Quick Answer
Executor compensation, repayment of personal expenses, and an inheritance are three separate entries. Before taking a commission, identify the applicable will terms, the assets included in the calculation, prior payments and any objections.
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Key Facts
- Understand the commission schedule
- A simple arithmetic example
- Build a calculation that beneficiaries can follow
- Discuss payment and tax treatment before withdrawing
Executor pathway: Start with the New Jersey Executor Issues Resource Center, then use this focused guide.
Understand the commission schedule
The ordinary statutory corpus schedule is 5% of the first $200,000, 3.5% of the next $800,000, and 2% above $1 million. Separate income commissions and adjustments for additional fiduciaries may apply. The will and circumstances can change the analysis. See this New Jersey estate attorney’s explanation of N.J.S.A. 3B:18-13 and 3B:18-14.
Do not multiply the home’s asking price by one percentage and call the result final. Ask counsel to confirm which assets were received by the fiduciary and how the real estate is treated.
A simple arithmetic example
Illustration only: if counsel confirms $400,000 of commissionable corpus for one executor under the ordinary schedule, the arithmetic is $10,000 on the first $200,000 plus $7,000 on the next $200,000, totaling $17,000. This example excludes income commissions, other adjustments, expenses and taxes. It does not establish the commissionable value of your estate.
Build a calculation that beneficiaries can follow
- List each included asset, the value used and the supporting statement or valuation.
- Show excluded assets separately so the family can see they were considered.
- Keep estate income separate from principal and record prior commission withdrawals.
- List reimbursable invoices separately from compensation for service.
- Explain who prepared the calculation and how any disputed item will be resolved.
If the house is the main asset and the estate has little cash, record a proposed commission in the projected settlement and estate budget. Do not assume sale proceeds are all available for immediate payment to the executor or heirs.
Discuss payment and tax treatment before withdrawing
The IRS treats executor fees as income. Publication 559 explains federal reporting considerations. A beneficiary who also serves should ask a tax professional about the difference between a commission and an inheritance before electing a payment.
A clear written explanation before a withdrawal is easier for relatives to review than an unexplained transfer afterward. For an objection, preserve the calculation, supporting values and records of services; ask estate counsel how approval or review should occur.
Frequently asked questions
Is reimbursement included in my commission?
Keep the two separate. A documented expense advance is a different claim from compensation for serving as executor.
Do I calculate the commission from the money left after closing?
Do not assume net sale proceeds are the correct base. Have counsel identify commissionable corpus and treatment of the property.
Can I decline a commission?
You can discuss waiving compensation with counsel and your tax adviser. Document the decision and distinguish it from waiving repayment of expenses.
Choose your next question
General information for organizing a property decision. Estate, tax, title and tenancy requirements depend on the facts; use the appropriate licensed professional for advice about your situation.