Being appointed the Executor of an Estate is a great responsibility not all are given. But with great responsibility, comes the prospect of money-making…or does it?
The Role and Responsibilities of the Executor
The role and particular responsibilities of an Executor in administering an Estate includes:
- Arrange and pay the funeral expenses;
- Identify the Estate assets and recover any money owed to the Estate;
- Identify, minimize and pay the debts of the Estate;
- Notify all government bodies;
- Protect the assets of the Estate. This includes keeping the properties insured at all times.
- Obtain a Grant of Probate from the Supreme Court;
- Distribute the Estate in line with the Will to all listed beneficiaries;
- Where assets are held on trust for the benefit of a minor or otherwise, to invest those assets wisely;
- To keep a proper record of the accounts of the Estate.
With so many key responsibilities, is there a reward other than closure? Is payment possible?
Can an Executor ever be paid for their work?
Under the Probate & Administration Act 1898 (NSW) an Executor is generally entitled to commission for the work they have undertaken in administering the Estate, provided they have of course, done the right thing by the Estate.
What if I am already a beneficiary under the Will?
If you are already a beneficiary under the Will, this does not mean you cannot make a claim for commission. However, the Court will look at how much you have been left as a beneficiary and will adjust any commission accordingly.
How do I make a claim for commission?
To claim commission, generally an application must be made to the Supreme Court. With an application, you must file the Estate accounts with the Court. This means you must present a breakdown of the Estate assets and liabilities, detailing how you managed the Estate and essentially proving that you dealt with the Estate in line with the Will.
Commission may be given if all residual beneficiaries, that is, beneficiaries who are left the remainder of the Estate, are all over the age of 18 and give consent to commission being paid. All residual beneficiaries must unanimously agree to your payment.
If I apply to the Supreme Court, what will they consider?
The main consideration of the Court will be the “pain” and “trouble” you encounter in administering the Estate. The “pain” aspect refers to the responsibilities and worry of completing the task, while the “trouble” covers the work concluded. The more complex the Estate and the more difficult to finalize, the more likely the Court will consider your claim a valid one.
Other considerations include:
- Whether you had to deal with any litigation on the Estate, including a challenge on the Will;
- Any other benefits you were gifted under the Will;
- A failure to keep proper accounts and records of the Estate expenses and distribution;
- The size of the Estate;
- The rights of the beneficiaries and how much your commission may affect their share;
- Whether you were prompt and efficient in administering the Estate;
- The amount of work, responsibility and and time spent carrying out the wishes of the Will;
- Any problems you encounter in the course of administering the Estate.
How much can i receive?
There is no scale set by law as to how much it is possible to receive. As a general rule, a 1% to 2% commission on the value of assets has been granted. In the case where the Estate is worth a million dollars, then the commission may be $10,000.00 to $20,000.00.
The test will ultimately be: What is just and reasonable to give to you after considering the “pain” and “trouble” you have encountered in the administration of the Estate.
In a recent case where the Estate was worth approximately $8.4 million, the Court found that the $20,000.00 first granted was not enough. Given the size of the Estate and that there was a challenge on the Estate, the Executor was entitled to much more for his pain and trouble.
In conclusion, an Executor will generally be entitled to receive commission. How much will ultimately depend on the weighing up of what is just and reasonable in comparison to the pain and trouble encountered in administering the Estate.
For more information on how you can claim commission for your role as Executor, please contact our leading Estates expert, Krystle Wolthers on (02) 4626 5077 or email@example.com today.
The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.