Legal Question in Wills and Trusts in New York

Re: Commission Questions

Good questions and I will try to answer all of them. Commissions are only charged on probate assets; i.e. those that come into the possession of the fiduciary. Thus, bank or brokerage accounts that may be part of the taxable estate, but pass by operation of law to a designated beneficiary (joint owner with survivorship rights, POD accounts, insurance or retirement benefits payable to a designated beneficiary) should not be subject to commissions. Nor should commissions be paid twice on an asset. Thus, if real property is included in the estate, only one commission is charged, even if it is sold. Commissions are charged on gross value, being the value calculated as of date of death, unreduced by any costs of eventual sale. Unless there was a trust set up under the Will, there are two commissions payable: Principal commissions on the gross value of the estate, plus income commissions on income received by the estate during its administration. Income is interest and dividends. Some fiduciaries also charge commissions on capital gains if assets of the estate are sold at a value higher than the originally estate value. Usually there are no commissions on distributed assets, unless they form part of a testimentary trust, which also allows an annual corpus (principal) commission annually. Loans into the estate are not considered commissionable assets. The salary issue depends upon how it is originally reported for estate tax purposes. If the salary is considered to be reported when accrued, commissions are charged on the anticipated amount, regardless of when received. A second commission should not be charged if receipt is deferred. Any additional questions can be sent to me directly. This is a response to an Internet question and the reply is not intended to be legal advice or as creating an attorney-client relationship.