Executor’s Commission

Can an executor be paid for their role administering a Will?

An executor may seek payment (such as executor’s commission) for their troubles in administering an estate.

There a number of ways the payment may occur, including:

• The will-maker leaves a provision in the will specifying payment.
• The will-maker leaves assets to the executor and specifies it is intended as payment.
• The executor applies for payment of commission based on the nature of the estate they are administering.

What is an executor’s commission?

The executor’s commission is a payment approved by the court or all the affected beneficiaries to the executor as payment for their troubles and effort in administering an estate.

How is the executor’s commission calculated?

There is no fixed scale or fee for what an executor may be charged or might be entitled to charge.

The commission is generally determined having regard to the professionalism with which the executor has completed the role, the relative difficulty of the role, the size of the estate and the tasks that the executor was required to perform.

It is important to note that an executor’s commission cannot be levied without an order of the court or unanimous agreement of the affected beneficiaries.

As a general guide (though not necessarily the strict rule), the maximum commission previously granted by a court will be 6% on income derived and 5% on capital realised.

The maximums are generally reserved for very complicated, long duration or time-consuming estates. Executors should keep records of work done in their executorial role to justify commission.

What duties might an executor carry out?

The executor of an estate is entitled to be paid for their time and effort in carrying out the administration of the estate.

There a number of ways the payment may occur, including:

• The will-maker leaves a provision in the will specifying payment.
• The will-maker leaves assets to the executor and specifies it is intended as payment.
• The executor applies for payment of commission based on the nature of the estate they are administering.

A will may provide for a specific amount or a specified gift to be received by an executor in consideration of their services. It may state a rate of payment in terms of a percentage of the total assets and/or income of the estate.

Reimbursement of expenses

An executor is entitled to be reimbursed by the estate for all appropriate expenses incurred. However, if expenses are not deemed appropriate, the executor’s commission may be reduced in line with the expenses. In some cases, the commission may be revoked altogether.

Generally agreement with beneficiaries can be reached if the executor provides particulars of the effort expended and risk/responsibility taken in connection with the performance of each task which was required to be performed in relation to the estate.

Simply request each beneficiary to sign a release as to the appropriate performance of all responsibilities; an acquittal of all responsibility; and authorisation for a particular sum for commission.

The payment from the estate can then be made before the final distribution to each executor.

If agreement can’t be reached, an application to the court can be made. The estate generally bears the expense of the executor’s legal costs for the application.