Executor Compensation and Fees (NY)
If the will does not specify how executor compensation should be calculated, NY estates must follow state compensation rules (see NY calculator below).
In New York, the estate executor is known as a "fiduciary" (note that the information below does NOT apply to fiduciaries managing trusts; see NY trustee compensation for trusts).
While executor compensation for NY estates appears relatively straightforward on the surface, the details can become a bit complex. Fundamentally, New York determines compensation, or commission, based on "funds received and paid out":
- 5.0% on the first $100K
- 4.0% on the next $200K
- 3.0% on the next $700K
- 2.5% on the next $4M
- 2.0% on anything more
So, for example, a New York estate settlement that had $50K such funds received and paid out, would yield $2,500 in executor fees, and one with $750K would generate $26,500 in executor fees.
At a high level, "funds received and paid out" often roughly equate to the gross value of the estate. At death, the executor becomes responsible for the assets (i.e., funds into the estate), and ultimately, they should be disbursed (funds out of the estate). There are some exceptions, however, that should not be included in these calculations:
- assets that flow directly to an heir outside of probate, such as a 401K with a named beneficiary
- jointly held assets that are automatically inherited by the other owner(s)
- real estate that is not sold
- assets that are directly bequeathed in a will
Moreover, sometimes the value of an estate changes during the course of settlement, due to events such as income produced by the estate, changes in the valuation of stocks, and so forth. These fluctuations may usually be minor in the overall scheme of things, but nevertheless they are considered under the law.
Since not every "fund received" is necessarily balanced by a "fund paid out", and the compensation calculations are based on funds received and paid out, half the tier rate is applied to the funds received, and half to the funds paid out.
- Oversimplification of Tiers: There are a number of online calculators that grossly simplify the NY executor compensation calculation. For example, it is not correct to simply multiply the estate value by the tier percentages, or to assume that "funds in" equal "funds out", or even to assume that you can just add them together and use the tiers for a combined number.
- Overlooking Debt: Debt payments should be considered funds paid out. This highlights just one of the pitfalls of attempting to use gross or net value of the estate as funds in/funds out: "funds received and paid out" is a separate concept. Note that gross value is used as a separate element in the calculations when dealing with splits among multiple executors.
- Including Excluded Items: Pay careful attention to the list of exclusions that should not be included in the calculations, and in particular note that bequests do not count as funds paid out or received.
- Accounting for Real Property: When calculating executor fees for real estate that has been sold, note that the sale price should be counted as funds in, and that the sale proceeds will be naturally included in funds paid out as disbursed. The value of the real estate at the time of death is irrelevant to these fee calculations.
- Assets not excluded above are considered to be "funds paid in/out" for these calculations.
- If income generated by the estate during your executorship is required to be withheld for taxes, that income still counts as funds received.
- In addition to all the above, you can keep 5% of any rent generated by real property you have to manage during the executor process.
- There are special rules surrounding compensation of multiple executors (handled automatically by EstateExec below)
See New York Surrogate's Court Procedure § 2307 for even more complex details and exceptions, including handling guardian-related compensation.
NY Compensation Calculator
EstateExec provides the following executor compensation estimator for NY estates, but please keep in mind that circumstances may vary, and that there may be special situations addressed by local custom or law. By using this estimator, you acknowledge that EstateExec provides any results as informational input only, not as legal advice, and cannot be held responsible for any inaccuracies for, or misunderstandings about, any given estate.
You can use this calculator now, but if you use EstateExec to help you track the settlement process, it will automatically perform the sometimes complex calculations to provide inputs for the fields below (you can create an estate for free).
To calculate NY executor compensation, follow these steps:
- Enter funds received into the estate (subject to restrictions listed above)
- Enter funds paid out of the estate (subject to restrictions listed above)
- Enter estate gross value as of death
- Enter any rent collected for an estate property you managed
- Enter the number of executors
- Press the Calculate Now button
If you are using EstateExec, it will automatically calculate and populate the above fields from the contents of your estate, which you can override if desired.
See also Compensation for general remarks on executor compensation.