Executor Fee Calculator (NY)
If the will does not specify how executor compensation should be calculated, NY estates must follow state compensation rules.
Click to scroll to NY Fee Calculator.
How Much Should an Executor be Paid in NY?
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.
COMMON MISTAKES:
- 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.
OTHER POINTS:
- 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).
Calculator Instructions
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.
Executor Compensation Considerations
Timing: Generally, any executor compensation is paid during the final stages of estate distribution, as one of the last things the executor does. Be careful in situations in which there is not enough to pay yourself and all other outstanding debts, as this may expose you to legal issues. However, in most states, executor compensation has precedence over almost all other debts (for example, in NY, only funeral expenses have a higher precedence).
Communication: You may wish to discuss your compensation with the other heirs early during the process, so they don't end up surprised and unhappy when they notice their shares are somewhat less than expected. You may also want to leave the door open to modify your planned compensation as the process unfolds and you determine how much or how little work will actually be required on your part.
Optional: Keep in mind that collecting executor fees is optional. Even if the will specifies compensation, or if state laws support specific fees, the executor can choose to forego that compensation, and many do. That being said, serving as an executor is A LOT of work, and there's a reason that state laws support such compensation.
Tax Optimization: One reason an executor might choose to forego explicit compensation is that executor compensation is taxable, while inheritances are generally not taxable. Consequently, if the entire estate (or a large portion of it) is going to be inherited by the executor, you may end up with more after-tax value if you forego executor compensation.
Trusts: Note that trustee compensation for managing a trust is handled differently than that of executor compensation for settling an estate (see Trustee Compensation).
Expense Reimbursement: In addition to compensation for his or her services, an executor is also entitled to reimbursement from estate proceeds for legitimate and reasonable estate administration costs, such as death certificate copies, notarization of documents, the EstateExec licensing fee, and even travel costs strictly associated with managing the estate. Once you have established an estate banking account, you can often pay for these costs directly from that account, so that no reimbursement is necessary, but you should keep good records in case you later have to justify your expenditures to the IRS or to estate heirs. Executor expenses can be reimbursed when desired, although certain probate proceedings may require prior approval. While executor expenses are generally not considered when calculating executor compensation (i.e., executor fees), if the executor incurs substantial costs paying for services that would normally be directly handled by an executor, a probate judge may sometimes require that the default executor fee be reduced accordingly.
Additional Information
See also the EstateExec Complete Executor Guide.
In case you're interested, see also Compensation for general remarks on executor compensation, and note that authoritative details about executor compensation in other states can be found here: