How Does an Executor Get Paid in New York?

When you pass away, someone must be appointed to manage the administration of your estate. There are a variety of tasks like gathering all your estate assets, notifying creditors, filing final tax returns, and more that need to be handled by someone. If you don’t name this person in your will, the courts will appoint someone to serve instead.Executor

Most people choose to name a friend or family member, but it’s important to have a conversation first so that this other person is aware of all the responsibilities. Depending on how prepared you were with documents and strategies created while you were still alive, probate can go smoothly or can take months.

Executors do take on a lot of duties and even liability for the actions they take during estate administration, and unless you provide otherwise they are entitled to get paid. Many states provide guidelines or rules for how an executor can be compensated for the work they do. The will can also specify how much the executor is to be paid. In different states, it is usually there are two main strategies for determining the amount the executor gets paid: 1) a percentage of the value of the estate, or 2) hourly fees based on the amount of work they put in.

The commission rate in New York, is computed with the first rules and is calculated as follows: 5% of the first $100,000 inside the estate itself, 4% on the next $200,000, 3% on the next $700,000, 2.5% on the next $4 million, and 2% for any amount beyond $5,000,000.

The executor pay rate might be even higher for banks and trust companies who get paid according to their published rate schedule, especially depending on the amount of work required to administer the estate. Remember that the funds to pay the executor are taken from the estate. The more work you do ahead of time to make things easy for an executor, the less your estate value will be impacted.

For more information about executor’s fees, the duties and obligations of being an executor, or what you should think about when choosing an executor, you should schedule a time to speak with a NYC estate planning lawyer.

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