New York Executor Fees
Part of the process of making a will is appointing a person or entity to be responsible for managing your estate once you pass away. That person is referred to as the executor of your estate. If you do not leave a will, then the New York Surrogate’s Court will appoint an estate administrator to fill the executor’s role. Upon your death, your estate must go through an administration process that begins with your will (if you have one) being submitted to the court. The Surrogate's Court will review the will to make sure that it is valid. The executor will manage your estate and ultimately distribute your assets to the beneficiaries you named in your will according to the terms of your will. The process of managing an estate can be complicated, time-consuming and lengthy, involving the inventorying of estate assets, payment of estate bills, and addressing litigation and other complications that develop during the administration process. Because of the work involved in fulfilling the duties of an executor, under New York Estates, Powers & Trusts Law executors are entitled to be paid a reasonable fee. To learn more about executor fees, contact an experienced New York executor fees lawyer at the Law Offices of Stephen Bilkis & Associates.Duties of an executor
An executor is charged with the responsibility of the overall management of a decedent’s estate, and the ultimate distribution of the assets to the beneficiaries named in the will. The executor’s activities are overseen by a Surrogate’s Court judge. If there is no will, the estate administrator has essentially the same responsibility. The main difference is that an executor has the decedent’s will to guide his activities while an estate administrator does not. The primary responsibilities of an executor include:
- Identifying, inventorying, and probate property. This includes taking appropriate steps to maintain and safeguard the property to prevent waste.
- Appraising probate property. The executor must understand the value of the estate at the time of the decedent’s death. The value of the estate, plus the income earned during administration may be critical in determining the amount of compensation to which the executor or administrator is entitled. To get an accurate appraisal, it may be necessary to get expert help from a professional appraiser. As an experienced executor fees attorney in New York will explain, a common reason for mistakes in calculating executors fees is failing to make an accurate determination of the value of the estate.
- Paying estate debts. Before distribution of assets, the executor must pay estate debts, pay expenses, and settle claims. He (or she) must also pay expenses related to administration and pay outstanding federal and local taxes.
- Collecting money owed to the estate. The decedent may have been owed money at the time of his death. This may include the decedent’s final paycheck, benefits such as pension or veteran’s benefits, and rent from investment property.
- Distributing assets. The executor is also responsible for distributing assets that remain in the estate after bills are paid based on the terms of the will.
In order to be entitled to receive a fee, it is not necessary for the testator to have included a fee term in the will. By law executors are entitled to reasonable fees for the work they do as fiduciaries.
General rule. Under New York Surrogate's Court Procedure section 2307, executor fees are based on the value of the probated estate. Fees range between 2 and 5% of the total amount of estate money the executor receives and pays out.
Under the Surrogate's Court's rules, executor fees are calculated as follows:
- For receiving and paying out money not exceeding $100,000, the executor fee is 5%
- For receiving and paying out additional money not exceeding $200,000 at the rate of 4%
- For receiving and paying out additional money not exceeding $700,000 at the rate of 3%
- For receiving and paying out additional money not exceeding $4,000,000 at the rate of 2.5%
- For receiving and paying out all sums above $5,000,000 at the rate of 2%
However, the testator may decide on a different fee for the executor and specify it in the will. In addition, if the executor is also a beneficiary, it is common for the executor to waive the fee as the fee is taxable income while a distribution is not.
Multiple executors. If there is more than one executor, then the fees are to be apportioned among the executors based on the services rendered by each executor. However, if the value of the estate is over $100,000 the rules are different. It the estate is valued at $100,000, but less than $300,000 each executor is entitled to the full fee allowed to a sole executor unless there are more than 2 executors in which case the full fee allowed to 2 fiduciaries must be apportioned among them according to the services rendered by them respectively. If the assets exceed $300,000, then each executor is entitled to the full fee allowed to a sole fiduciary unless there be more than 3, executors in which case the full fee allowed to 3 fiduciaries must be apportioned among them according to the services rendered by them respectively.
Corporate executor. As an experienced New York executor fees lawyer will explain, the rules for corporate executors are a little different and may be based on the fee mentioned in the will. That fee may be a specific amount or percentage stated in the will or it may refer to the corporation's published fee schedule.
Assets not Included in fee base. There are certain assets that may be part of the decedent's overall estate that are not probate assets and, therefore, will not be considered as part of the estate for purposes of calculating the executor's fee. Such assets include proceeds from a life insurance policy, assets in a 401(k) plan, and assets held in an inter vivos trust. In addition, prroperty given by specific bequest is excluded. For example, if a will included the following bequest: My 1966 Mustang to my nephew, Ralph Jones, the value of the mustang would be excluded for purposes of determining executor fees. For more information as to which assets are excluded, contact an experienced New York executor fees lawyer.Examples
The value of the probate estate is $1,000,000. The fee would be calculated as follows:
$100,000 x 5% = 5,000
$200,000 x 4% = 8,000
$700,000 x 3% = 21,000
The executor's fee would be $34,000
The value of the probate estate is $50,000. The fee would be calculated as follows:
$50,000 x 5% = 2,500
The executor's fee would be $2,500Contact the Law Offices of Stephen Bilkis & Associates
If you are the executor of an estate in New York and have questions related to compensation for services you performed related to administration of the estate, it is important that you discuss your concerns with an experienced executor fees attorney serving New York. The staff at the Law Offices of Stephen Bilkis & Associates has years of experience representing executors, estate administrators, beneficiaries, heirs, and fiduciaries in matters related to estate administration and estate litigation. Contact us at 1-800-NY-NY-LAW (1-800-696-9529) to schedule a free, no obligation consultation regarding your case. We represent clients in the following locations: Queens, Bronx, Nassau County, Suffolk County, Brooklyn, Long Island, Manhattan, Staten Island, and Westchester County.