Detailed Answer
Under New Jersey law, a personal representative (formerly called an executor or administrator) may receive a statutory commission on estate assets and sale proceeds. These commissions compensate the personal representative for managing estate affairs, including collecting assets, paying debts, and distributing property to beneficiaries.
Commission rates and procedures are set by statute. Key provisions appear in N.J.S.A. 3B:18-11 through 3B:18-18 (N.J. Stat. § 3B:18).
Statutory Commission Schedule for Personal Property
- 2.5% of the first $200,000 of personal property
- 2% of the next $800,000
- 1.5% of the next $9,000,000
- 1% of the next $15,000,000
- 0.5% of any excess value over $25,000,000
These percentages apply to the total value of cash, securities, bank accounts, business interests, and tangible personal property before distribution.
Commission on Real Estate Sales
For the sale of estate real property, a personal representative may receive a commission of up to 6% of the gross sale price. Courts often approve this rate unless beneficiaries request a lower fee or the court determines a different amount is fair. See N.J.S.A. 3B:18-12 (N.J. Stat. § 3B:18-12).
Additional or Extraordinary Compensation
If a personal representative performs services beyond routine duties—such as complex litigation, tax controversies, or managing an ongoing business—the court may award extra compensation. A petition for extraordinary fees must demonstrate the nature, extent, and value of these services. See N.J.S.A. 3B:18-14 (N.J. Stat. § 3B:18-14).
Personal representatives must file an accounting and request approval of fees in the probate court. Courts will review whether the statutory commissions are fair and may adjust them for undue delay, poor administration, or conflicts of interest.
Helpful Hints
- Keep detailed records of all estate transactions and hours spent on extraordinary tasks.
- Prepare and file an inventory of estate assets promptly under N.J.S.A. 3B:19-11.
- Discuss fees with beneficiaries early to reduce disputes at accounting.
- File a petition for court approval of commissions and any additional compensation.
- Consult a probate attorney for guidance on complex estates or if contentious issues arise.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a licensed attorney in New Jersey to address your specific situation.