Being an Executor of a deceased estate can be a time consuming and sometimes thankless task 

In recognition of this, whilst an Executor is normally expected to act gratuitously, they may be paid for their time and effort in administering the estate.

Am I entitled to Executor’s Commission?

Executors are entitled to be reimbursed for the reasonable expenses they incur in administering a deceased’s estate, but being paid Executor’s Commission depends on a number of issues.

Even if you are not a beneficiary and even if administering the estate is complex, you are not automatically entitled to payment from the estate merely because you are an Executor.

If you’re an Executor and also a beneficiary under a Will, it’s presumed that the gift left to you as beneficiary is your payment for being Executor. However, the Willmaker can also include a specific provision in their Will for a payment to be made to the Executor for their work in addition to the gift.

If there is no such specific provision in the Will, and there are special circumstances to overturn the presumption, the Executor may be entitled to Executor’s Commission, but to be entitled the Executor must make an application to the NSW Supreme Court under Section 86 of the Probate Administration Act 1898 (“the Act”). Section 86 allows commission to be paid to the Executor from the assets of the estate for their “pains and trouble as is just and reasonable”.

Remuneration clause in the Will

A Will-maker may specify an amount of an Executor’s remuneration. This may be either in the form of commission, a pecuniary gift in lieu of commission, or a percentage of the value of the estate.

An independent professional, such as a lawyer or accountant, may agree with a Will-maker to accept appointment as Executor provided they are paid their usual professional fees for their work. The remuneration clause in the Will would normally reflect this.

Making a Claim for Executor’s Commission

To claim Executor’s Commission, you must ordinarily lodge an application with the Supreme Court of NSW. Alternatively, if all the affected Estate beneficiaries are over 18 years of age and agree that the Executor should be paid an amount by way of commission, you need not seek the Court’s approval. The affected beneficiaries are usually those who are left the remainder of the Estate after the distribution of any specific gifts or bequests.

If the affected beneficiaries don’t all agree to provide their consent to the payment of Executor’s Commission, or can’t agree on the amount, the Court will determine your entitlement to commission. When you lodge an application for Executor’s Commission, you must also file with the Court the Estate Accounts. This is a breakdown of the Estate assets and liabilities detailing your management of the Estate, demonstrating that you dealt with the Estate in accordance with the terms of the Will.

The process of applying for commission usually takes some time, both for the Executor in preparing the relevant documentation and for the Court to consider the application. As this may delay the final distribution of the Estate, and the fact that the legal costs incurred in making the application for commission will be paid from the Estate and thus reduce the residual beneficiaries’ share, it is generally in all parties’ interests if payment of commission can be resolved without having to apply to the Court.

What does the Court consider?

The Court’s main consideration will be the “pain” and “trouble” you encountered in administering the Estate. The “pain” aspect refers to the responsibilities and worry of completing the tasks you undertook, while the “trouble” covers the work that you completed. The more complex the Estate and the more difficult it was to finalise it, the more likely the Court will consider your claim a valid one. Other matters that the Court will consider in respect to your application for commission include:

1. The size of the Estate;
2. Any other benefits you were gifted under the Will;
3. Whether you were prompt and efficient in administering the Estate;
4. The amount of work, responsibility and time spent carrying out the wishes of the Will;
5. Any problems you encounter in the course of administering the Estate;
6. Whether you had to deal with any litigation on the Estate, including a challenge to the Will; and
7. The rights of the beneficiaries and how much your commission may affect their share.

How much can an Executor receive?

There is no scale setting out how much commission an Executor can receive: each application is determined by the matters presented to the Court. However, as a general rule, 1% to 2% commission on the value of assets is usually granted. The test will ultimately be – what amount is just and reasonable after considering the “pain” and “trouble” you have encountered in the administration of the Estate.

Here to Help

Contact us for advice and assistance if you are an Executor considering seeking payment of Executor’s commission.