Executor’s commission refers to the entitlement of the executor or personal representatives for their work in administering a deceased estate.
Who is Entitled to Executor’s Commission?
The formal process to qualify for executor’s commission involves the executor filing an application to the Court to decide whether to grant commission and the amount that should be awarded. Under section 68 of the Succession Act (Qld) 1981 the Court may award remuneration or compensate an executor, trustee or personal representative. The application is considered having regard to the nature and size of the estate, and the efforts required by the Executor.
Commonly, executor’s commission is fixed as an agreed amount between beneficiaries, and paid at the conclusion of the estate administration process. There are particular rules about the amount of commission that should be paid and we recommend telephoning Gold Coast Estate Law on (07) 5532 9744 to discuss your concerns further.
If I apply to the court, will it be awarded?
Commission is not always awarded and may be refused if:
- delay in the administration was excessive;
- if the executor’s efforts provided no real benefit; or
- if the executor has already been bequeathed a legacy by the deceased which is sufficient in terms of remuneration; or
- If there is fraud, dishonesty or disentitling conduct on behalf of the executor
If the Court finds that the executor has been careless or wasteful in their administration of the estate, they may reduce or disallow payment of executor’s commission.
How much is commission and is it worthwhile?
The amount of commission granted is determined by the Court or by agreement. In deciding how much commission should be paid, the court considers the work done and the amount that would be reasonable in the circumstances. Commissions paid will also vary depending on the nature of the assets owned by the estate. As a very approximate guide, commission can be between 1 and 5 percent of the value of the estate.
Tax
Executor’s must be aware that commission is taxable and must be included in your taxpayer’s assessable income as a ‘payment’ under paragraph 26(e) of the Income Tax Assessment Act 1936.