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Do I get paid to be an executor of a deceased estate?

July 26, 2023

Claims for the payment of executor’s commission

If you have undertaken the role of executor of a deceased estate you may be entitled to claim executor’s commission if you have spent considerable time and effort in administering the estate.

Executor’s commission is remuneration paid to an executor in exchange for their time and trouble in administering the estate.

Unless the estate is particularly complex, a family member who undertakes the role of executor would not normally claim an executor’s commission unless they have spent an extraordinary amount of time and effort and incurred personal expense, outside of that normally required, in administering the estate. This is particularly the case where the executor is also a beneficiary of the deceased’s estate.

An executor who is considering claiming a commission must keep detailed records of work done, time spent and expenses (eg fuel, travel, accommodation costs) incurred specifically in their role as executor of the estate.

An application for commission is normally made when the administration of the estate has been largely completed and the executor is in a position to provide an accounting to the interested beneficiaries of the work undertaken and to be undertaken to finalise the estate.

The 3 ways an executor can receive a commission is:

  1. the will of the deceased provides for a commission to be paid to the executor;
  2. the interested beneficiaries of the estate agree to the payment of a commission; or
  3. the executor applies to the Supreme Court in the relevant jurisdiction for an order that a commission be paid to the executor.

Will provides for the payment of a commission

Where the will of the deceased provides for payment of a commission, the commission is paid to the executor prior to a final distribution of the residuary estate.

If a gift to the executor states that the gift is instead of commission or remuneration to the executor, if they accept the appointment as executor, they are then normally not entitled to any more than what the will provides.

However, there may be exceptions such as if the gift to the executor is insignificant compared to the time expended and the expenses incurred by the executor in the administration of the estate.

Agreement by the beneficiaries

An executor must be careful not to be seen as preferring their own interest over that of the other beneficiaries.  Further an executor may not request payment of a commission as a pre-condition to the beneficiaries receiving their entitlement in the estate.

The commission is paid from the residuary estate prior to a final distribution of the estate funds. Therefore, the interested beneficiaries are those entitled to the residuary estate or that part of the estate from which the commission is to be paid.

It is important that the interested beneficiaries are provided with adequate information in order to give an informed consent to the payment of the commission.

If the will does not provide for a commission to be paid and agreement cannot be reached with all the interested beneficiaries, it will be necessary for the executor to apply to the Court for an order that commission be paid.  The costs of an application are considered a testamentary cost to be borne by the estate.

An application to the Court may be time consuming and costly to the estate.  The practical approach, prior to any court application, is for the executor to request the interested beneficiaries of the estate to negotiate and enter into a private agreement regarding the commission.

If you have questions about the administration of a deceased estate, please contact a member of our estate administration team.

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