Executor's Commission Queensland
Understanding your entitlement to claim executor's commission under Queensland law. Expert guidance on claiming 1-3% of estate corpus plus income commission.
What is Executor's Commission?
Executor's commission is payment that recognizes the work, responsibility, and personal liability involved in administering a deceased estate. Under Queensland law, an executor is entitled to claim commission for their "pains and troubles" in carrying out estate administration duties.
The concept acknowledges that executor administration is complex, time-consuming work that carries significant legal responsibilities. An executor faces personal liability for mistakes and must navigate intricate legal requirements while managing family expectations and emotional dynamics during estate administration.
Key Points About Executor's Commission
- Payment is discretionary - an executor may claim commission but is not required to
- Based on work performed - estate commission reflects actual responsibilities undertaken by the executor
- Separate from inheritances - commission is paid in addition to any benefit under the will
- Income tax implications apply - commission is generally treated as assessable income
Understanding "Pains and Troubles"
Pains refers to the responsibility, stress, and personal liability an executor accepts when administering an estate. This includes the anxiety of making decisions that affect beneficiaries' inheritances and the potential for personal financial exposure if mistakes are made during estate administration.
Troubles encompasses the actual work performed by the executor, including time spent on executor administration tasks, dealing with professionals, managing estate assets, communicating with beneficiaries, and completing legal requirements under Queensland law.
How Much Can an Executor Claim in Queensland?
Queensland law allows an executor to typically claim commission rates ranging from 1-3% of the estate corpus, plus up to 6% of any income earned by the estate during administration. These commission rates are determined by the court based on the complexity and size of the estate.
Commission on Estate Corpus
The corpus means the net value of the estate - that is, all assets minus all liabilities. An executor calculates this after:
- Identifying and valuing all estate assets
- Paying all debts, including mortgages and loans
- Settling funeral expenses
- Paying estate administration costs
- Settling tax and income tax liabilities
| Estate Corpus | 1% Commission | 2% Commission | 3% Commission |
|---|---|---|---|
| $500,000 | $5,000 | $10,000 | $15,000 |
| $1,000,000 | $10,000 | $20,000 | $30,000 |
| $2,000,000 | $20,000 | $40,000 | $60,000 |
| $5,000,000 | $50,000 | $100,000 | $150,000 |
Commission on Income
An executor may also claim up to 6% of income earned by the estate during executor administration. This estate commission on income is separate from the corpus commission. Types of income an executor may claim commission on include:
- Rental income from investment properties managed by the executor
- Dividend income from shares held in the estate
- Interest income earned on estate bank accounts
- Business income if the estate includes operating businesses
- Investment returns on managed funds administered by the executor
The executor should note that income earned during administration may be subject to income tax, and commission claimed on that income is also assessable income for taxation purposes.
Paul's Estate Administration
Paul is the executor of his late mother's estate. The deceased estate includes:
- Family home valued at $1.2 million with a $200,000 mortgage
- Share portfolio worth $400,000
- Motor vehicle valued at $35,000
- Bank accounts totaling $65,000
After Paul, as executor, pays the mortgage ($200,000), funeral expenses ($12,000), and legal costs for probate ($825), the deceased estate corpus is $1,487,175.
Paul's potential executor's commission entitlement ranges from $14,871 (1%) to $44,615 (3%). The court would consider Paul's work as executor in determining the appropriate commission. Additionally, the share portfolio generated $18,000 in dividends during the 10-month estate administration period, allowing Paul to claim up to $1,080 (6%) in income commission.
As executor, Paul decides to waive his commission entitlement, as he's also one of five equal beneficiaries and prefers to maximize distributions to all siblings. An executor is not required to claim commission even when entitled.
Legal Framework for Executor's Commission
Executor's commission is governed by specific legislation in each Australian state and territory. Queensland's legal framework provides an executor with clear entitlements while giving the Supreme Court discretion to determine appropriate commission amounts.
Queensland Law and Legislation
Section 68 of the Succession Act 1981 (Qld) - the key probate act in Queensland - states that the Supreme Court may grant commission to a personal representative (executor) "as the court considers proper." This gives the Supreme Court broad discretion to assess what is fair and reasonable commission based on the circumstances of each estate and the executor's work.
The court considers the executor's performance of duties when determining whether commission should be granted and at what rate. Queensland law recognizes that executor administration requires significant time, expertise, and carries personal liability.
