. Five percent of gross rentals from rental property managed by the administrator. This is in addition to the basic commission and recognizes the ongoing work of managing tenants, collecting rent, and maintaining the property.

Litigation. Additional reasonable compensation for handling lawsuits on behalf of the estate. The court approves the amount.

Tax matters. Additional reasonable compensation for substantial tax work, particularly estate tax returns and audits.

Business management. Additional reasonable compensation for managing a business owned by the estate during administration.

These supplemental commissions are tracked separately and reported in the accounting. They can substantially increase the total compensation for administrators of complex estates.

Multiple Administrators

When more than one administrator serves, the commission allocation depends on the estate size:

• Estates under $100,000: One commission, divided among the administrators.
• Estates from $100,000 to $300,000: Up to two commissions, divided among the administrators.
• Estates over $300,000: Up to three commissions, divided among the administrators (with more than three administrators receiving three commissions divided among them).

This rule encourages efficient administration by limiting the proliferation of commissions when multiple administrators serve. It also reflects the practical reality that multiple administrators often do not perform proportionally more work than a single administrator would.

When the Commission Is Paid

Typically, the administrator's commission is taken at the end of the administration when the estate is being closed. The administrator includes the commission in the accounting and the beneficiaries either approve through receipts and releases or object as part of the formal accounting process.

Advance commissions can sometimes be taken during the administration with court approval. The administrator files a petition explaining why an advance is appropriate, the court reviews the request, and either grants or denies it. Advance commissions are most appropriate in long-running estates where the administrator's work has been substantial and the eventual full commission is reasonably assured.

Tax Treatment of Commissions

Administrator commissions are taxable income to the administrator. They are reported on the administrator's personal tax return as miscellaneous income. The estate gets a corresponding deduction for the commission.

One sometimes-overlooked option is for the administrator to waive the commission entirely. Waiver is sometimes appropriate when the administrator is also a beneficiary (taking the commission converts a tax-free inheritance to taxable income). Discussing the option with an accountant before the commission is taken can produce meaningful tax savings.