Being an executor of a deceased estate can be a time consuming and sometimes thankless task. 

In recognition of this, whilst an executor is normally expected to act gratuitously, the law provides for certain circumstances in which an executor may be remunerated for their time and effort in administering the estate. This is referred to as executor’s commission.

Executor’s commission – am I entitled to it?

While the process of administering an estate can be complex, merely acting as an executor does not automatically entitle you to any payment from the estate. This is the case even if you are not a beneficiary of the estate.

An executor can receive commission in any of the following situations:

1. Where the Will specifically authorises payment to the executor;
2. Where the beneficiaries agree; or
3. The Supreme Court orders that commission should be paid.

Unless the estate is particularly complex, it would be unusual for an executor who is also a beneficiary to receive payment, as the benefit they stand to receive under the Will is usually considered to be sufficient reward.    

Remuneration clause in the Will

A Will-maker may specify an amount of remuneration to be paid to an executor in their Will. This may be either in the form of commission, a percentage, calculated with reference to the value of the estate, or a pecuniary gift in lieu of commission.

An independent professional, such as a lawyer or accountant, may commonly agree with a Will-maker that they would accept appointment as executor on the understanding that they would be paid their usual professional fees for all work completed by them. The remuneration clause in the Will would then normally reflect this.

Wills made on or after 1 November 2017

A remuneration clause in a Will made on or after 1 November 2017 will only be valid if the Will-maker has provided their written informed consent to the inclusion of the clause before making the Will. If such consent cannot be established, the executor may not rely on the remuneration clause.

Consent of Interested Beneficiaries 

If the Will is silent as to executor’s remuneration, or a remuneration clause is ineffective as the Will-maker did not provide their prior consent (or it does not set out the amount and type of remuneration to be paid), an executor (other than a professional trustee company) may still receive payment for acting if they have the informed consent of all interested beneficiaries.

An interested beneficiary is a beneficiary whose entitlement would be directly affected if commission were to be allowed to the executor. To be able to consent to commission being paid to an executor, the beneficiary must be at least 18 years of age, and not under a disability that impairs their ability to provide consent. 

Section 65D of the Administration and Probate Act 1958 (the Act) outlines the information that an executor seeking to be paid must provide to beneficiaries for their consideration. This includes the basis on which the executor seeks payment, the method of calculation of payment (such as a percentage or fixed amount), the estimated value of the payment, and the beneficiaries’ right to have the payment reviewed by the Court. 

An executor who fails to provide this information to the relevant beneficiaries is not entitled to receive payment. A beneficiary is also entitled to obtain independent legal advice before deciding to enter into any agreement with an executor in respect of commission.

In order for the beneficiaries to properly assess the request, and understand exactly what the executor has had to do during the administration of the estate, the request should not be made until the estate administration has been completed or nearly completed.

If any affected beneficiary cannot or does not provide informed consent, an executor cannot rely on the consent of the other beneficiaries to claim commission, even if all other beneficiaries of the estate are amenable. 

On application to the Court

An application to the Court should only be made where there is no effective remuneration clause in the Will, and where the interested beneficiaries have either not provided their informed consent to a request from the executor, or are unable to do so.

Pursuant to s 65 of the Act, the Court may award such commission or percentage of the estate that the Court thinks is reasonable for the executor’s “pains” and “troubles. “Pains” generally refers to responsibility, anxiety and worry. “Troubles” generally refers to the work carried out by the executor to administer the estate.

While the Court may theoretically award up to 5% of the value of the estate, in practice, the range is generally between 1% and 3.5%. It is unusual for the Court to award more than 3.5%.

In support of an application, an executor must be able to provide detailed records outlining all work done by the executor personally and the time taken by them dealing with the estate. For this reason, an application should again only be made towards the end of the estate administration process. Relevant factors the Court will generally take into account include:

• the time that the executor was required to spend personally on the administration;
• the nature and amount of work completed by the executor personally, and whether this has benefited the estate;
• the complexity and size of the estate;
• whether the estate has been involved in any dispute or litigation; and
• the extent to which an executor has engaged professional assistance with the administration, to minimise the executor’s own “pains and troubles”.

Reimbursement & payment of estate expenses

Separate to commission, an executor is entitled to be reimbursed for all debts and expenses incurred by them in the administration of the estate. 

An executor may also engage tradespeople and other professionals to assist throughout the administration process where appropriate, and pay their reasonable fees out of the estate. However, an executor cannot then claim commission on work which has been delegated to other persons.