Court Discretion and Law in Commission Determinations
The Supreme Court's discretion under Queensland law allows flexibility in commission determinations. The court considers both the statutory framework and common law principles when assessing an executor's commission claim. This discretion means the court can adjust commission to reflect the unique circumstances of each deceased estate.
The court may reduce or deny commission where an executor has breached their duties under law, engaged in misconduct, or failed to properly administer the estate. Conversely, the court may approve higher commission rates where the executor demonstrated exceptional skill or managed particularly complex estate administration.
Other Australian States
| State/Territory | Legislation |
|---|---|
| Queensland | Section 68 Succession Act 1981 (Qld) |
| New South Wales | Section 86 Probate & Administration Act 1898 (NSW) |
| Victoria | Section 65 Administration & Probate Act 1958 (Vic) |
| South Australia | Section 29 Administration and Probate Act 1919 (SA) |
| Western Australia | Section 69 Administration Act 1903 (WA) |
While the specific legislation varies, all Australian jurisdictions recognize the principle that executors are entitled to reasonable remuneration for their work administering estates.
Factors That Determine Commission Amounts
Queensland courts consider multiple factors when determining appropriate executor's commission. Understanding these factors helps an executor assess their likely entitlement to commission.
1. Size of the Estate
Larger estates typically justify higher percentage commission for the executor due to increased complexity and responsibility. However, the court may apply sliding commission rates that decrease as a percentage for very large estates (for example, 3% on the first $1 million, 2% on the next $1 million, 1% thereafter).
2. Care and Responsibility Required of the Executor
Factors that increase care and responsibility for an executor include:
- Managing investment portfolios on behalf of the estate
- Overseeing business operations during estate administration
- Dealing with complex asset structures in the deceased estate
- Navigating family disputes, estate litigation, or contested wills as executor
- Managing multiple properties or international assets
- Addressing tax planning and income tax optimization for the estate
3. Time Spent on Estate Administration
The court considers the total time commitment of the executor when determining commission, including:
- Hours spent by the executor on administrative tasks
- Meetings with lawyers, accountants, and other professionals
- Time the executor spent communicating with beneficiaries
- Property inspections and sale processes managed by the executor
- Investment management and decision-making
- Document preparation and record-keeping during executor administration
4. Skill and Competence Demonstrated by the Executor
Higher commission may be granted by the court where an executor demonstrates:
- Professional expertise relevant to estate administration
- Successful negotiation with creditors or beneficiaries
- Effective tax and income tax planning that saves the estate money
- Skillful investment management during executor administration
- Efficient administration that minimizes costs for the estate
5. Complexity of the Estate
Complex estates warrant higher commission for the executor. The court considers complexity factors including:
- Multiple asset types in the deceased estate requiring specialist knowledge
- Business interests requiring ongoing management by the executor
- International assets or beneficiaries
- Trust structures or sophisticated estate planning
- Estate litigation or disputes requiring resolution
- Significant taxation and income tax implications
Professional Executor Considerations
Professional executors (such as solicitors or trustees) may be held to higher standards of skill and efficiency by the court, which can affect commission determinations. Courts may reduce commission where professionals perform below expected standards or where estate administration takes longer than necessary for an experienced executor.
Should an Executor Claim Commission?
Many executors, particularly family members who are also beneficiaries, choose not to claim executor's commission. This decision involves weighing financial, taxation, and relationship considerations.
Reasons an Executor Should Consider Claiming Commission
- Significant time investment - estate administration required substantial time away from work or personal activities
- Complex executor administration - you provided professional-level services worth compensation
- Personal expenses incurred as executor - you paid for travel, phone calls, or other costs
- Not a beneficiary - the executor receives no other benefit from the estate
- Equal treatment - professional executors would be paid for the same work
- Family agreement - beneficiaries acknowledge the executor's work deserves commission
Reasons an Executor Should Consider Waiving Commission
- Family harmony - claiming executor's commission might create resentment among beneficiaries
- Substantial inheritance - the executor is receiving a significant benefit as a beneficiary
- Taxation efficiency - your marginal income tax rate makes commission expensive after tax
- Simple estate - executor administration required minimal time and effort
- Emotional connection - the executor wants to honor the deceased by maximizing distributions
- Professional obligation - appointed as executor based on family relationship, not professional capacity
Taxation and Income Tax Considerations
Executor's commission is generally treated as assessable income by the Australian Taxation Office. This differs from inheritances received as a beneficiary, which are not subject to income tax.
