The Court is empowered to order the payment of remuneration or commission to personal representatives for their services in an executor role.
It is entirely at the discretion of the Court if an award for commission is made, and if so, the amount of the award.
In forming a view of what an appropriate award of commission may be, the Court will generally consider the following factors:
- the size of the estate;
- the “pains and trouble” incurred by the executors in the administration of the estate. “Pains” relates to the responsibility and consequent anxiety and worry undertaken and “trouble” covers the work which is actually attended to by the executor;
- whether the executor was assisted by professional advisors;
- the care, skill and responsibility taken by the executor in undertaking the role;
- the time spent by the executor in performing the duties; and
- the success which attends the estate’s administration.
There is no statutory scale or flat rate which applies when making a determination of the amount of commission payable to an executor.
The general approach used by the Court is to consider what the personal representative has done (in reference to the above factors) and then to decide on a fair level of remuneration to be paid to the personal representative for the work undertaken. The Court will generally then award commission to the executor with the amount being expressed as a percentage of the estate’s overall assets (i.e. income and capital).
A very general guide to the amount the Court may award by way of commission is:
- 1.0% to 3% on capital (i.e. in assets of the deceased); and
- 3% to 5% on income (i.e. income earned on any assets of the deceased’s estate during the administration period).
In most cases, rather than the matter proceeding to Court, a private agreement is reached between the executor and interested beneficiaries (these are the beneficiaries whose entitlement will be affected by a payment of commission, usually the residuary beneficiaries).
This approach is commonly adopted as it is a more cost effective and timely way to deal with a claim for commission.
However, an agreement in respect of commission can only be reached where the interested beneficiaries all have capacity to agree (i.e. not under a legal disability such as infancy).
At de Groots wills and estate lawyers, we have a team of experienced professionals who are ready to assist you with all of your estate planning needs. Telephone us on (07) 3221 9744 or visit our website to get started online.
