How to obtain executor commission?
Executors’ commission involves an executor of a Will obtaining remuneration for the administration of a deceased’s estate. The respective States and Territories recognise the time and effort an executor may take in carrying out such administration.
However, the Court’s considerations when assessing an application for executor commission, as well as the commission rates, vary across the States and Territories as follows:
New South Wales
New South Wales | ||
|---|---|---|
General considerations | Legislative provision | Commission rates |
In NSW, an executor can apply to the NSW Supreme Court seeking commission for administering the estate. An executor won't receive any commission if they fail, without a valid reason, to submit the accounts regarding the deceased person's estate as required by the Court's rules or orders | Section 86 of Probate and Administration Act 1898 (‘PAA’) grants the Supreme Court power to allow the executors’ commission for the ‘pain and trouble as is just and reasonable’. Section 86A of the PAA permits the reduction of commission that is charged or proposed to be charged if it is considered excessive. | The following rate ranges generally apply as a guide:
|
Australian Capital Territory
Australian Capital Territory | ||
|---|---|---|
| General considerations | Legislative provision | Commission rates |
| The ACT Supreme Court believes executors of estates should only receive commissions in exceptional cases. The Court determined these exceptional cases to include where the ‘task of administering the estate is onerous, or where the responsibility, anxiety and worry of administering the estate is beyond what would ordinarily be required.’[1] | Section 70 of the Administration and Probate Act 1929 permits the Supreme Court to allow from the assets of the estate, commission for the executor’s ‘services’ for an amount ‘that is just.’ Under rule 2748 of the Court Procedure Rules 2006 (ACT), an executor ‘must file a full and correct account of the administration of the estate.’ | The rates are deemed to be determined on a case-by-case basis and are not subject to specified ranges.[2] |
Victoria
Victoria | ||
|---|---|---|
General considerations | Legislative provision | Commission rates |
Either one of the following must occur:
| Under section 65 of the Administration and Probate Act 1958, an executor may receive ‘a commission or percentage not exceeding [5%] for [their] pains and trouble as is just and reasonable.’ Section 65A - where the Court is satisfied that the amount of commission is excessive, the Court may reduce the amount or have it repaid to the estate. | The rate under section 65 is not to exceed 5%. |
Queensland
Queensland | ||
|---|---|---|
General considerations | Legislative provision | Commission rates |
The Court will take various factors into account as per rule 657E of the Uniform Civil Procedure Rules 1999 including: ‘the value and composition of the estate, the provisions of the Will; the conduct of all persons connected with the administration of the estate, the nature and extent of the work done including non-professional work, the efficiency of the administration and any other relevant matters.’ | Section 68 of the Succession Act 1981 allows the QLD Supreme Court to authorise the payment of commission to the personal representative of the estate for their services. In making this allowance, the Court may attach certain conditions to the payment of the commission. Rule 657C of the Uniform Civil Procedure Rules 1999 requires an executor applying for commission to provide an affidavit in support. | The Court in Queensland has awarded varying percentages as commission for the administration of an estate. These include:
|
Western Australia
Western Australia | ||
|---|---|---|
General considerations | Legislative provision | Commission rates |
Executor commission may be paid where at least one of the following circumstances occurs:
| Section 98 of the Trustees Act 1962 states that executor / trustee remuneration may be awarded by the Court out of the property ‘subject to any trust…for that person’s services as is just and reasonable. Section 107 of the Trustees Act 1962 states that payments, including remuneration and commission to a trustee for the administration of a deceased estate, are considered testamentary expenses. | 5% of the gross value of the trust property. |
Northern Territory
Northern Territory | ||
|---|---|---|
General considerations | Legislative provision | Commission rates |
The Court may use its discretion to determine what is a just and reasonable rate of commission by assessing the factors in administering the estate. This could include the size and total value of the estate, whether there was involvement from solicitors, accountants or other such professionals, or the time required for the administration of the estate. | Section 102 of the Administration and Probate Act 1969 permits the Court to allow commission or a percentage not exceeding 5% for the executor’s ‘pains and trouble as is just and reasonable’. Such an allowance is not permitted where the executor ‘neglects or omits, without a special order of the Court to pass their accounts relating to the administration of the relevant estate.’ | Under section 102(1) the rate cannot exceed 5%. |
South Australia
South Australia | ||
|---|---|---|
General considerations | Legislative provision | Commission rates |
