What if I have to make a court application to be awarded executor’s commission?
August 9, 2023
Executors’ commission is payment from the estate funds to the executor for their time, effort and trouble in administering an estate.
If the will does not provide for a commission to be paid to an executor and the interested beneficiaries of the estate do not agree to the payment of a commission and the executor wishes to pursue this claim for commission, then the executor must make an application to the Supreme Court of Queensland.
But what does the Court consider in such an application? The executor’s actions (or omissions!) are an important factor.
Executors’ commission is payment from the estate funds to the executor for their time, effort and trouble in administering an estate.
There are three ways that an executor can seek to have commission paid to them:
- the will of the deceased provides for a commission to be paid to the executor;
- the interested beneficiaries of the estate agree to the payment of a commission; or
- the executor applies to the Supreme Court of Queensland for an order that a commission be paid to the executor.
We have dealt with options 1 and 2 in Part 1 “Do I get paid to be an executor of a deceased estate?”
If the will does not provide for a commission to be to be paid to an executor and the interested beneficiaries of the estate do not agree to the payment of a commission and the executor wishes to pursue this claim for commission, then the executor must make an application to the Supreme Court of Queensland.
What will the Court consider when determining if you should be awarded executors’ commission?
In order for the court to award commission, it is necessary for detailed accounts to be prepared which identifies:
- what capital assets have been redeemed to the estate (the deceased’s interest in a business, real estate, shares in public and private companies, superannuation, life insurance policy proceeds, cash);
- what income has been earned by the estate during the administration of the estate (income earned from the deceased’ s business etc.); and
- the value of estate assets distributed.
An application to the Court must address the following matters:
- the basis on which an executor is seeking the payment of commission;
- the commission sought;
- the justification for the commission, for instance:
- the hours worked and the skill and ability displayed by the executor during the course of the administration of the estate, which should be evidenced by an itemisation of what work was undertaken and how long these tasks took and the return received by the estate based on the hours worked at each task;
- an inventory of the estate assets and liabilities; and
- the identification of any respondents to the application (the residuary beneficiaries of the estate).
The Court may also take into consideration:
- the promptness and efficiency of the executor in carrying out the administration of the estate (that is whether there has been any unwarranted time delay in the administration of the estate);
- any neglect by the executor in carrying out their duties;
- whether the executor will receive any benefit from the estate (i.e. is the executor a beneficiary under the deceased’s will?);
- the skilled assistance engaged by the executor and paid for out of the estate (i.e. has the executor engaged a professional such as solicitors, accountants, agents to sell estate assets etc. to assist in the administration of the estate);
- the complexity and volume of work conducted by the executor; and
- the size and complexity of the estate.
The award and the amount of the commission is at the discretion of the Court. Unless an executor has committed a breach of trust or been guilty of fraud or dishonesty in their duties, it is unlikely the Court will not award a commission.
When should an application for commission be made
Any application to the Court for commission is normally made when the administration of the estate has been substantially completed and when the overall asset and liability position and value of the estate can be recognised and the costs of taking the accounts will not be wasted.
If you are an executor and intend to the apply to the Court for executor’s commission, it is important to ensure that you comply with your duty to cost effectively and expeditiously administer the estate from the outset.
If you have questions about the administration of a deceased estate, please contact a member of our estate administration team.
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