Key taxation considerations for an executor include:
- Commission is added to your assessable income for the financial year received
- Your marginal income tax rate applies to the commission amount
- High income earners may pay up to 47% tax on executor's commission (including Medicare levy)
- Timing of payment affects which financial year the assessable income is assessed for taxation
- Deductions may be available for expenses incurred as executor in earning the commission
Example Tax Impact for an Executor
Sarah claims $25,000 executor's commission for administering her father's estate. She earns $150,000 annually in her regular employment. The commission is assessable income that pushes her further into the top tax bracket, resulting in approximately $11,750 in income tax (47% including Medicare levy). Sarah receives $13,250 net commission after taxation.
As a beneficiary, Sarah is also entitled to a $100,000 inheritance, which is not assessable income or subject to taxation. From a purely financial perspective considering income tax, Sarah might prefer to waive the executor's commission and receive her full inheritance tax-free.
How an Executor Can Claim Commission
An executor has several options for claiming commission, ranging from informal agreement with beneficiaries to formal court applications for commission granted by the Supreme Court.
1. Agreement with Beneficiaries
The simplest approach for an executor is reaching agreement with all adult beneficiaries on commission amount. This requires the executor to:
- Calculate the estate corpus
- Document work performed and time spent as executor
- Propose reasonable commission rates
- Obtain written consent from all beneficiaries for the commission
- Record the agreement in estate accounts
2. Will Authorization
Some wills expressly authorize executor remuneration. Common provisions an executor may encounter include:
- Specified percentage of the estate (e.g., "2% commission for the executor")
- Fixed dollar amount as commission
- Professional executor fees (for solicitor or trustee executors)
- Authorization for the executor to charge "reasonable remuneration"
Even with will authorization, an executor should still document their work and obtain beneficiary agreement where possible to avoid disputes.
3. Supreme Court Application
If beneficiaries dispute the executor's commission or the executor cannot reach agreement, you can apply to the Supreme Court for commission granted through a court order. This involves the executor:
- Filing an application with the Supreme Court with supporting affidavit
- Providing detailed accounts of estate administration
- Documenting time spent and work performed as executor
- Demonstrating the complexity and value of services provided
- Responding to any beneficiary objections in court
Court applications for commission granted are expensive and time-consuming. They're typically reserved by an executor for high-value estates or situations where beneficiaries unreasonably refuse reasonable commission.
Documentation to Support Commission Claims
Regardless of the claiming method, an executor should maintain thorough documentation:
- Time sheets recording hours spent by the executor on estate tasks
- Diary entries documenting key decisions and actions during executor administration
- Correspondence with beneficiaries, lawyers, and other professionals
- Receipts for expenses incurred by the executor
- Estate accounts showing all transactions
- Professional valuations and assessments
Best Practice Tips for an Executor
- Discuss commission early with beneficiaries to manage expectations
- Keep detailed records from the start of executor administration
- Be transparent about your work and time commitment as executor
- Consider obtaining independent legal advice on fair commission rates
- Document any exceptional circumstances that justify higher commission for the executor
Common Issues and Disputes Over Executor's Commission
Executor's commission can become contentious, particularly in estates with family tensions or beneficiaries who feel the executor's commission is excessive. Estate litigation over commission disputes can be costly for all parties.
Beneficiary Objections to Commission
Beneficiaries may object to an executor's commission claims for various reasons:
- Perception that executor administration was simple and didn't warrant payment
- Belief that the commission percentage claimed by the executor is too high
- Suspicion of self-dealing or conflicts of interest by the executor
- Resentment about delays in distribution during estate administration
- Inadequate communication from the executor about work performed
Resolving Disputes Without Court
Strategies for an executor addressing beneficiary concerns include:
- Providing detailed accounts showing work performed as executor
- Offering to reduce executor's commission in exchange for beneficiary approval
- Obtaining independent assessment of reasonable commission for the executor
- Engaging in mediation to reach compromise and avoid estate litigation
- Demonstrating market commission rates for professional executor services
Professional Executor Considerations
Professional executors (solicitors, accountants, trustees) face additional scrutiny in court. The court may reduce commission where the professional executor:
- Took unnecessarily long for estate administration
- Delegated work to unqualified staff while claiming full commission
- Charged executor's commission for routine tasks requiring minimal expertise
- Had conflicts of interest in their role as executor
- Performed work below professional standards expected of an executor
Executor Liability in Commission Disputes
An executor who claims excessive commission may face legal challenges from beneficiaries through estate litigation. The court can reduce commission amounts and, in extreme cases, order the executor to personally compensate the estate for overpayment. This underscores the importance of an executor claiming reasonable, well-documented commission.