The Court can use its discretion to decide what is a fair rate of commission. Administrators who fail to submit the required estate statement and account promptly, or mishandle the estate's administration, won't be eligible for any commission or payment. | Section 96 of the Succession Act 2023 permits executor commission out of the estate as the Court considers just and reasonable. | The Court is yet to apply the new legislation, which has seen the repealing of all previous legislation in South Australia regarding executor’s commission. |
Tasmania
Tasmania | ||
|---|---|---|
General considerations | Legislative provision | Commission rates |
The Court has the power to ensure the due administration of the estate, and to make orders as may be required. | Section 64 of the Administration and Probate Act 1935 gives the Court the power to make orders for the administration of the estate. The Court has the power to make an order for the commission or percentage to an executor, not exceeding 5% of the estate for the executor’s ‘pains and trouble therein as shall be just and reasonable’ | Under section 64, the commission is not to exceed 5% of the estate. |
Meaning of ‘pains and trouble’ and ‘services’ of the executor
Across the States and Territories, varied terminology is used in the legislation when discussing the reasons for allowing commission. The Courts have established that ‘pains’ are often considered the ‘responsibility, anxiety and worry’ associated with the administration of the estate, and ‘trouble’ is referred to as the work completed by the executor in administering the estate. As for the use of the term ‘services’ in legislation, the ACT Supreme Court has ascribed the same meaning to the words as is associated with ‘pains and trouble’.
How to claim executor commission?
It’s usually recommended the estate be fully or almost fully administered before an executor seeks commission. This way, beneficiaries can understand what work has been done and decide whether the commission is appropriate. Beneficiaries are less likely to agree to a claim for executor commission, or the Court to award commission, if there are too many outstanding matters in relation to the estate’s administration.
Where there is agreement by the affected beneficiaries, provided they are all adults with legal capacity, there is no requirement for the executor to receive approval from the Court.
If the beneficiaries can’t agree, the next step is for the executor to ask the Supreme Court in their State or Territory for an order. This order would determine an amount they consider to be ‘just and reasonable’ for the administration of the estate. In New South Wales, to request approval for accounts and commission, you file a Notice of Motion along with a supporting Affidavit under the Court's probate file. In filing the motion, supporting documentation, including documentary evidence of the proper accounts of all the assets within the estate that were considered by the executor, is required.
Objections to a claim for commission are permitted, although the objecting party, who is often a beneficiary or a creditor, is not permitted to make submissions.
Where there are multiple executors, a joint application is typically made to the Court for executors’ commission. The entitlement of up to 5% of the estate, for example, applies to the total number of executors. Executors need to be aware that such commission may be included as part of the executor’s assessable income as either ordinary or statutory income.
Court considerations
In considering the appropriate commission to be allocated, if any, the Court will generally take into consideration some of the following aspects:
the interpretation of the Will and the complexity of its terms;
the value, size and complexity of the estate;
whether other professional advice was required including legal and financial, which would likely relieve the executor of some or all of the ‘pains’ associated with the administration;
the degree of responsibility attributed to the executor;
whether the estate was involved in any litigation;
the time spent on the accurate administration of the estate; and
whether the estate has benefited from the executor’s administration.
Although each State and Territory varies on commission rates, the consensus is that an executor is entitled to claim up to 5% of the gross value of the estate. Commission can be awarded as both a lump sum payment or as a percentage of the estate; however, the rates are often assessed on a case-by-case basis and are largely dependent on various factors, which require the Court’s assessment and discretion. It is also unusual for a Court to award more than 3.5% commission.
Is executor commission guaranteed?
At the outset, an executor is expected to act gratuitously, and executor commission isn’t guaranteed. In the case of Re Estate Gowin: Application for executor’s Commission (2014),[3] granting executor commission is up to the discretion of the Court. Consequently, it may be denied for valid reasons such as a ‘breach of trust, neglect, or disregard of fiduciary obligations.’[4] If you or someone you know is seeking to make a claim for executors’ commission, or you want to oppose a claim for commission, please contact us to discuss the claim.
[1] Re Estate of Wilson; Application for Executor’s Commission [2023] ACTSC 186
[2] Ibid.
[3] Re Estate Gowing; Application for Executor's Commission [2014] NSWSC 247
[4] Ibid [67]-[68].
