As an executor of a deceased estate, you may be entitled to claim executor’s commission for the legal duties and responsibilities you undertake, as well as the “pains and troubles” you need to endure in administering the estate correctly.
In this article, we’re going to break down:
- What is an executor’s duties?
- What is an executor’s commission?
- How can an executor receive payment?
- What amount of commission is the executor entitled to?
- Important tips to make claiming a commission easier
Let’s get right to it.
What is An Executor’s Duties?
According to Section 52 of the Succession Act 1981 (QLD), an executor’s duties or obligations include:
- Administering the deceased’s real and personal estate in accordance with law;
- Provide a full inventory of the estate and render an account of their administration when required by the court;
- Deliver up the Grant of Probate or The Letters of Administration when required by the court;
- Distribute the estate, subject to administration of the estate, as soon as practical;
- Pay interest on any general legacies in the Will (8% per annum) for the periods specified in the section.
Outside of these obligations, an executor will also need to perform other duties which may include but are not limited to:
- Making funeral arrangements (if not otherwise made);
- Settling any of the estate’s debts;
- Locating the Will and advising the beneficiaries of their entitlements;
- Applying to the Supreme Court of Queensland for a Grant of Probate;
- Preparing financial statements;
- Transferring and/or selling assets.
As you can see, performing the duties of an executor requires a considerable amount of time and effort.
Many in this position seek to claim an executor’s commission.
What is An Executor’s Commission?
An executor’s commission is the compensation allocated to the executor for the tasks performed in the administration of the deceased’s estate.
How Can An Executor Receive Payment?
There are three ways in which an executor can expect to receive payment:
- The deceased’s Will stipulates or makes provision for commission to be set aside for the executor in the form of payment or asset allocation;
- The executor negotiates with the beneficiaries of the estate for the payment of commission;
- The executor applies to the Supreme Court of Queensland for an order to pay the commission.
What Amount of Commission is The Executor Entitled To?
The amount of commission is calculated based on the complexity of the duties performed, time spent administering the estate, the value of the estate and whether the duties were performed by the executor or delegated to professionals.
The maximum amount of commission allowed by a court is 6% of income derived and 5% on capital realised. Generally speaking, when an executor is successful in applying to the court for commission, the practice of the court has been to award commission of between 1.50%-3% on capital realised and 3%-5% on income.
The commission can only be paid upon unanimous agreement between the executor and the beneficiaries or through a court order.
The maximum commission is usually reserved for when administering an estate is particularly arduous and time intensive.
Important Tips To Make Claiming A Commission Easier
In order to stand a better chance of claiming an executor’s commission successfully or for reimbursement of expenses, it’s important for an executor to:
- Keep detailed records of work done and time spent to justify their commission;
- Undertake one’s duties efficiently and as transparently as possible;
- Use detailed records to negotiate a particular sum of commission with the beneficiaries to sign a release.
If, however, agreement can not be reached with the beneficiaries or all of the beneficiaries do not have legal capacity or are not over the age of 18 years, an application to the court will need to be made.
In this case, the estate will typically bear the expense of legal costs incurred by the executor in applying for executor’s commission.
How Can Queensland Probate Help You?
Administration of a deceased estate can be a complicated and time-consuming process, not to mention potential legal liabilities if mistakes occur.
Our Queensland lawyers are on hand to walk executor’s through the entire administration process and equip them with the necessary knowledge to help them claim their commissions.