As an executor, navigating the administration of a deceased loved one’s estate may appear daunting. Executorship imposes a myriad of responsibilities on an individual, with most being unaware of what the role entails, the duties involved, and whether they may be entitled to compensation for their time. The purpose of this article is to provide some guidance for an executor and to advise when they may be able to receive compensation.
What Does it Mean to be an Executor?
An executor is an individual who has been appointed by the deceased to administer their estate. The primary responsibility of an executor is to ensure that any taxes or debts owed by the deceased are finalised and that their assets are distributed according to their final will and testament. Other common duties include locating and safeguarding assets, the selling or renting of property, maintaining insurance of assets, and distributing the remaining assets to the beneficiaries named in the will. In larger estates, an executor may be required to apply to the Queensland Supreme Court for a Grant of Probate. A Grant of Probate is simply a recognition by the court that the executor has the authority to administer the estate. The appointed executor must act in the best interests of the estate and its beneficiaries, adhering to legal and ethical standards throughout the process.
Understanding Executor’s Commission
Executor’s commission refers to the compensation that an executor may be entitled to for their services in administering the estate. This commission serves as remuneration for the time and effort involved in carrying out the duties of executorship. In Queensland, the calculation of executor’s commission is not a one-size-fits-all approach. Instead, it is determined by various factors, including the size and complexity of the estate, the time and effort expended by the executor, and any assistance received from professional businesses during the administration period. An executor can only claim commission if they receive the consent of all the beneficiaries or by making an application to the Queensland Supreme Court.
Generally, when a court is determining the amount of executor’s commission to be applied it will be on the following basis.
- Between 1% to 4% on the capital assets of the deceased’s estate; and
- Between 2.5% to 5% on the income earned from the estate during the administration period.
However, it’s essential to note that these figures may vary based on individual circumstances and the facts of each case. Just because you have administered a difficult estate, it does not mean you are always entitled to compensation.
Case Examples from Queensland
To provide an insight into how courts have ruled on executor’s commission in the past, let’s examine a several cases.
In the Estate of Celestino Ghidella [2005] the court examined the nature of the activities performed by the executors, which included attending to funeral arrangements, organising bank accounts, instructing solicitors and accountants, and maintaining estate assets. It was noted that while the executors had some involvement in these matters, the day-to-day responsibilities, such as banking income and paying bills, were largely handled by the solicitors retained by the estate. Due to the involvement of professionals, the court denied the executors request of 5% on income and 3% on assets, and instead calculated the commission payable at 1.5% on income and 2% on assets.
NB This information is general in nature, if you have any questions regarding Wills, Estates or Executors, please reach out to our Wills and Estates team for advice specific to your circumstances.
