New Jersey sets executor commissions by statute. An executor is generally entitled to a commission of 5 percent on the first $200,000 of the estate’s corpus, 3.5 percent on the amount from $200,000 to $1,000,000, and 2 percent on amounts above $1,000,000, plus a commission of 6 percent on income the estate earns. Additional amounts may apply when there is more than one executor. Many family executors choose to waive commissions.
Serving as executor in Bergen County can take many months. Understanding what compensation the law allows helps executors and beneficiaries plan and avoid disputes.
How Corpus Commissions Are Calculated
| Portion of the Estate Corpus | Commission Rate |
|---|---|
| First $200,000 | 5 percent |
| From $200,000 to $1,000,000 | 3.5 percent |
| Over $1,000,000 | 2 percent |
Example: For an estate with a corpus of $600,000, the commission would generally be $10,000 on the first $200,000 plus $14,000 on the next $400,000, for a total of about $24,000.
The corpus generally means the principal assets the executor handles. Assets that pass outside the estate, such as life insurance paid to a named beneficiary, are typically not included.
Jointly owned property and accounts with payable-on-death beneficiaries also generally pass outside the estate and are not part of the corpus for commission purposes.
Income Commissions
In addition to the corpus commission, an executor may generally receive a commission of 6 percent on income the estate earns during administration, such as interest, dividends, and rent.
When There Is More Than One Executor
When two or more executors serve together, New Jersey law generally allows an additional commission based on the corpus for each additional executor, within statutory limits. The executors then share the total. A will may also set different compensation terms, which can override the statutory rates.
When Commissions Are Paid
Commissions are usually taken near the end of administration, often when the executor provides an accounting.
Beneficiaries may approve the commission informally, often through a release and refunding bond. If there is a dispute, the executor may file a formal accounting with the court, which can review and allow the commission.
Should a Family Executor Take a Commission?
- Commissions are taxable income to the executor.
- An executor who is also a beneficiary may receive the same value through an inheritance, which may be treated differently for tax purposes.
- Taking a commission can be fair when one sibling does far more work than the others.
- Waiving a commission can reduce family tension in some situations.
The decision depends on the size of the estate, the amount of work involved, the beneficiaries, and tax considerations.
Executor Duties That Justify the Commission
- Probating the will with the Surrogate’s Court
- Collecting and securing assets
- Paying debts, expenses, and taxes
- Handling inheritance tax filings and waivers
- Selling property when needed
- Keeping records and providing an accounting
- Distributing the estate to beneficiaries
Executors may also be reimbursed for reasonable out-of-pocket expenses, separate from commissions, such as filing fees, appraisals, and property upkeep.
Common Disputes Over Commissions
Disagreements often arise when one beneficiary believes the executor delayed the estate, made poor investment decisions, or took a commission before the work was finished.
Courts can reduce or deny commissions when an executor fails to perform duties properly or acts against the estate’s interests. Clear communication, regular updates to beneficiaries, and a well-documented accounting are the best ways to prevent these disputes.
When siblings serve together, or one sibling serves for the others, agreeing on compensation early in the administration can prevent resentment later.
Attorney Fees Are Separate
Commissions compensate the executor, not the estate’s attorney. Reasonable attorney fees for estate administration are generally paid from the estate as an expense.
Executors should keep careful records of their time and decisions, which helps if anyone questions the commission or the administration later.
Frequently Asked Questions
How much does an executor get paid in New Jersey?
Generally 5 percent of the first $200,000 of corpus, 3.5 percent up to $1,000,000, 2 percent above that, plus 6 percent of income.
Can a will change executor commissions?
Yes. A will can set different compensation terms for the executor.
Are executor commissions taxable?
Yes. Commissions are generally taxable income to the executor.
Can an executor waive the commission?
Yes. Many family executors waive commissions, often for tax or family reasons.
What if beneficiaries disagree with the commission?
The executor may file a formal accounting with the court, which reviews and decides on the commission.
Talk to Banks Law Firm
Banks Law Firm helps executors in Ridgewood, Upper Saddle River, and throughout Bergen County handle estate administration, commissions, and accountings.
When you call, attorney Patrick V. Banks’s office will ask about the estate, the will, and the beneficiaries, then explain your responsibilities and appropriate compensation. Visit Banks Law Firm to get started.
