When someone takes on the responsibility of being an executor of a will, it often involves a significant commitment of time and energy.
Many wonder, “Does the executor of will get paid for this effort?” The answer is generally no, but the details depend on multiple factors.
This guide will explore the roles of an executor and discuss the concept of executor’s commissions, breaking down when and how an executor might receive payment for managing an estate.
Get ready to gain clarity on this essential topic.
What is an Executor?
An executor is a person or institution designated in a will to carry out the desires and instructions of the deceased testator.
The executor is responsible for administering the deceased person’s estate, which entails collecting and valuing assets, paying debts and taxes, and distributing the remainder of the estate according to the terms of the will.
The executor has a fiduciary duty to act in the beneficiaries best interests and to administer the estate responsibly and efficiently.
The executor may be a member of the decedent’s family, a close acquaintance, or a professional, such as a lawyer or accountant.
Appointing an executor is a crucial decision that requires careful consideration of the individual’s skills, experience, and willingness to assume the responsibility.
Rights and Responsibilities of Executors
The testator, the person who created the will, appoints executors who are responsible for carrying out the instructions in the will and administering the estate. Executors have the following privileges and responsibilities.
Rights of Executors:
- Right to compensation: Executors are entitled to be compensated for their time and effort in administering the estate. The amount of compensation can be specified in the will or may be determined by law.
- Right to seek professional advice: Executors can seek the assistance of professionals such as lawyers, accountants, and financial advisors to help them carry out their duties.
- Right to distribute the estate: Executors have the right to distribute the assets of the estate to the beneficiaries according to the instructions in the will.
- Right to defend the estate: Executors have the right to defend the estate against any claims made against it.
Responsibilities of Executors:
- Duty of care: Executors must act in the best interests of the beneficiaries and manage the estate with care and prudence.
- Duty to pay debts and taxes: Executors must pay all debts and taxes owed by the estate before distributing any assets to the beneficiaries.
- Duty to distribute the estate: Executors must distribute the assets of the estate to the beneficiaries according to the instructions in the will.
- Duty to keep accurate records: Executors are required to keep accurate records of all financial transactions related to the estate and provide an accounting to the beneficiaries upon request.
- Duty to act impartially: Executors must act impartially and avoid favouring one beneficiary over another.
The role of an executor comes with both rights and responsibilities.
Executors must carry out their duties diligently and responsibly to ensure that the wishes of the testator are fulfilled and the beneficiaries receive their rightful inheritance.
Does The Executor Of the Will Get Paid?
No, in most situations executors do not receive a commission for administering an estate.
You could be paid as an executor if the will specifically says you should be. This might be in a situation where the executor is a legal professional, accountant, or someone else who has a professional relationship with the deceased.
The executor’s commission is intended to compensate them for the time, effort, and expenses they’ve put into managing and distributing the estate’s assets.
The specific amount of the commission can vary. It might be set out in the will itself, or if it doesn’t mention it, the executor may apply to the court for a commission.
Also read: Executor vs Administrator
How Much Does an Executor Get Paid in Queensland?
There is no set commission amount that an Executor can be entitled to. In most cases, the court will award a commission as a fixed sum or a percentage of the estate. Here is an approximate range:
| 0.25% to 1.25% | Transferred assets value |
| 0.5% to 2.5% | Capital gains |
| 1% to 5% | Collection of income by the estate |
| 3% to 5% | Larger, more intricate estates |
The court will then decide whether to award a commission and, if so, how much, based on factors like the size and complexity of the estate and the amount of work involved.
The executor’s commission is paid out of the estate’s assets. Therefore, executors should keep detailed records of their time and expenses for managing the estate.
Alternatively, the will may stipulate a set figure for the amount the executor should receive for their services as an executor.
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What Factors Influence the Fee of an Executor?
Several factors can influence the remuneration of an executor:
Will’s Provisions
The will itself may stipulate the executor’s remuneration. Some wills may provide a fixed amount, a percentage of the estate’s value, or a specific asset as payment.
Size and Complexity of the Estate
Larger or more complex estates often require more work, so executors might receive more remuneration in such cases. The nature of the assets, whether the deceased owned a business, and if there are assets in other jurisdictions can all add complexity.
Time and Effort Spent
The amount of time and effort the executor needs to devote to administering the estate can affect the remuneration. This might encompass tasks like locating and valuing assets, dealing with creditors, preparing tax returns, and managing court proceedings.
Professional Skills or Expertise
If the executor uses their professional skills or expertise (e.g., legal, accounting, real estate), this can influence their remuneration.
Potential Conflicts of Interest
If the executor is also a beneficiary, there might be a potential conflict of interest. The executor may decide not to claim a commission to preserve the estate’s value for all beneficiaries, especially if the executor stands to inherit a significant portion of the estate.
Court Determination
If the will does not specify the executor’s remuneration, the executor can apply to the court for a commission. The court will consider factors like those above to determine fair compensation.
When it comes to paying an executor’s commission in Queensland, there are several legal considerations to bear in mind
Reasonableness of the Commission
The commission must be reasonable. Even if the will specifies a particular amount or percentage, a beneficiary could challenge it in court if it’s excessively high.
Tax Implications
The commission received by an executor is generally considered taxable income. Executors should consult with a tax professional to understand the implications.
Does the Executor of Will Get Paid?
As an executor, understanding your role and entitlements is crucial.
At Walker Pender, we are here to shed light on your responsibilities and rights. Don’t let uncertainty rule; let our expertise work for you. Reach out today for a complimentary consultation!
