How Much will I be Paid (Commissions) for serving as Executor, Administrator or Trustee in NYC?
An Executor, Administrator, and/or Trustee is entitled to be paid for the work they perform in their roles in NYC. For trustees and executors specifically, it is important to review the governing instrument (that is, the Will or the Trust) to see if there is language governing how the fiduciary should be compensated. If the Will or Trust states how much you will be paid, then that is how much you will be paid. If the Will or Trust are silent on payment, you should refer to the Surrogate’s Court Procedure Act, which provides rules for computing trustees’ commissions as well as non-trustee commissions.
Calculating Executors’ Commissions Under SCPA § 2307
Section 2307 of the Surrogate’s Court Procedure Act provides rules for calculating commissions for fiduciaries other than trustees, such as executors and administrators. Section 2307 provides that commissions are calculated on the amount of property that is received and distributed by the executor. Specifically, Section 2307 states that executor’s commissions are calculated as follows:
(a) For receiving and paying out all sums of money not exceeding $100,000 at the rate of 5 percent.
(b) For receiving and paying out any additional sums not exceeding $200,000 at the rate of 4 percent.
(c) For receiving and paying out any additional sums not exceeding $700,000 at the rate of 3 percent.
(d) For receiving and paying out any additional sums not exceeding $4,000,000 at the rate of 2 ½ percent.
(e) For receiving and paying out all sums above $5,000,000 at the rate of 2 percent.
As a simple example, if an executor of an estate collects estate assets totaling $1,000,000 and distributes them in accordance with the Will, the executor will be entitled to collect commissions in the amount of $34,000, which is calculated as follows:
- 5% of the first $100,000 = $5,000
- 4% of the following $200,000 = $8,000
- 3% of the following $700,000 = $21,000
- $5,000 + $8,000 + $21,000 = $34,000
SCPA 2307 does not apply to (a) property that is specifically bequeathed in the will; and (b) awards from the September eleventh victim compensation fund of two thousand one. For example, if the testator bequeaths a gold bracelet to her sister and her house to her daughter, the executor is not entitled to collect commissions on either of these two pieces of property.
Section 2307 also provides the computation of commissions if there is more than one fiduciary. If there are one to three fiduciaries and there is at least $300,000 in the estate, each fiduciary is entitled to the full amount of commissions that a sole fiduciary would be able to collect. However, if there are more than three fiduciaries, the commissions must be apportioned to each fiduciary in accordance with the specific work performed by him or her.
The rules for multiple fiduciaries differ, however, where there is under $300,000 in the estate. If there is more than one fiduciary and the estate has less than $100,000 of property, the commissions must be apportioned to each fiduciary in accordance with the specific work performed by each fiduciary. If there are one or two fiduciaries and between $100,000 and $300,000, each fiduciary is entitled to the full commissions of a sole fiduciary. If there are more than two fiduciaries and between $100,000 and $300,000, the commissions must be apportioned to each fiduciary in accordance with the specific work performed by each fiduciary.
Calculating Trustees’ Commissions Under SCPA § 2309
SCPA 2309 provides the computation for commissions payable to trustees. Trustees are entitled to two different types of commissions – commissions on the amount of property that a trustee pays out and annual commissions.
Under Section 2309(1), the Trustee is entitled to commissions in the amount of 1% of the property that the Trustee pays out.
Under Section 2309(2), annual commissions are calculated as follows:
(a) $10.50 per $1,000 or major fraction thereof on the first $400,000 of principal.
(b) $4.50 per $1,000 or major fraction thereof on the next $600,000 of principal.
(c) $3.00 per $1,000 or major fraction thereof on all additional principal.
Before the Trustee pays himself commissions for the first time, he must choose the time of year during which he will pay himself such commissions. The Trustee can choose to pay himself at the beginning of the year or at the end of the year, which can be either a fiscal year or calendar year. However, once the Trustee chooses the time for paying his commissions, he must continue to pay himself consistently at that time of year each year. The time for payout of commissions must also be binding on all successor trustees.
Section 2309 also provides that the trustee must pay one-third of the commissions from the income of the trust and two-thirds from the principal of the trust.
Section 2309 provides for calculations of trustee commissions where there is more than one trustee. If the trust principal is at least $400,000 and there are one to three trustees, each trustee is entitled to the full commissions for paying out principal that would normally be allowed to a sole trustee under the rules. If there are more than three trustees, however, the commissions must be apportioned to each trustee in accordance with the specific work performed by each trustee.
If there is more than one trustee and the trust principal is less than $100,000, however, the commissions must be apportioned to each trustee in accordance with the specific work performed by each trustee.
If there are one or two trustees and the trust principal is between $100,000 and $400,000, each trustee is entitled to the full commissions for paying out principal that would normally be allowed to a sole trustee under the rules. If there are more than two trustees and the trust principal is between $100,000 and $400,000, the commissions must be apportioned to each trustee in accordance with the specific work performed by each trustee.
Note that the Trustees must prepare an annual accounting and provide copies of those accounting;s to the trust beneficiaries. The annual accounting’s provide information regarding the administration of the trust, including, but not limited to, what trust principal and income was received, what administration expenses were paid, and what was distributed to the trust beneficiaries. We can help you prepare annual accounting’s.
Additional resources provided by the author
For more information, please contact NYC Probate Litigation, Guardianship, NYC Probate and Estate Planning attorney Regina Kiperman:
Phone: 917-261-4514
Fax: 929-556-2089
Email: rkiperman@rklawny.com
Or visit her at:
40 Wall Street
Suite 2508
New York, NY 10005
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