What is Executor’s Commission?
An executor may seek “commission” based on the nature of tasks performed and the responsibility taken for maintenance or care of assets. The executor’s burden is often referred to as “pains and troubles”. The extent of the commission depends on the extent of the pains and troubles. Duties undertaken by an executor might include:
Taking stock of assets
Negotiating with beneficiaries
Preparation of properties for sale
The conduct of a business pending sale
Deciding sale prices and performing sales
Investment of funds
If required, managing life tenancies.
These can all be onerous duties. The executor accepts responsibility as a trustee or fiduciary and can be personally sued for mistakes. It’s important to note that an Executor’s Commission cannot be levied without an order of the court or unanimous agreement of beneficiaries. As a rule of thumb, the maximum commission allowed by a court will be 6% on income derived and 5% on capital realised.
The maximums are generally reserved for very complicated, long-duration, or time-consuming estates. Executors should keep records of work done in their executorial role to justify commission.
Use our free online Assessment Tool to calculate Executor’s Commission potentially payable in the estate with which you are concerned