Thursday, November 24, 2022

How Much Does An Executor Get Paid In New York

Do/should You Receive Payment For Serving As Executor

How Much Can a Trustee, Executor, and Power of Attorney Be Paid?

Theres nothing wrong with accepting compensation for handling an estate. You are entitled to receive compensation for your work. In some cases, it will be stated in the will, in others it will be based on the state of residency of the will writer.

If you need more help deciding if you should accept compensation for serving as executor, read this guide.

If youd like a bit more help understanding the estate settlement process, you can answer a few simple questions and get a free custom executor plan here on Executor.org.

And, here are the executor fees by state, so you know how much compensation is reasonable.

How Much Is An Executor Paid

An executor is the individual appointed to administer someones Last Will and Testament. An executor of a New York estate is not expected to administer a decedents estate for free. Executors receive a set commission, paid out of the estate. Commissions are calculated as a percentage of the value of the probate estate, less any specific legacies, bequests, and devises. The probate estate is all property held in the decedents sole name at the time of death. Thus, the probate estate does not include jointly held accounts or real property with rights of survivorship. Likewise, any account naming a beneficiary is paid directly to the beneficiary and not to the estate. This usually means pension plans, life insurance, transfer on death accounts, and IRAs are not part of the probate estate. Notably, a Last Will and Testament can provide a different fee structure, superseding the statute. Executors also have the option of waiving compensation.

The Surrogates Court Procedure Act sets forth the statutory commission rates in New York. The commission rate for each executor is 5% on the first $100,000 in the estate, 4% on the next $200,000, 3% on the next $700,000, 2.5 % on the next $4,000,000 and 2% on any amount above $5,000,000. To illustrate, if the value of a New York estate is $1,000,000 and there is one executor, the commission is calculated as follows:

$100,000 x 5% = $5,000

$700,000 x 3% = $21,000

Total: $34,000

Rules For Executors Who Are Not Us Citizens

Under most circumstances, New York law requires your executor to be either a U.S. citizen or a non-U.S. citizen living in New York. A judge won’t appoint an executor who is not a U.S. citizen and lives outside of the state, unless you also name a coexecutor who is a resident of New York and the judge approves.

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How Do You Compensate The Executor Of A New York Estate

When making your will, one issue you need to consider is how to compensate the executor of your estate. If you have a particularly complex estatei.e., one with a lot of assets that will take time to liquidateit may take your executor many months to complete the New York probate process. Indeed, by law an executor is entitled to a certain statutory commission unless the deceased specifies a different method of compensation in their will.

To give you some idea of how the statutory commission works, lets say John Smith dies leaving an estate worth $200,000. New Yorks statutory commission rule states the executor may receive no more than 5 percent of the first $100,000 and 4 percent of the next $100,000 , for a maximum commission of $9,000.

Surrogates Court Awards $106.5 Million Commission to Executors of Leona Helmsley Estate

Of course, these numbers start to increase exponentially when talking about multi-million or multi-billion dollar estates. Consider this recent decision from a Manhattan Surrogates Court judge regarding the estate of Leona Helmsley. The famous New York City businesswoman passed away in 2007, leaving an estate worth approximately $5 billion.

As the Surrogates Court judge explained, there are a number of factors that courts apply when determining reasonable compensation, such as the time spent on the estate, the value of the assets, and the difficulty of the issues and the skills required to handle them.

How Long Does Probate In New York Take

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Even a small estate will take some time to be settled. Expect it to be at least six months before the assets may be distributed to the heirs and probate to be closed. However, one year is a more likely timeline for most estates. This time can be extended even more if there are delays, such as an heir contesting the will or disputes with creditors. Some estates are open for years as issues are dealt with.

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Executor Fees In Maine

Maine is a reasonable compensation state for executor fees.

In states that use reasonable compensation to determine executor fees, it means compensation is determined by the probate court. Typically, the probate court will find executor compensation reasonable if it is in line with what people have received in the past as compensation in that area.

For example, if in the last year, executor fees were typically 1.5%, then 1.5% would be considered reasonable and 3% may be unreasonable. But the court can take into account other factors such as how complicated the estate is to administer and may increase or decrease the amount from there.

Common Probate Fees In New York

Even though the final cost to go through probate will range, there are actually several fees that youll most likely need to pay. Some of these fees can include:

  • Miscellaneous court and filing fees

  • Attorney fees

  • Personal Representative compensation – New York sets Executor compensation by statute, ranging from two percent to five percent of the estate value

  • Various professional fees

  • Executor/Administrator/Probate Bonds are required by New York county courts

  • Etc.

