Being Executor or Administrator of an Estate entails a significant amount of work. The executor has to probate the decedent's Will (Get themselves appointed as Executor), send a notice of probate to the next of kin and all beneficiaries named in the Will, sell the decedent's assets, open up an estate bank account, pay any outstanding debts of the decedent, file the appropriate tax returns, account to the court and the beneficiaries, and make distributions to the beneficiaries.
Fees an Executor is Entitled to
The Executor of an Estate is entitled to a commission on the assets received by the Executor and Income the Estate produces. The following are commissions the Executor is entitled to in New Jersey:
6% on all income the Estate produces (any income earned on the Estate’s assets after the Decedent’s death and before the Estate is distributed to the beneficiaries is income of the Estate);
5% of the first $200,000 of assets received by the Executor;
3.5% on the excess over $200,000 up to $1,000,000; and
2% on the excess over $1,000,000;
It is important to note that commission received by the Executor is taxable income. Many inheritances are not subject to tax depending on the size of the estate and relation of the beneficiary to the decedent. If the Executor is also a beneficiary they may want to consider the tax implications of taking a commission.
3B:18-14 Corpus commissions.
3B:18-14. Corpus commissions. Commissions on all corpus received by the fiduciary may be taken as follows:
5% on the first $200,000 of all corpus received by the fiduciary;
3.5% on the excess over $200,000 up to $1,000,000;
2% on the excess over $1,000,000; and
1% of all corpus for each additional fiduciary provided that no one fiduciary shall be entitled to any greater commission than that which would be allowed if there were but one fiduciary involved.
Such commissions may be reduced by the court having jurisdiction over the estate only upon application by a beneficiary adversely affected upon an affirmative showing that the services rendered were materially deficient or that the actual pains, trouble and risk of the fiduciary in settling the estate were substantially less than generally required for estates of comparable size.
Amended 1983, c.394, s.1; 2000, c.29, s.1.
3B:18-25. Fiduciaries may take annual commissions on corpus
3B:18-25. a. Fiduciaries may annually, without court allowance, take commissions on corpus (including accumulated income which has been invested by the fiduciary) in the amount of $5.00 per thousand dollars of corpus value on the first $400,000.00 of value of corpus and $3.00 per thousand dollars of the corpus value in excess of $400,000.00.
b. Notwithstanding the provisions of subsection a. of this section, if the fiduciary is a banking institution, foreign bank or savings and loan association authorized to exercise fiduciary powers, the fiduciary shall be entitled to such commissions as may be reasonable.
c. Notwithstanding the provisions of subsection a. of this section, a fiduciary may take a minimum commission of $100.00 annually.
d. The value of the corpus for the purpose of this section shall be the "presumptive value" as defined in N.J.S.3B:18-18 or, at the option of the fiduciary, the value at the end of the period.
e. Upon application of a person interested in the trust or guardianship, a court may review the reasonableness of the commissions of the fiduciary, provided, however, the fiduciary shall be entitled to receive at least the compensation provided for all fiduciaries as set forth in subsections a. and c. of this section.
Amended 1988, c.165; 1999, c.159, s.11.
3B:18-24. Income commissions
Commissions in the amount of 6% may be taken without court allowance on all income received by the fiduciary. For the purposes of this section, income which is withheld from payment to the fiduciary pursuant to any law of this State, or of the United States, or any other state, country or sovereignty or of any political subdivision or governmental unit of any of the foregoing, for income tax or other tax purposes, shall be deemed to be income received by the fiduciary, and shall be subject to income commissions as if actually received by the fiduciary.
L.1981, c. 405, s. 3B:18-24, eff. May 1, 1982.