top of page
Search
  • Writer's pictureTatiana Holguin

Executor Commission in Victoria: What is it and the Court Process

An executor is a person appointed by a will to carry out the will maker’s wishes. Often, an executor is a person that the will maker trusts, such as a spouse, parent, child, friend or solicitor.

 

The role of an executor is not often easy.

 

The duties of an executor include, but are not limited to:

 

  • The duty to locate and identify the last will;

  • The duty to dispose of a deceased’s body and arrange a funeral;

  • The duty to identify the nature and extent of a deceased’s assets and liabilities;

  • The duty to identify beneficiaries and inform them of their beneficial entitlement;

  • The duty to bring in the assets of the estate and to pay liabilities; and

  • The duty to uphold the terms of the will, and to administer the estate in accordance with those terms.

 

In administering an estate, an executor can often face obstacles resulting in significant work, responsibilities and stress.

 

Executors may, but are not necessarily, adequately compensated.

 

There are three methods by which an executor can receive commission for their work as an executor:

 

  1. In accordance with a clause in the will that specifies a rate of commission which the executor is authorised to be paid;

  2. By agreement of all of the beneficiaries, all of whom need to be sui juris and receive sufficient information to enable them to make an informed decision to approve the request for commission; or

  3. By applying to the Court for commission.

 

For the purpose of this article, we will focus on an application to the Court for commission.

 

In applying to the Court, an executor will need to provide formal estate accounts and comprehensive affidavit material detailing the work performed by the executor.

 

As with all Court applications, there is no guarantee of success and any decisions made, including as to payments of the cost of the application, are at the discretion of the Court.

 

When deciding the amount of commission, the Court will take into account the ‘pains and trouble’ incurred by an executor, while considering the following factors:

 

  • The size and complexity of the estate;

  • The complexity of the terms of the will or scheme of distribution under the will;

  • The degree of promptness, efficiency and diligence shown by the executor or administrator in completing tasks;

  • The number of routine and complex tasks to be undertaken to disburse the estate;

  • The amount of work carried out and time spent;

  • The amount of responsibility involved, which may be ongoing;

  • Problems encountered in the course of administering the estate; and

  • The number of executors sharing the load of managing the estate.

 

In Victoria, the legislation states that an executor is entitled to commission ‘not exceeding 5%’ of the estate. More commonly, the Court will permit commission of between 1%-3%.

 

It is important to note that prior to making an application to the Court, an executor should obtain independent taxation and account advice in relation to seeking commission out of the estate.

 

To get started on including a clause for commission in your will, or applying to the Court for commission, contact a member of our estate planning team on (03) 9311 8911. The information contained in this article is general in nature and does not take into account your personal situation. This information should not be relied upon in place of appropriate professional advice. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a solicitor.

 

115 views0 comments

Recent Posts

See All

Kommentare


bottom of page