Percentages

• New Jersey's executors' commissions are twofold. An executor is entitled to receive both a portion of the estate and a portion of any interest the estate earns during probate. The statutes award compensation of 6 percent for estates worth up to $200,000. This drops to 3.5 percent for estates valued up to $1 million, and to 2 percent for estates with over $1 million in assets. In addition, one of an executor's jobs is to place all cash and liquidated assets into bank or investment accounts pending probate. These funds will earn interest, and the executor is also entitled to 6 percent commission on this, over and above his commission for the value of the estate.
  
  

Exceptions

• If the deceased died leaving real estate and other tangible assets totaling $500,000 and a life insurance policy worth $500,000, the executor's commission is not based on $1 million unless the beneficiary of the insurance policy is the deceased's estate. If it passes to a named beneficiary, it bypasses probate. The commission on the value of the estate is based on probate assets, not anything that passes directly to a named beneficiary, as insurance policies, pensions and some retirement benefits sometimes do.
  
  

Extraordinary Circumstances

• Occasionally the probate of an estate is so problematical that it becomes the equivalent of two full-time jobs for the executor. Perhaps the heirs are bickering incessantly, and the executor must frequently act as referee or seek the intervention of the court. The estate might involve multiple real estate or other property appraisals, which must be organized, paid for and overseen. When this is the case, the executor has the right to petition the court for increased commissions or extra pay as compensation for the extra time and effort required.
  
  

Tax Consequences

• The executor's commission is tax-deductible to the deceased's estate and taxable earned income to the executor. If someone names you as executor of her will and you're also a beneficiary in the will, speak with a probate or tax attorney to figure out your best option. New Jersey does not tax inheritances. If you decline payment for your executor duties and that money reverts to your inheritance, you may be better off taking the money in this way, as a bequest. This would depend on the number of beneficiaries and your bequeathed portion of the estate.