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EXECUTOR'S COMMISSION IN MELBOURNE

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Executor's right to Commission

EXECUTOR'S COMMISSION

Amount of commission relates to size of estate; the pains (responsibility or anxiety), trouble (work done) in administering it, and only in exceptional circumstances will the Court refuse to grant commission.

Legislation provides a maximum rate of 5%; provides rates for trustee companies too, but these are not to be used in the case of personal representatives

Barr Smith scale (for use as a guide in large estates):

1    On special assets got in and realised being cash, money in bank, etc. – 1.5% on first $2,000, 1% on amounts from $2,000 to $200,000; 0.75% on amount over $200,000

2    On other assets got in an realised – 5% on first $2,000; 2.5% on amount over $2,000

3    On unrealised real or personal property (not being cash) transferred and delivered to a beneficiary, based on property’s value – 1.25% on first $20,000; 0.75% on amount over $20,000

4    On income got in yearly – 5% on first $2,000; 2.5% on amount over $2,000

5    As regards the amount of corpus or income got in realised or collected with the assistance of agents or solicitors for the estate – ½ the values stated above

In general, the practice has been to award commission of 1.5%-3% on corpus and 3%-5% on income and generally, it is 2.5% on corpus and 5% on income.

The professional understanding of the executor is relevant (e.g., a lawyer will get more for less time, than a layperson). There is no prima facie rule that if an executor is a beneficiary they are not entitled to commission (unless the legacy expressed in the Will as being in lieu of remuneration, or commission, or where the gift is too small as to be illusory).

The following is an indication an executor may express in the affidavit of pains and troubles:

a)    Work done in arranging the funeral, protecting the deceased’s assets immediately after death, and sorting through deceased’s belongings, etc;

b)    Executor’s attendances on legal advisors/accountants;

c)    Time spent, etc., at meetings with co-executors;

d)    Work or effort of a special or unusual nature involving special skill and judgment (e.g.: locating difficult assets, managing a business, managing rental properties, settlement of Testator Family Maintenance claims, dealing with interests of infant beneficiaries, etc.).

NEED MORE INFORMATION

Behan Legal assists and advises on these important issues. For an appointment, call 03 9646 0344 .

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