Can an Executor Be Paid in Victoria? Understanding Executor Commission

What Does an Executor Actually Do?

Before considering whether an executor should be paid, it helps to understand what the role actually involves. Although every estate is different, an executor is typically responsible for:

• arranging the funeral and obtaining the death certificate;
• locating the original will and confirming its validity;
• identifying and valuing the assets and liabilities of the estate;
• applying to the Supreme Court of Victoria for a grant of probate where required;
• collecting bank accounts, superannuation entitlements and insurance proceeds;
• dealing with real estate — securing, insuring, maintaining and ultimately transferring or selling property;
• paying debts, funeral expenses, testamentary expenses and tax liabilities;
• lodging the deceased's final tax return and any estate tax returns;
• keeping detailed accounts and reporting to beneficiaries;
• distributing the estate in accordance with the will or applicable intestacy rules.

The role is fiduciary. The executor is required to act in the best interests of the estate and the beneficiaries, not in their own interests. That fiduciary character is a key reason why entitlement to payment is treated cautiously. For a fuller overview of the role, see our companion article on the duties of an executor in Victoria.

Can an Executor Be Paid?

The general rule in Victoria is that an executor acts gratuitously. They cannot help themselves to a fee out of the estate just because they have worked hard. Payment becomes available only where one of the following applies:

• the will expressly authorises remuneration or commission;
• every beneficiary affected agrees, with full information and capacity, to pay the executor;
• the Supreme Court of Victoria approves an award of commission under the Administration and Probate Act 1958 (Vic).

Outside those three avenues, an executor is not entitled to be paid. They are, however, always entitled to be reimbursed for properly incurred expenses, which is a separate concept dealt with below.

Reimbursement of Expenses vs Commission

It is important to distinguish between reimbursement and remuneration. An executor may recover from the estate the reasonable out-of-pocket expenses they incur in administering it. Typical examples include:

• court filing fees on the probate application;
• advertising costs and search fees;
• professional fees paid to lawyers, accountants and valuers;
• postage, photocopying, certified copy fees;
• insurance premiums for estate property;
• travel expressly required to manage estate assets.

Reimbursement of expenses is not "payment" of the executor. It is simply repayment of money the executor has spent on behalf of the estate. Beneficiary consent or court approval is not required, but the executor should keep accurate records and original receipts.

Commission is different. Commission is payment for the executor's own time, effort and responsibility — the "pains and trouble" of administration. That is what the will, beneficiaries or Court must authorise.

When a Will Specifically Allows Executor Commission

Many well-drafted wills include a commission or charging clause. The clause may:

• fix a percentage of the gross or net value of the estate;
• fix an hourly rate or a flat fee;
• authorise a professional executor — typically a solicitor, accountant or trustee company — to charge their professional rates for work done in the administration;
• authorise commission on capital and income separately, in line with how Victorian courts traditionally assess remuneration.

Where a clause exists and is clear, it generally governs. The executor can take what the will provides without further consent or court approval, provided the calculation is honest and the clause is properly construed. Where a clause is ambiguous, or where multiple executors are appointed and the will is silent on apportionment, disputes can still arise.

Can Beneficiaries Agree to Pay an Executor?

If the will is silent and all beneficiaries are adults with capacity, they can agree among themselves to pay the executor a specified sum. The agreement should be in writing, signed by every beneficiary affected and based on full disclosure of:

• the work the executor has done or proposes to do;
• the amount proposed and how it has been calculated;
• the impact on each beneficiary's entitlement.

Where a beneficiary is a minor, lacks capacity, is unborn or cannot be located, this informal route is not available. In those circumstances, the executor must apply to the Court.

Court-Approved Executor Commission

The Administration and Probate Act 1958 (Vic) empowers the Supreme Court of Victoria to allow an executor commission for the pains and trouble of administration. An application is required where the will is silent and beneficiary agreement cannot be reached or is not legally available.

The application is usually brought as part of a passing of accounts, in which the executor presents a detailed statement of the receipts, payments and assets of the estate. The Court assesses both the accounts and the proposed commission, and may require independent valuation of complex assets or expert evidence about market rates for executor work.

What Are "Pains and Trouble"?

