Who gets paid what? Executor, Administrator, Trustee and Fiducairy Commissions in NJ

If you have ever been a fiduciary (executor, trustee, administrator, guardian, attorney-in-fact) you know that being a fiduciary becomes your new part time job.  There is a lot of work involved - finding assets, consolidating and investing assets, paying debts, maintaining property, distributing property, paying taxes.  On top of the actual work, you are dealing with attorneys, accountants, financial planners, the beneficiaries (who can easily be the most demanding of all) - oh, and your own grief and loss.

Unlike other things that you do for family, being a fiduciary is a job where you can get paid. New Jersey statutes provide pay scales for fiduciaries, all of which are subject to increase or decrease by court review.  Be aware however that any compensation you receive as a fiduciary must be included in your taxable income in the year that it is paid.  On the plus side, any commission paid to you is a tax deduction against any estate tax or income earned by the estate or trust..

I must give a shout out to my colleague, Don Vanerelli, Esq., who created an an excellent paper on "Computing Fiduciary Commissions / Compensation", which I just found and referred to in doing some trust commission research.  Don's paper is the inspiration and source of this post.

Executors and Administrators (NJSA 3B:18-12 through 3B:18-17):

Income (each year):

6% of income earned by the estate each year

Principal/Corpus (one time):

5% on the first $200,000;
3.5% on amounts between $200,000 and $1,000,000; and
2% on excess over $1,000,000.

If there are Co-Executors or Co-Administrators, an additional 1% of the Principal/Corpus may be taken as an additional commission.

If the estate is lengthy, an additional annual Principal/Corpus commission of 1/5 of 1% of the value of the Principal/Corpus may be taken.

Trustees, Guardians and Conservators (NJSA 3B:18-23 through 3B:18-27 ):

Income:

6% of income earned by the trust or assets under guardianship/conservatorship each year.

Principal/Corpus (each year):

$5.00 per thousand dollars of corpus on the first $400,000; and
$3.00 per thousand dollars of corpus in excess of $400,000.

There is an annual minimum of $100, and banks are entitled to "what is reasonable".

If there are Co-Trustees or Co-Guardians, an additional 1/5 commission is granted for the additional fiduciaries.

Termination of the Trust or Guardianship:

On the termination of the trust or guardianship or conservatorship, additional commissions may be taken:

If the corpus distribution occurs within 5 years of its receipt by the fiduciary, an amount equal to the annual corpus commission allowable but not actually taken, plus 2% of the corpus distributed;

If the corpus distribution occurs between 5 and 10 years of its receipt by the fiduciary, an amount equal to the annual corpus commission allowable but not actually taken, plus 1 1/2% of the corpus distributed;

If the corpus distribution occurs more than 10 years of its receipt by the fiduciary, an amount equal to the annual corpus commission allowable but not actually taken, plus 1% of the corpus distributed.

If there are Co-Trustees or Co-Guardians, an additional 1/5 termination commission is granted for the additional fiduciaries.

Agents under a Power of Attorney (NJSA 46:2B-8.12):

You need to apply to the court for compensation.

Image: David Castillo Dominici / FreeDigitalPhotos.net

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