Executors or administrators are entitled to payment for their time and effort spent closing the estate. However, the amount of these commissions can vary widely depending on state laws and the overall value of the estate.
How Much Will I Be Paid for Administering an Estate in New York?
Executor fees are calculated using the combined value of the assets and income of the estate. Under the New York Surrogate’s Court Procedure Act 2307, administrators may be eligible for the following fees:
- 5 percent of an estate with a total value under $100,000
- 4 percent of an estate with a total value under $200,000
- 3 percent of an estate with a total value under $700,000
- 2.5 percent of an estate with a total value under $4,000,000
- 2 percent of an estate with a total value under $5,000,000
Commissions May Change if There Are Multiple Executors
You may not be the only person in charge of closing the estate. Some people entrust business associates, relatives, and disinterested parties to act as fiduciaries—each with a specific role to play. If the person who created the will or trust has named two (or more) fiduciaries, you will have to work together with your co-executors to gather assets, file paperwork, and pay debts—and you may have to split the commission multiple ways.
In New York, commission rules for multiple executors include:
- Split fees. If an estate is valued at less than $100,000 and there is more than one fiduciary, the total commission owed must be divided among all of the fiduciaries according to the services rendered by them respectively.
- Equitable fees. If there are two fiduciaries to an estate valued at more than $100,000 but less than $300,000, each fiduciary is entitled to the full fee allowed to a single fiduciary. If there are more than two fiduciaries, the full fee allowed to two fiduciaries must be divided among them according to the proportion of services each has rendered.
- Negotiated fees. If an estate is valued at $300,000 or more and there are fewer than three fiduciaries, each fiduciary shall collect the full fee allowed to a single executor. However, if there are more than three fiduciaries, the combined fee owed to all three fiduciaries must be divided among them according to work they have performed in the duty to the estate and the complexity and extent of the services rendered by each respectively. These rules stand unless the fiduciaries have otherwise created a written agreement among themselves as to how the fees will be divided.
What Should I Do Before Collecting My Fee?
In most cases, executor fees are paid during the creditor portion of probate proceedings. After the estate’s bills are paid, the executor can collect payment before the rest of the estate is distributed to the beneficiaries. This should be done carefully since beneficiaries can take legal action against executors for requesting too much from the estate.
Before collecting payment for your services, you should:
- Determine if there are any exclusions. Some assets may be excluded when calculating the total value of the estate. For example, assets that do not go through probate—such as trust funds, joint assets with rights of survivorship, payable on death accounts, or real estate that is not sold by the executor—are not included when calculating fees.
- Examine your tax liability. If you are a beneficiary of the estate, any funds that are left to you as an heir are not considered taxable income. However, executor commissions are considered taxable income, so you should keep careful records of how each asset or payment came into your possession.
- Speak with a lawyer. Since the rules regarding executor fees can be complicated, it is important to consult with a New York probate attorney before collecting any fees for your work as an administrator.
If you need help administering an estate in New York, Landskind & Ricaforte Law Group can answer your questions and make the probate process as smooth as possible. Contact us today through our online form to learn how we can help.