Does the Executor of a Will Get Paid?

Does the Executor of a Will Get Paid?

Whilst the role of an executor is generally considered to be a gratuitous role, meaning, it is performed without the expectation of payment, there are several ways an executor may receive payment from a deceased estate.

The first is if the Will contains a professional charging clause allowing an executor who operates a profession to be paid for administering the estate at a rate equivalent to their professional fees.

The second is where an executor may apply to the Supreme Court of NSW for commission ‘for their pains and troubles as is just and reasonable’ in respect of the administration of the estate.

Lastly, if the executor is also a beneficiary of the Will, they will be entitled to the bequests set out therein.

It is important for a testator to consider what payment(s), if any, they want their executor to receive during the estate planning process.

The Role of an Executor of an Estate in Managing a Deceased Estate

The executor’s role is to call in the estate’s assets, pay the estate’s liabilities, resolve disputes and distribute the estate in accordance with the terms of the will, or in the case of partial intestacy, in accordance with the intestacy laws.

The executor must act in accordance with the terms of the deceased’s Will.

Executor Fees: How much does an executor get paid?

How much an executor gets paid depends on the terms of the Will.

Where an executor operates a profession and the will contains a professional charging clause, the executor will be entitled to charge the estate for any professional work performed during administration, at their professional rate.

Executor Is Also a Beneficiary: How Does This Affect Payment?

Where a person is both executor and beneficiary, they will usually be entitled to receive both the gift from the estate and charge the estate for their professional duties, unless prohibited under the terms of the Will.

Claiming Commission in NSW: Applying to the Court

An executor’s role can be complex and time-consuming.

Section 86 of the Probate and Administration Act 1898 (NSW) grants the Supreme Court power to allow executors a commission for the ‘pain and trouble as is just and reasonable’ arising from the administration of an estate.

There is no automatic right to commission. Executors are entitled to apply to the court for commission, and a court will consider each claim on its merits.

Procedure for Claiming Commission in NSW

Executors and administrators may claim executor’s commission by making an application to the court, and applications are determined by the Registrar.

The executor must pass accounts to be entitled to executor’s commission.

Where an executor or administrator is seeking commission, the information and evidence supporting the claim for commission should be set out in the supporting affidavit. This may include information regarding the steps taken in administering the estate, detailing any complications and difficulties encountered during the administration, and any other matters supporting the claim for commission.

As set out on the Supreme Court website, when determining whether to order commission, and what amount should be paid to the executor, the Registrar will consider factors including:

  • the size and complexity of the estate,
  • the complexity of the terms of the Will or scheme of distribution under the Will,
  • the degree of promptness, efficiency and diligence shown by the executor or administrator in completing tasks,
  • the number of routine and complex tasks to be undertaken to disburse the estate,
  • the amount of work carried out and time spent,
  • the amount of responsibility involved, which may be ongoing,
  • problems encountered in the course of administering the estate,
  • the number of executors or administrators sharing the load of managing the estate.

Further information on the process for applying for commission can be found on the Supreme Court website.

Approved Commission

The Registrar will determine whether commission should be paid and how much the executor receives.

In deciding whether the executor should be paid, the court applies such rates as it determines is reasonable to the components of the capital realisations, the income collections, and the value of the assets transferred in specie. There is no statutory scale to determine the rate of commission. The discretion to allow commission sits with the Court, and each case will be dealt with on its merits.

The Supreme Court website states that commission may be awarded as a lump sum or as percentage rate based on the value of the estate assets. The amount of the commission depends on the factors outlined above.

The following ranges of percentage for commission are a guide only as to what might be allowed:

  • between 0.25% to 1.25% of the value of the assets transferred in specie,
  • between 0.25% to 2.5% on the income on capital realisations, and
  • between 1% to 5% on income collections.

A larger estate does not necessarily justify a greater percentage of the estate, and indeed, in larger estates, the commission is usually allowed towards the middle or lower end of these rates, and sometimes lower.

Whatever the size of the estate, the Court will always consider the specific amount arrived at by applying a rate and determine the appropriateness of it for the ‘pains and troubles’ involved, and the effect the amount of commission will have on the remaining assets of the estate. The larger the estate, the less impact an order for commission is likely to have on interested beneficiaries of the estate.

Refused Commission

The probate Court may refuse an application for commission if the executor, administrator, or trustee neglects or omits without good reason to file and pass the estate accounts pursuant to the rules or an order of the Court.

Seek Help From Empower Wills and Estate Lawyers in Sydney

If you’ve been appointed executor and would like advice or assistance or require further information in relation to the process of applying for a grant of probate, administering the estate, or applying for commission against the assets of the estate, please contact Empower Wills and Estate Lawyers on 1300 414 844 for a free consultation. We can offer no win no fee or flat fees in select cases.

Liability limited by a scheme approved under Professional Standards Legislation. 

Disclaimer: the information in this article relates to NSW law as at the date it was written and is general information only. It does not constitute legal advice and should not be relied upon as legal advice. It may contain information or links to sources which are no longer current. If you have a question or legal issue, we recommend you contact a lawyer and obtain legal advice that takes into account your specific facts, circumstances, needs and objectives.

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