How we can help

Executor commission is not an automatic right, and an executor should consider obtaining legal advice before making a claim for commission.

The Deceased Estates team at Moores would be pleased to assist you with any queries you may have about seeking or responding to a request for executor’s commission.

Contact us

Please contact us for more detailed and tailored help.

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Disclaimer: This article provides general information only and is not intended to constitute legal advice. You should seek legal advice regarding the application of the law to you or your organisation.

Accepting a role as a legal personal representative of an estate (ie an executor or administrator, ‘LPR’) can be a daunting task, particularly given the risk of personal liability that goes with it. 

A key starting point to navigating the role as LPR is being aware of the timeframes which apply when administering a deceased estate.

Many of the key timeframes are outlined here, and include the following:

Notice of intention – 14 days before application for grant of representation

Before an LPR can make application for a grant of representation, they must advertise their notice of intention to do so, on the Supreme Court website¹.

Where there is a valid will, this notice must include the LPR’s name and address, the date of the will to be probated and the names of the persons identified as executors in the Will.

This allows third parties a period in which to object to a grant of representation, which (in the context of a grant of probate) is typically done when somebody believes that the Will is not valid or there is a more recent Will.  

Once the 14-day period has lapsed, the LPR can file their application for a grant of representation.

In urgent matters (for instance, where a grant of representation is required to settle real estate), an LPR can be appointed without having to advertise a notice of intention, but this requires an application to the Supreme Court. 

Executor’s year – 12 months from date of death

The ‘executor’s year’ refers to the period of time that an LPR is afforded to administer an estate, without being compelled to make any distributions to beneficiaries. The principle is grounded in case law and legislation².

However, an LPR should be aware that the principle does not mean:

1. the administration must be complete after 12 months. Whilst 12 months is often a sufficient period in which to administer a straightforward estate, there are many reasons why an estate may take longer to finalise (including disputes or complexity).
2. no distributions can occur within 12 months. There is often good reason to distribute an estate within 12 months from the date of death, particularly where the limitation period for a family provision claim has expired.   

Ultimately, the LPR must always ensure that they are acting promptly in the ‘due administration’ of the estate, regardless of the time period since death. 

Limitation period for family provision claims – 6 months from the grant of representation

In Victoria, an eligible person may claim further provision from an estate in circumstances where they believe that they have not been left adequate provision for their proper maintenance and support.

This claim must be made within 6 months of the grant of representation.

For this reason, LPR’s are advised not to distribute an estate within this period of time. If they do, and a successful claim is made, the LPR may be held liable if insufficient assets in the estate remain to meet the claim. 

A family provision claim can also be made outside the 6 month limitation period in certain circumstances but only where assets in the estate remain at that time. It is therefore prudent for an LPR, where feasible, to distribute an estate as soon as possible after the 6 month limitation period lapses, particularly where a potential claim exists.

Interest on a pecuniary legacy – 12 months from death

A gift of money in a will (called a pecuniary legacy) starts to attract interest³ if it has not been paid within one year after the testator dies.

Accordingly, an LPR should, where possible, seek to make payment of pecuniary legacies within this period of time, to prevent interest accruing.

How we can help

Planning is key when administering a deceased estate and knowing what timeframes apply is crucial to limiting the risk of liability. Our team of deceased estates legal experts can help you if you have any queries navigating these timeframes.

Contact us

Please contact us for more detailed and tailored help.

Subscribe to our email updates and receive our articles directly in your inbox.

Disclaimer: This article provides general information only and is not intended to constitute legal advice. You should seek legal advice regarding the application of the law to you or your organisation.

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¹Rule 2.03 of the Supreme Court (Administration and Probate) Rules 2014).

²Section 49 of the Administration and Probate Act.

³At the ‘legacy interest rate’ which is the rate that lies 2 per cent above the cash rate last published by the Reserve Bank of Australia: s39B(3) of the Administration and Probate Act 1958 (Vic)

When acting as executor it’s crucial that you fully appreciate the task ahead, and the risk of liability that comes with the role, before accepting it.

Proper planning is key to ensuring that it’s ultimately a rewarding role, and not a costly one. Crucial to this planning, is knowing what timeframes apply when administering an estate.

We’ve prepared a snapshot of some important timeframes to bear in mind. Download our Deceased Estate Key Time Frames fact sheet here.

If you would like any further information, have an enquiry relating to deceased estates or an estate dispute, please do not hesitate to contact us.