Can an executor of an estate claim commission?

An executor is the person responsible for managing your assets and carrying out the directions you make in your will when you pass away.

The role can be stressful and time consuming and may involve a significant amount of work in executing the relevant duties. These include administration work, carrying out legal responsibilities and potential exposure to liability.

Sometimes, a clause is added to the Will to allow for a payment to the executor in recognition of the amount of work required. But, even if there is no direct benefit to the executor in the will, there are options available for payment of commission to the executor from the estate.

An executor acting on behalf of an estate is not automatically entitled to receive commission for their work during administration of the estate.

However, the Supreme Court may award executor’s commission, provided the executor has correctly performed their duties and they have submitted the relevant accounts and records.

Executors commission can be paid by either:

1. An application to the Supreme Court in accordance with Section 86 of the Probate and Administration Act NSW; or
2. By unanimous agreement between the executor and all residual beneficiaries. The beneficiaries must all be adults and have the capacity to enter into an agreement.

The process of applying for commission from the Supreme Court can be expensive and lengthy, which can lead to delays in the finalising the administration of the estate.  It is therefore preferable for the executor to reach an agreement with the beneficiaries in relation to the payment of commission.

There is no scale set by legislation which will form the basis upon which commission is calculated. If an application is made to the Court, commission may be calculated as a lump sum or as a percentage rate at the Court’s discretion.

The Court will generally consider a range between 0.5% and 5% of the total estate income and capital. It is more common for an amount between 1% and 3% to be awarded, but it will depend very much on the particular circumstances.

If there is more than one executor, the Court will consider the specific work undertaken by each executor and award commission accordingly. The amount awarded may then be shared between executors.

We have extensive experience in advising executors and beneficiaries in relation to deceased estates and can assist with negotiations for executor commission or applications to the Supreme Court. Contact our expert Wills and Estates team to discuss your circumstances.