Many people agree to serve as an Executor or Trustee because they believe it is simply a family responsibility or an honorary role. In reality, those positions can involve substantial legal duties, financial liability, time commitments, and compensation issues—especially in New York estates involving businesses, investment accounts, trusts, real estate holdings, or family disputes.

The situation becomes even more complex when the same person serves in multiple roles at the same time: Executor, Trustee, beneficiary, business manager, or attorney.

For professionals, executives, business owners, and high-net-worth families, understanding how these compensation structures work is important not only for estate planning, but also for preventing future disputes among beneficiaries and fiduciaries.

Executors and Trustees are Often Entitled to Statutory Compensation

Under New York law, Executors and Trustees are generally entitled to commissions for serving in those fiduciary roles.

An Executor administers the probate estate. That may involve:

• locating and safeguarding assets;
• handling business interests;
• coordinating tax filings;
• managing investments or real estate;
• resolving creditor claims;
• paying obligations; and
• distributing assets to beneficiaries.

Trustees perform similar functions, but usually over a longer period and the trust may arise before or after probate estate has already been settled.

Unlike many people assume, these commissions are not informal family payments. New York law contains statutory commission structures governing fiduciary compensation.

For Executors, Surrogate’s Court Procedure Act (“SCPA”) § 2307 provides a sliding statutory commission structure based largely upon the value of estate assets received and paid out during administration.

For Trustees, SCPA § 2309 provides a different compensation framework, including annual commissions and commissions on principal distributed from the trust.

In larger estates involving business interests, investment portfolios, multiple real estate holdings, or continuing family trusts, those commissions can become significant.

The “Pour-Over Will” Creates Additional Layers

Many sophisticated estate plans use a revocable living trust combined with what is commonly called a “pour-over will." In simple terms, the trust is intended to hold or receive assets, while the will directs probate assets into the trust after death.

That structure is often used for privacy, continuity of management, or long-term family planning purposes. However, it can also create multiple fiduciary roles operating at the same time.

For example:

• one person may serve as Executor of the probate estate;
• the same person or another individual may serve as Trustee of the revocable trust;
• the probate estate may transfer assets into the trust;
• the trust may then continue for years or decades after probate closes.

This creates an important practical reality: the Executor and Trustee may each be entitled to separate compensation for separate legal responsibilities.

That issue frequently surprises beneficiaries. A beneficiary may believe there is “only one estate,” while legally there may be both:

1. a probate estate with Executor commissions; and
2. an ongoing trust with Trustee commissions.

In larger estates, particularly where trusts hold businesses, rental properties, investment accounts, or multi-generational wealth, those compensation streams may overlap for years.

What Happens When the Same Person Serves as Executor and Trustee?

In many families, the same trusted individual is named to both positions. That is common and often entirely appropriate. The individual may already understand the family finances, business operations, or long-term wishes of the creator of the estate plan.

However, when one person serves in multiple fiduciary roles, questions often arise concerning whether the person is receiving compensation twice – double dipping. The answer depends upon the nature of the work being performed and the governing instruments involved.

The law generally recognizes that serving as Executor and serving as Trustee are legally distinct responsibilities.

An Executor’s role primarily concerns estate administration and probate matters.

A Trustee’s role concerns trust administration, ongoing management, investment oversight, distributions, accounting obligations, and fiduciary duties to beneficiaries over time.

Accordingly, in appropriate circumstances, the same individual may receive Executor commissions and Trustee commissions because the person is performing separate legal functions.

That said, disputes frequently arise when beneficiaries believe:

• the work is duplicative;
• the fiduciary delegated too much work to professionals;
• the compensation is excessive;
• the estate plan was structured primarily to generate fees; or
• fiduciary decisions favored compensation over beneficiary interests.

Those disputes become even more sensitive when substantial assets or family businesses are involved.

The Issues Become More Complicated When the Fiduciary is Also an Attorney

Some of the most heavily litigated compensation disputes arise when the Executor or Trustee is also an attorney.

New York law permits attorneys to serve as fiduciaries. It also permits attorneys, in appropriate circumstances, to receive legal fees in addition to fiduciary commissions.

However, New York law imposes important safeguards. Under SCPA § 2307-a, when an attorney drafts a will and is also named as Executor (or arranges for an affiliated attorney or employee to serve as one), the testator must receive specific written disclosures.

Those disclosures are intended to ensure the individual signing the will understands:

• the Executor may receive statutory commissions;
• the attorney may also receive legal fees;
• another person could be selected instead; and
• the combined compensation could be substantial.

If those statutory notice requirements are not properly followed, the attorney-fiduciary may face limitations on compensation, including a reduction of Executor commissions.

This issue is particularly important in sophisticated estates because legal fees and fiduciary commissions can overlap in ways beneficiaries may not initially understand. For example, an attorney serving as Executor may:

• receive Executor commissions;
• charge legal fees for legal services;
• oversee trust administration;
• coordinate business succession matters;
• supervise litigation involving the estate or trust; and
• manage disputes among beneficiaries or business owners.

In estates involving operating companies, partnerships, commercial real estate, executive compensation, or complex tax planning, the line between fiduciary work and legal work can become highly disputed.

Why These Issues Often Lead to Litigation

Many fiduciary disputes do not begin because someone believes compensation is legally prohibited. They begin because beneficiaries believe:

• they were not informed;
• conflicts existed;
• compensation lacked transparency;
• roles were blurred; or
• fiduciaries prioritized fees over family interests.

In high-net-worth estates, those disputes may involve:

• family businesses;
• investment entities;
• trusts continuing for multiple generations;
• blended families;
• second marriages;
• executive-compensation structures;
• closely held companies; or
• disputes among siblings serving together as co-fiduciaries.

The financial stakes can become substantial.

Even well-intentioned fiduciaries can face claims involving:

• excessive commissions;
• breach of fiduciary duty;
• self-dealing;
• conflicts of interest;
• failure to disclose;
• improper delegation; or
• improper legal fee requests.

Careful Planning and Early Advice Matter

For business owners, professionals, executives, and families with substantial assets, fiduciary compensation should not be treated as a minor administrative issue. The structure of the estate plan itself may determine:

• whether multiple commissions exist;
• whether trusts continue long term;
• whether compensation overlaps;
• whether attorney-fiduciary disclosures are required; and
• whether future beneficiaries are likely to challenge the arrangement.

Likewise, individuals asked to serve as Executors or Trustees should understand the scope of their duties and the potential scrutiny that accompanies those roles. Careful planning, proper disclosures, and transparent administration can often prevent disputes before they begin.

When disputes do arise, early strategic advice may significantly affect the outcome for fiduciaries, beneficiaries, and family businesses alike.

With offices in Albany, Buffalo, Rochester, and New York City, we can help you across New York State. 

You may learn more about us and how we operate by visiting these pages: About Us and What Sets Us Apart.   

To learn more about these topics, check out our other related blog posts and our Legalities & Realities® Podcast:    

• Blog posts:  
  • When Business and Family Collide: Legal Problems That Arise in Closely Held Family-Owned Companies
  • When Disputes Escalate: Why Procedure-Not Personality-Drives Outcomes in New York Litigation
  • Spoliation of Evidence: How Good Cases Go Bad–and Who Pays the Price
  • Trust Protectors in New York: Power, Oversight, and Litigation Risk in High-Value Trusts
  • Enforcing Judgments in New York: What You Can Do, What You Cannot Do, and How It Actually Works

This blog post is for informational purposes only and does not constitute legal advice. For specific legal counsel, please contact our office directly.