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Is The Personal Representative An Institution

Sometimes the named executor is an institution such as a bank or a trust company. In this case, look to see if the will specifies that the institution is entitled to receive compensation in accordance with its published fee schedule as of the date of the decedent’s death.

These fee schedules are similar to state laws that calculate the fee as a percentage of the value of the gross estate. State law will dictate the institution’s fee in this case as well if the will is silent on the issue.

Executor Fees In Vermont

Probate Costs in New York

While Vermont uses the term necessary expenses, it can be interpreted as being a reasonable compensation state for executor fees.

In states that use reasonable compensation to determine executor fees, it means compensation is determined by the probate court. Typically, the probate court will find executor compensation reasonable if it is in line with what people have received in the past as compensation in that area.

For example, if in the last year, executor fees were typically 1.5%, then 1.5% would be considered reasonable and 3% may be unreasonable. But the court can take into account other factors such as how complicated the estate is to administer and may increase or decrease the amount from there.

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Executor Fees: What You Can Expect To Pay In 2022

Some people may feel guilty about taking money for serving as the executor of a will. This is understandable, as the people youll be working with will undoubtedly be grieving. However, being an executor can be a time-consuming job that can take weeks or even months. Thats why most executors are entitled to receive some sort of payment for their services, either through the terms of the will or by state law.

A financial advisor can help you create an estate plan for you and your familys needs and goals.

Recommendations For Appointing An Executor Of An Estate In New York:

  • As stated above, the estate executor appointed by the testator should be trustworthy. A person or institution that can be trusted with closed eyes, who will not misuse the assets or property.
  • Although it can be any trustworthy person, it is generally recommended that it be a close relative.
  • The executor should be financially responsible. This considering that the executor will have the task of administering the entire estate and distributing it according to the will of the deceased.
  • Keep in mind that the executor will have to administer the estate before distributing it. The executor will have to pay taxes, debts, and costs. It is important that the executor be able to make all of these payments without misappropriating the funds.

Lets look at some situations below:

Can a nonresident alien be named executor?

A nonresident alien is someone who is neither a U.S. citizen nor a resident of the United States. There are some circumstances in which a nonresident alien can be an executor.

Some points to keep in mind:

Can an executor also be a beneficiary?

The answer to this question is yes. It is very common for the executor to also be a beneficiary of the will. This is because many people name as executors a close relative whom they trust.

In many cases, the testator may even name one or more beneficiaries as executor, co-executors or successor executors.

Can there be more than one executor?

What does a successor executor do?

When does the executors duties become effective?

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Accepting Compensation Isn’t Required

Even if the will provides for compensation and sets a certain amount, an executor need not accept payment. Sometimes, close family members are reluctant to do so, because they’re effectively taking the funds from other beneficiaries, who will only get what’s left after the executor and other expenses are paid. If you find yourself in that situation, you don’t have to feel compelled to take the money.

How Do Multiple Executors Get Paid In New York

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If a New York estate has multiple executors, both executors are entitled to be paid commissions, although the calculation is slightly different.

If the New York estate is valued at less than $100,000, the commission allowed to be paid to a single executor is divided among all of the executors. The commission is divided according to the services rendered by them.

If the New York estate is valued between $100,000 and less than $300,000, then each executor is entitled to a full fee as would a single executor if there are only two executors. If there are more than two executors, then the fee allowed to two executors is divided amongst all of the executors according to the services rendered by them.

If the New York estate is valued at $300,000 or more, each executor is entitled to a full fee as would a single executor unless there are more than three executors. If there are more than three executors, then the fee allowed to be paid to three executors is divided amongst all of the executors according to the services rendered by them.

This rule is also found in New York SCPA 2307.

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How Are Corporate Estate Executors Paid In New York

The commissions paid to a corporate executor for administering a New York estate can be different than an individual executor. The commissions may be based on a fee set forth in the decedents will or based on the corporations fee schedule. Section 2307 of the SCPA states:

If the will makes provisions for specific rates or amounts of commissions for a corporate executor, or, if a corporate executor has agreed to accept specific rates or amounts of commissions, or, if the will provides that a corporate executor shall receive commissions as provided or stipulated in the corporate executors published schedule of fees in effect at such time or times such commissions become payable, including a stipulated minimum commission and asset base for calculating such commissions, a corporate executor shall be entitled to be compensated in accordance with such provisions, agreement or schedule, as the case may be, even though such provisions, agreement or schedule are not executed in accordance with the provisions required for wills and are not attested as required for the recording of deeds in this state.

