When someone dies, their estate goes through a legal process known as probate in order to transfer ownership of assets to the heirs or beneficiaries. As an executor, it's your responsibility to carry out the wishes of the deceased as outlined in their will and see that the estate is properly administered.

Because of the time and effort required to settle an estate, executors may be entitled to compensation paid for by the estate. Read on to learn more about executor compensation in New York State.

What are the executor fees in New York?

These are the executor fees in accordance with the SPCA Act §2307(f) in New York by estate size:

• 5% on the first $100,000 in the estate,
• 4% on the next $200,000
• 3% on the next $700,000
• 2-1/2 % on the next $4,000,000
• 2% on any amount above $5,000,000

For example:

You’re an executor of an estate worth $1,500,000 - here is how you calculate your compensation fee.

First $100,000 of the estate - 5% fee. 0.05 x $100,000 = $5,000

Value of estate: $1,400,000

Next $200,000 - 4% fee. 0.04 x $200,000 = $8,000

Value of estate: $1,200,000

Next $700,000 - 3% fee. 0.03 x $700,000 = $21,000

Value of estate: $500,000

Remaining $500,000 - 2.5% fee. 0.025 x $500,000 = $12,500

For completing your fiduciary duties as an executor of an estate worth $1,500,000 in New York you are entitled to an executor's compensation of $46,500.

Let’s do another example:

You’re an executor of an estate worth $800,000 - here is how you calculate your executors fee.

First $100,000 of the estate - 5% fee. 0.05 x $100,000 = $5,000

Value of estate: $700,000

Next $200,000 - 4% fee. 0.04 x $200,000 = $8,000

Value of estate: $500,000

Remaining $500,000 - 3% fee. 0.03 x $500,000 = $15,000

As an executor of an estate worth $800,000 - you are entitled to receive a $28,000 compensation for completing your fiduciary duties.

Executor fees may vary if there are co-executors

If the value of the estate is over $300,000, each fiduciary is entitled to full payment for their work. However, If there are MORE than three (3) fiduciaries, they must have a written agreement on how to equally divide the money - no single person is allowed to have a higher percentage than the other co-executors.

If an estate is worth less than $100,000 and there is more than one person in charge of it, then the total commission that needs to be paid must be divided among all the people who helped, according to how much work each person did.

If two fiduciaries are appointed to an estate with a total value over $100K, but less than $300,000 they are entitled to receive the full fee allowed as if they were single fiduciaries. However, if there are more than two fiduciaries - the full compensation for receiving and paying out principal and income must be divided between them according to how much work each one did.

Is the executors fee taxable?

In the state of New York, executor fees are considered to be taxable income. This is in line with the IRS's treatment of executor fees, which are considered to be "compensation for personal services." As a result, any executor fees that you receive should be reported on your state tax return.

In addition, you may also be responsible for paying federal taxes on executor fees, depending on the amount that you receive. However, there are some exceptions to this rule. For example, if the executor is also a beneficiary of the estate, they may not have to pay taxes on the fees they receive - they can choose not to charge a fee, rather INHERIT their compensation. Therefore, it is important to speak with an accountant or tax attorney to determine if executor fees are taxable in your specific case.

If you are named as an executor of a will in New York, there are some essential things to keep in mind when it comes to receiving your compensation. First, your compensation is dependent on the size of the estate, but can vary if there are co-executors. In addition, any income earned by an executor from their role is subject to income tax. Contact or call us if you have any further questions regarding your compensation or helping settle your estate.