Yes you can, however, historically, an executor could not seek payment for their time and troubles.
Duties of an executor
Executors are in an important position and owe duties to beneficiaries, and generally can not profit or benefit from their role. However, there are exceptions to this such as where all adult beneficiaries, who are competent adults, agree; where the will permits commission or remuneration; or where the Court orders it.
Executors and trustees can apply to the Court to receive commission or remuneration. The legislative power for the Court to award commission is found in section 70 of the Administration and Probate Act 1919 and section 91 of the Trustee Act 1936.
Before commission or other remuneration can be obtained through the Court it must be shown that the executor has been faithful, honest and diligent in the performance of the trust.
There does not need to be special circumstances to allow commission or remuneration; the Court has power to order it where it considers it just and reasonable to do so.
Delay in performing duties might result in commission being reduced. Commission may also be refused if the executor has been involved in misconduct, which is serious or amounts to fraud.
The Court will determine the amount of commission. It is not specified in legislation. The Court came up with a scale in 1920, commonly known as the ‘Barr Smith’ scale (named after the case), which was dependent on the type of assets, the value of them, the type of work involved, the degree of difficulty and whether or not an agent, such as lawyer, was instructed. Very broadly, the scale allowed a commission of 0.7 to 5 per cent on capital assets and 2.5 to 5 per cent on income.
There is also an Indicator, published by the Court to assist with determining the amount of commission that should be allowed. The Indicator applies to deceased estates worth $1 million or less and where probate or letters of administration was granted after 1 July 2013.
The Indicator says that in estates where the amount on which commission is sought is $1 million or less and where there are no special circumstances, the Court will likely allow commission on the value of capital and income of at least one per cent on the first $500,000 of the estate and at least half of one per cent on the balance. It does not matter whether paid agents, such as a lawyer, were employed.
The Court continues to have discretion to allow a greater or lesser amount depending on the particular circumstances of each case.
The cost of an application by an executor for commission is payable from the deceased’s estate.
If you are an executor, administrator or trustee and seek commission, or are a beneficiary of an estate where commission is being sought, you should contact us now to discuss your options.
