What is the Average Fee for an Executor of an Estate?

What does state law and probate court say about how a person can determine executor fees, calculate executor fees, manage probate court, executor compensation, and reasonable compensation?  What is the average executor fee in probate court? What is considered reasonable compensation for an executor fee in probate court? Our New York estate attorney tells you what you should know and what to expect about state law in probate court.

What is the Average Executor Fee in Probate Court?

In New York State to determine executor compensation or to calculate executor fees as the probate court will set the executor fees, the personal representative must first determine the total value of the estate.  Once the total value of the estate is determined, the executor can calculate the executor fees and determine the executor fees.  Probate court traditionally has the last word to determine executor fees.  Reasonable compensation and executor fees will be impacted by the estate planning done under state law.

When a person dies and leaves a will, the will must be “admitted” to probate.  This is done in probate court.  The estate planning done by the decedent is very important to properly determine the executor fees.  To determine executor fees one must submit a petition to probate court and only after the Will is admitted to probate, does the person appointed as the personal representative have legal authority to act and reasonable compensation. Where there is no Will, the New York Surrogate’s Court will usually appoint an estate administrator to fill the personal representative role who will all be entitled to reasonable compensation and the formula used to determine executor fees is the same formula used to determine the reasonable compensation of the estate personal representative.

The responsibilities of the personal representative will involve complicated tasks which is why they are paid executor fees and reasonable compensation. Individuals who act as the personal representative can calculate executor fees. State law governs the formula to determine executor fees.  Those executor fees are sometimes handled in the estate planning phase when there will be a waiver of executor fees in probate court.

Personal representative of estates can determine executor fees.   The personal representative of an estate is entitled to executor fees and reasonable compensation.  To determine executor fees one has to calculate executor fees based on the formula provided by probate court.  The probate court will grant the executor reasonable compensation or what is considered reasonable compensation. Provided the personal representative has acted in the role the way the probate court expects a personal representative to act.  In the event the personal representative does not act in the way the probate expect them to act the executor compensation may be reduced to nothing.

However, probate court strictly regulates executor compensation.  What are executors paid on average?

Can executors of estates be paid for their work from probate court?

A personal representative of an estate in New York is generally entitled to receive reasonable compensation for the work they do for probate court.

The fee is usually paid from the estate unless it is waived by the personal representative or the decedent said no fees where to be paid in the estate planning phase.  To determine executor fees the probate court must determine the value of the estate.

Executors usually can expect payment after the estate’s bills are paid and before the estate is distributed to the beneficiaries. Also, there is no automatic right to advance payment of commission – executors are usually paid at the conclusion of the estate. However, under New York SCPA 2310 and 2311, the executor can apply to the probate court for the advance payment of commissions.

The amount an executor is paid in New York is set by law, in SCPA 2307

How much an Executor is paid in New York is determined as a percentage of the estate. These percentages also constitute the average in practice, exclusively set and used by the New York Surrogate Court and Probate Court across the state.

Accordingly, it is not necessary to have the testator include a fee term in the Will before the personal representative can be entitled to receive that fee. To calculate executor fees the executor fees are on a sliding scale between 2 and 5% of the total amount of estate money the executor receives and pays out is how you determine executor fees.

Under the Surrogate Court’s Rules, the executor fee is;

• 5%, where the money total received and paid out does not exceed $100,000,
• 4%, where the money total received and paid out does not exceed $200,000,
• 3%, where it does not exceed $700,000,
• 2.5%, where it does not exceed $4,000,000
• 2%, for sums exceeding $5,000,000

To calculate executor fees follow this link to determine executor fees in probate court. 

It is important to note that how much an personal representative can be paid may be lower than these amounts, or it may be even higher, where the testator sets a fee in the will. As previously mentioned, as a personal representative who is also a beneficiary, you may waive the fees entirely especially since they amount to taxable income, unlike a bequest/distribution. 

Where there is more than one personal representative, depending on the size of the estate, the fees are generally to be shared among the executors based on the services rendered by each of them, unless the decedent has specifically provided otherwise in writing.

If the value of the estate is over $100,000 but less than $300,000 each executor (up to 2) is entitled to the full fee allowed to a sole executor. Where they are more than 2, the total fee allowed to 2 fiduciaries must be proportionately shared. 

Where the assets exceed $300,000, then each executor (up to 3) is entitled to the full fee allowed to a sole fiduciary. Where there are more than 3 executors, the full fee allowed to 3 fiduciaries must be shared among them proportionately also. 

When a personal representative cannot take a fee

A testator can specify in the Will that the named personal representative (or any successors) must waive commissions and reasonable compensation order to be eligible to serve. 

But this should only happen where the person named is a beneficiary of the estate or a very close personal friend, because of the time-consuming and stressful nature of a the personal representative work. 

Also a personal representative may choose yo not serve as an Executor of an estate unless it is entitled to commissions and reasonable compensation, although an attorney may agree to serve without commissions (or for reduced commissions) or reasonable compensation if the firm will receive legal fees and reasonable compensation for work done during the estate administration.

There are also certain assets in the estate that are not probate assets and, therefore, will not be considered as part of the estate for purposes of calculating the personal representative fee. Such assets include; 

• Proceeds from a life insurance policy, 
• Assets in a 401(k) plan, and 
• Assets held in an inter vivos trust

Let our experienced estate attorney help

It is important to completely understand your circumstances as the executor of an estate in New York so you are not denied any deserved benefits. Your compensation for the services you perform in the administration of an estate may be an entitlement, and one protected by law. 

You should discuss your concerns, if there are any, with an experienced estate attorney. Attorney Jimmy Wagner can assist you with understanding how the law applies. Please get in touch with an experienced New York estate attorney today by contacting us at 929-477-8889 for help.