Such commission shall be computed separately for receiving and for paying out sums of money, at one-half the statutory rates for receiving and at one-half the statutory rates for paying out sums of money.

Executor Fees In Indiana

Indiana is a reasonable compensation state for executor fees.

In states that use reasonable compensation to determine executor fees, it means compensation is determined by the probate court. Typically, the probate court will find executor compensation reasonable if it is in line with what people have received in the past as compensation in that area.

For example, if in the last year, executor fees were typically 1.5%, then 1.5% would be considered reasonable and 3% may be unreasonable. But the court can take into account other factors such as how complicated the estate is to administer and may increase or decrease the amount from there.

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Executor Fees In California

California sets executor compensation by statute.

In states that set specific executor compensation rates by statute, you must use these statutes to calculate executor fees.

So how much should an executor of an estate be paid in California?

Executor fees in California are subject to this formula:

  • Four percent on the first $100,000
  • Three percent on the next $100,000
  • Two percent on the next $800,000
  • One percent on the next $9,000,000
  • One-half of one percent on the next $15,000,000
  • For all amounts above $25,000,000, remaining executor fees in California are to be a reasonable amount as determined by the court

Executor Fees And Taxes

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A final question you might be wondering is, Are estate executor fees taxable income?” The answer is yes, they are, and this is one big reason an executor may choose to waive payment.

An executor may always decline to accept a feesome people simply find taking money for serving as an executor of a loved one’s estate to be awkward. But refusing executor fees makes particular sense when the executor is also set to inherit from the estate. This is because executor fees are considered taxable income for state and federal taxes, whereas inheritances are generally not.

While the above gives a general overview of executor fees, you may find it beneficial to consult with an estate planning attorney who is knowledgeable about your state’s laws as you navigate the probate system.

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Executor Fees In Washington

Washington is a reasonable compensation state for executor fees.

In states that use reasonable compensation to determine executor fees, it means compensation is determined by the probate court. Typically, the probate court will find executor compensation reasonable if it is in line with what people have received in the past as compensation in that area.

For example, if in the last year, executor fees were typically 1.5%, then 1.5% would be considered reasonable and 3% may be unreasonable. But the court can take into account other factors such as how complicated the estate is to administer and may increase or decrease the amount from there.

Does The Executor Of A Will Get Paid In Ny

If you want to know if an executor of a will gets paid in NY. The answer is yes. Executors of Estates in NY are not expected to carry out their responsibilities free of charge. They are usually entitled to compensation. This compensation is called commissions. The amount an executor is paid in NY is set by law, in SCPA 2307. Here are the commission percentages:

5% of the first $100,000 4% of the next $200,000 3% the next $700,000 2.5% of the next $4 Million 2% of the rest of the value of the estate

If you would like to consult with an attorney, you can send us an email at .

Here is our interactive calculator for how much is an executor paid in NY, for help with the math involved:

To figure out how much an executor gets paid in NY, seek the advice of an estate attorney. The answer can be trickier than people think.

Keep in mind that the statute requires that commission be split between receiving and paying out. The amount the executor gets paid will be the same as above, but listing it will look different, as the receiving fee and paying out payments will be specified, each being half of the total executor payment calculated.

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Executor Fees In Ohio

Ohio sets executor compensation by statute.

In states that set specific executor compensation rates by statute, you must use these statutes to calculate executor fees.

So how much should an executor of an estate be paid in Ohio?

Executor fees in Ohio are subject to this formula:

  • First $100,000 is 4%
  • Greater than $400,000 is 2%

Other New York Restrictions On Out

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Aside from the rules for executors who are not U.S. citizens described above, New York does not impose special requirements on executors who live out of state. But that doesn’t mean it’s a good idea to appoint someone who lives far away. For practical reasons, it’s usually best to name an executor who lives near you. Your executor may have to handle day-to-day matters for weeks, months, or sometimes longer.

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How Much Does An Executor Get Paid In New York

The executor of a New York estate is not expected to administer the estate for free. Instead, a New York executor is entitled to get paid a commission based on the size of the estate.

New York SCPA 2307 provides that the executor of an estate must be allowed and paid the following commissions for his or services as executor:

Value of Estate

For receiving and paying out all sums of money not exceeding $100,000

For receiving and paying out any additional sums not exceeding $200,000

For receiving and paying out any additional sums not exceeding $700,000

For receiving and paying out any additional sums not exceeding $4,000,000

2.5%

For receiving and paying out all sums above $5,000,000

Therefore, if the value of the estate subject to commissions is $1,000,000, the New York executor would be paid $34,000, calculated as follows:

$100,000 x 5% = 5,000

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