When we used to go out to dinner with my grandfather, he would always put some of his food on my plate. It wasn’t that it was cold or not tasty (though his love affair with tripe was engaged in by him and him alone), the thing was that it wasn’t what I had expected, the food that was placed on my plate was not always the part I would have preferred, and it always got entangled with my own eating affairs (I.e. the mash potatoes).
Eating other people’s leftovers is often an unsavory task, but it can be about 1 gazillion times more palatable than having to deal with another person’s estate. Sometimes the deceased person was a hoarder and leaves piles of paperwork and garbage to be collated through, other times it may be relatively monotonous work but not a lot of money to be distributed. So, while there are state statutes that give guideline Executor commissions, it is entirely within your control to give more or less than these suggested amounts.
For (simplified) reference’s sake, in New York the default an Executor earns:
- 5% for the first $100,000 probated ($0 to $100,000)
- 4% for the next $200,000 probated ($100,001 to $300,000)
- 3% for the next $700,000 probated ($300,001 to $1,000,000)
- 2 ½% for the next $4,000,000 probated ($1,000,001 to $5,000,000)
- 2% for all additional assets probated ($5,000,001 and Above)
So, an Executor’s payment for a probated estate is:
- $5,000 for a $100,000 probated estate
- $13,000 for a $300,000 estate
- $34,000 for a $1 million estate
- $128,000 for a $5 million estate
This is the case whether that money was in one account (easy) or divided between 50 accounts (absolutely awful). And while I do tell clients to try to consolidate accounts in fewer locations, some people are adamant about diversifying their investments by spreading them amongst many financial companies. If you insist on having a ridiculous number of accounts, consider stating a flat percentage (maybe 5% on all probate assets) or a flat fee the Executor shall receive.
If you know there is going to be a dispute, you may want to state than any dispute will mean the Executor shall receive double their commission. If there are large assets but the funds are all liquid, you may want to state the Executor will receive one-half the statutory commissions. If you have multiple businesses or pieces of real estate in multiple far-off states (I’m talking to you Snowbirds) you may want to modify the commission your estate will pay. And if you are a hoarder, well, get some help with that. And maybe give your Executor extra funds.
Lastly, never NEVER never EVER never state that you leave no commission to the Executor. Remember that an Executor can’t be forced to accept payment (so they can always turn it down), but they can’t be forced to do the job. If your estate will be a storm of discord and pissed off family members, make sure the person you want to handle the estate gets paid, because even the littlest problem with your wishes becomes a terrible thing once you are no longer around to deal with it.