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. Once you pass away your last will and testament will go through a process called probate. During this period the New York 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 problems related to the estate. Because of the work involved in fulfilling the duties of an executor, under New York law executors are entitled to be paid a reasonable fee. If you have been named as an executor in a will, contact a New York Executor Fees Lawyer who will explain to you the duties and responsibilities of being an executor and who will also explain to you the fee to which you are entitled to for acting as an executor.Fee Calculation
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.
Corporate Executor. 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 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.
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 $2,500
Serving as an executor of an estate is a lot of work and executors are entitled to receive payment. However, as a fiduciary of the estate it is important that the fee you charge for serving as the executor is consistent with statutory requirements. In addition, it is important to understand that the fee you receive is taxable. In order to make sure you understand how to calculate your executor fees, contact an experience estate attorney. The staff at Stephen Bilkis & Associates, PLLC has extensive estate planning experience and frequently represents clients before the New York Surrogate's Court. Contact us at 800.696.9529 to schedule a free, no obligation consultation regarding your estate matter.