Losing a loved one is a difficult time for everyone. The person appointed in the Will as the Executor carries the additional burden of making sure that the estate is properly administered.
This person may be a family member, friend, or trusted professional of the deceased, such as an accountant or lawyer.
Entitlement to Commission
The executor or administrator of an estate is generally entitled to apply for commission, to compensate them for the time and effort involved in administering an estate (or for their “pains and trouble” as provided by section 86 of the Probate and Administration Act 1898.
Amount of Commission
The amount of commission is discretionary taking into account the complexities of the estate and while there is no fixed prescribed amount, information from the Supreme Court of NSW provides a guide as what might be allowed as:
- between 0.25% to 1.25% of the value of the asset transfers in their current form,
- between 0.25% to 2.5% on the income on capital realisations, and
- between 1% to 5% on income collections.
Applying for Commission
In the event that the executor wishes to seek commission, they may make an application to the Supreme Court, outlining the details of the size and complexity of the administration of the estate and the tasks undertaken by the executor, and applying for an Orders for commission and for the passing of the accounts relating to the estate.
Minimising Cost and Delay
An application to the Court for commission adds both time and expense for the estate, for the preparation of the documentation and for the Court to review the application provided.
To minimise otherwise unnecessary cost and delay in administering the estate, executors are encouraged to liaise with the beneficiaries
whose entitlements may be affected by the payment of the Commission from the estate.
Where these beneficiaries consent to the commission being paid, this may avoid the delay and expense of seeking the approval from the Court for a reasonable commission to be paid for the time, pain and trouble of the executor.
As such, it will generally be in the interest of both the executor or administrator and the beneficiaries if the issue of commission can be resolved without having to apply to the Court.
Other Factors
The general ability to claim commission may be impacted by the terms of the will, and it is important for anyone affected to obtain legal advice before seeking or agreeing to commission, or including any conditions for commission in their last will.
To seek advice in relation to commission, wills or estates contact Baker Love Lawyers.
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