The phrase "pains and trouble" is the traditional Victorian shorthand for the work, responsibility and stress shouldered by the executor. When the Court assesses commission, it looks at both elements:

• Pains — the responsibility and anxiety associated with managing the estate, including dealing with difficult beneficiaries, contested decisions, hostile correspondence and significant financial exposure.
• Trouble — the actual labour, time and attention required, including correspondence, attendances on advisers, decisions about assets, dealings with the ATO and communications with beneficiaries.

The Court is not awarding a "wage" for hours worked. It is recognising that the executor has assumed a personal fiduciary burden and is entitled to reasonable compensation for doing so.

How Much Commission Can Be Awarded?

There is no fixed percentage in Victoria. The Court exercises its discretion having regard to all of the circumstances. Factors that typically influence the amount include:

• the size and nature of the estate;
• the complexity of the assets and liabilities;
• the period over which administration extended;
• whether litigation, a family provision claim or contested probate added complexity;
• the skill required and the executor's qualifications;
• the outcomes achieved for beneficiaries;
• whether the executor has charged separately for professional services;
• any benefit the executor receives under the will itself.

Commission is often expressed as a percentage of capital and income separately, with capital commission generally lower than income commission. The figures that have been historically awarded in Victorian estates range broadly between roughly 1% and 5% of the estate's value, but the underlying assessment is always qualitative.

Executors Who Are Also Beneficiaries

It is very common for a will to appoint a spouse, child or other beneficiary as executor. The Court approaches commission applications by executor-beneficiaries with particular care.

Where the gift in the will appears to have been intended in part as recognition for acting as executor — which the Court may infer from the size of the gift and the relationship — commission may be reduced or refused. Where the work undertaken has clearly exceeded what could reasonably have been intended to be covered by the gift, commission may still be appropriate.

Executor-beneficiaries should keep contemporaneous records of the work they perform from the outset, so that if a commission application later becomes necessary the evidence is available.

Professional Executors and Professional Fees

Where a solicitor, accountant or trustee company is appointed as executor, the will typically authorises them to charge their usual professional rates for work done in the administration. Where the will permits, the professional executor can charge without further consent.

Care is required to avoid double-recovery. Time spent doing legal work for the estate may properly be charged at professional rates, but the same time cannot also be the basis for a commission claim. Beneficiaries are entitled to itemised invoices and to challenge fees they consider unreasonable.

Common Executor Commission Disputes

Disputes about executor remuneration tend to fall into a small number of categories:

• commission claimed where the will is silent and the beneficiaries do not agree;
• excessive percentages claimed in modest or simple estates;
• lawyer-executors charging both commission and legal fees for the same work;
• executor-beneficiaries seeking commission in addition to a substantial gift;
• poor record keeping making it impossible to test the work claimed;
• delay in administering the estate that calls into question the value of the executor's effort;
• conflict with co-executors who cannot agree on the conduct of the administration.

Most of these disputes can be avoided with a clearly drafted commission clause when the will is prepared and disciplined record keeping during the administration. Where disputes escalate to a point of irretrievable breakdown, beneficiaries may consider an application to remove or replace the executor — a separate but related remedy.

When Legal Advice May Be Required

Both executors and beneficiaries benefit from independent legal advice where executor remuneration is in issue. An executor should consider obtaining advice before:

• accepting an appointment in a complex or contested estate;
• seeking consent from beneficiaries to commission;
• preparing an application for court-approved commission;
• responding to objections from beneficiaries.

Beneficiaries should consider obtaining advice before:

• signing any consent to executor commission;
• responding to a notice of proposed commission;
• challenging a commission claim or seeking a passing of accounts.

Where the underlying dispute concerns the will itself, separate considerations arise — see our guide to contesting a will in Victoria. For estates involving trust structures, the rules in our testamentary trusts explainer may also be relevant.

Conclusion

Executors in Victoria are not automatically entitled to be paid. They may be reimbursed for properly incurred expenses, and they may receive commission only where the will authorises it, the beneficiaries agree, or the Court approves. The rules exist to balance two competing interests — recognising the burden carried by an executor while protecting beneficiaries from over-remuneration of someone occupying a position of trust. Whether you are about to accept appointment as executor, are already in the middle of an administration, or are a beneficiary asked to consent to commission, taking advice early is the most efficient way to keep the estate moving and the family relationships intact. Our Probate & Estate Administration team regularly acts for both executors and beneficiaries on these issues, supported when needed by our Estate Litigation practice.

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