Back in March of 2014, I wrote a lengthy post about how to Calculate an Executor’s Commissions in New Jersey. Frankly, most of the executors I work with don’t want a commission. However, I recently came across an interesting situation where an executor wanted a commission and the decedent had substantial joint survivorship accounts with the executor.Normally, a survivorship account is not subject to an executor’s commission on the theory that the executor doesn’t have to do any work with respect to those accounts. In this situation though, the survivorship accounts were actually convenience accounts. A convenience account is a type of account that goes to the surviving account holder, primarily to pay bills, but based upon the intent of those involved, the balance of the funds will be disposed of with the rest of the Decedent’s estate. In other words, the money does not legally belong to the surviving joint account holder, it belongs to the estate of the Decedent.
In my situation, even though the money passed to the executor, in his individual capacity, on the death of the decedent, the money will ultimately be processed through the estate’s accounts and go to the beneficiaries under the Decedent’s Will. Accordingly, the executor CAN take a commission on these joint accounts. More importantly, this commission is tax deductible for purposes of calculating the New Jersey estate tax.
I had trouble finding legal authority for this position, so I called up the New Jersey Division of Tax, Estate and Inheritance Department, and they confirmed this result.