What is Executor’s Commission & When can it be Claimed?

Under Queensland legislation the Court may authorise the payment of commission to an Executor.

The Court decides on the amount to be awarded based on “the pains and trouble” incurred by the Executor in the administration of the estate. “Pains” recognises the responsibility and anxiety to which an Executor is put in the administration. “Trouble” is used to assess the work which is actually attended to by the Executor.

Some of the matters which are taken into consideration by the Court when looking at the amount of commission which is appropriate include:

1. The size of the estate;
2. The care and responsibilities involved;
3. The time occupied in performing the duties;
4. The skill and responsibility displayed by the Executor; and
5. Whether the administration of the estate has been successful.

Although the Court’s approach is to form an overall assessment of what remuneration is just and reasonable in all the circumstances, the application of a percentage is then helpful in forming a view as to the amount to award. Generally, commission is assessed in terms of a percentage of the capital and income of the estate. Given the level of discretion involved, the reported cases show quite a range of percentages depending on the circumstances of each matter. However, as a rule of thumb, commission on capital of 2% and on income of 3% is appropriate in many cases.

In our experience Court applications claiming an Executor’s commission are rare. It is more usual for one of the following options to be adopted:

1. An Executor may agree not to be paid for their work. This is common where a family member is acting as Executor, particularly where they are also a beneficiary under the Will.
2. The will maker could leave a gift to the Executor under the Will. If an Executor is left a gift under the Will, this does not prevent the Executor from bringing a claim for commission. However, if the gift is worded so as to be “in lieu of commission”, the Executor generally will not be entitled to claim anything more than that gift. Care should be taken to ensure that the gift is adequate compensation as the appointed Executor could renounce their position or disclaim the benefit and apply for commission if the gift was not considered adequate.
3. Strictly, for an Executor to be able to claim commission from the estate, the payment must be authorised by the Court. However, if all residuary beneficiaries (those entitled to the balance of the estate) are over 18 and able to consent, payment could be authorised by their unanimous approval. Given the substantial costs of making an application to the Court, it is in the interests of all parties to try and work out an agreement as to an appropriate level of commission to be paid to the Executor.
4. Where a will maker proposes to appoint a solicitor as their Executor, consideration should be given to the fees and commission the Executor is entitled to claim. The solicitor is entitled to charge their usual professional fees for the work done by him or her or the firm of which they are a member. It is common practice for the Will to include a charging clause making it clear to the will maker that the Solicitor has the right to charge professional fees for acting in the role. The solicitor is also entitled to bring a claim for commission, although the professional fees paid would be taken into account.

If none of the above options are appropriate in the circumstances, an Executor is entitled to apply to the Court for the payment of commission and it will generally be allowed, with the commission and associated costs of the application to be paid from estate funds. This possibility and the above options should be carefully considered at the time of making a Will.