A New Jersey estate executor typically gets paid two fees or commissions — a corpus commission and an income commission.
New Jersey Executor Corpus Commission
The New Jersey corpus commission for the executor is based off of the assets received by the executor to administer.
The executor is entitled to charge a fee that is a percentage of the estate. The percentages are set forth in N.J.Rev. Stat. § 3B:18-14. Commissions on all corpus received by the fiduciary may be taken as follows:
Excess over $1,000,000
A New Jersey executor may also annually take one-fifth of 1% of the value of the corpus as an additional commission. N.J. Rev. Stat. § 3B:18-17.
Examples of New Jersey Corpus Commission
If the estate corpus was $1,000,000, the New Jersey executor would be entitled to a $38,000 commission. (200,000 x .05) + (800,000 x .035) = $38,000.
If the estate corpus was $5,000,000, the New Jersey executor would be entitled to a $ 118,000 commission. (200,000 x .05) + (800,000 x .035) + (4,000,000 x .02) = $118,000.
New Jersey Executor Income Commission
The New Jersey executor income commission is earned on the income that is generated by the estate. Section 3B:18-13 governs income commissions in New Jersey probate and states:
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 a fiduciary or fiduciaries 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, requiring the withholding 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 provided in this section in the same manner as if actually received by the fiduciary.
Therefore, if a New Jersey estate earns $25,000 of income from stocks held in an investment account, the executor would be entitled to a commission of 6% of the income amount — $1,500.
Can Executor Fees Be Reduced In New Jersey?
Yes, a New Jersey executor corpus commission can be reduced. Corpus commissions can be reduced by the court upon application by an adversely affected beneficiary. The beneficiary must make a showing that the services rendered by the New Jersey executor 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. N.J.Rev. Stat. § 3B:18-14.
Can New Jersey Executor Fees Be Increased?
Yes. The court may allow a greater corpus commission than provided in the percentage schedule on a showing that unusual or extraordinary services have been rendered by the executor fiduciary for which the fiduciary should receive extra compensation. N.J. Rev. Stat. § 3B:18-16.
Extraordinary services commonly include overseeing the sale or lease of real estate, participating in litigation on behalf of the estate, handling tax issues, or continuing a business.
What Commissions Do Multiple Executors Receive In New Jersey?
If there is more than one executor of a New Jersey estate, then the total compensation is increased by 1% of the gross value of the estate for each executor.
When the compensation amount is divided among the executors, no executor is permitted to receive more than the amount that a single executor would be due. N.J.Rev. Stat. § 3B:18-14.
A New Jersey probate lawyer will routinely calculate the commission due to an estate executor.