Get Expert Assistance with Executor Administration
Whether you're an executor considering commission or a beneficiary concerned about executor remuneration, professional legal advice from wills and estates lawyers ensures fair outcomes and protects all parties.
Will and Estate Lawyers Australia assists both executors and beneficiaries with:
- Advice on reasonable executor's commission rates under Queensland law
- Review of commission calculations and supporting documentation
- Negotiation with beneficiaries or the executor regarding commission disputes
- Court applications for commission determination by the Supreme Court
- Complete probate and deceased estate administration services for executors
- Family provision applications and wills disputes
Our fixed-fee probate service ($825) provides an executor with professional support throughout estate administration, helping you understand your rights and obligations including commission entitlements under Queensland law.
Why Choose Will and Estate Lawyers for Executor Assistance?
- Fixed $825 probate fee - 45-55% below market rates for executor services
- Fast turnaround - average 8-10 weeks for an executor to obtain grants
- Expert guidance - experienced Queensland wills and estates lawyers
- Transparent service - no hidden costs or surprises for the executor
- Comprehensive support - from initial consultation to final distribution for estates
Frequently Asked Questions
Can joint executors both claim commission?
Yes, joint executors can both claim executor's commission. The total commission available (typically 1-3% of corpus) is divided between the executors based on their respective contributions to estate administration. The court considers the work each executor performed when determining individual commission entitlements.
If one executor did substantially more work during estate administration, they may receive a larger share of the total commission. Joint executors should document their respective contributions to support fair division of executor's commission.
Is executor's commission different from executor fees charged by lawyers?
Yes, these are separate concepts. Executor's commission is payment to the executor for administering the deceased estate. Legal fees are charged by solicitors for legal services provided to the estate, such as obtaining probate, preparing estate accounts, or providing legal advice to the executor.
When a solicitor acts as executor, they may be entitled to both legal fees (for legal work) and executor's commission (for administration work). However, the court scrutinizes such arrangements to ensure the solicitor-executor doesn't "double-charge" for the same work.
Can an executor claim commission if the will says they should act without payment?
If a will expressly states that the executor should serve without remuneration, the court generally upholds this provision. However, an executor may still apply to the Supreme Court seeking commission if they can demonstrate that circumstances justify payment despite the will's terms.
Circumstances that might justify commission for an executor despite will provisions include unexpected complexity in estate administration, administration taking much longer than anticipated, or the executor providing professional-level services that weren't contemplated when the will was made.
What happens if an executor claims excessive commission?
Beneficiaries can challenge excessive executor's commission by applying to the Supreme Court. If the court agrees the commission is excessive, it can reduce the amount to what it considers reasonable for the executor's work. In serious cases involving dishonesty or bad faith, the court may order the executor to repay the excess to the estate and potentially remove them as executor.
The court also has power to order the executor to pay legal costs if they claimed manifestly excessive commission without reasonable basis.
When should executor's commission be paid?
Commission is typically paid when estate administration is complete or substantially complete. This allows accurate calculation of the estate corpus and ensures the executor has performed the work justifying payment of commission.
For estates with lengthy administration periods, the court may approve interim commission payments based on work the executor has completed to date. However, final executor's commission is usually not determined until the corpus can be accurately calculated after all debts, expenses, and taxes are paid from the estate.
Can beneficiaries pay executor's commission privately instead of from the estate?
Yes, beneficiaries can agree to personally compensate an executor rather than paying commission from estate funds. This arrangement might be used when beneficiaries want to reward exceptional executor service while maximizing estate distributions, or when the executor has waived commission but beneficiaries want to provide recognition.
Such payments to the executor should be documented and may have gift tax implications for the beneficiaries making payment.
Does an executor need court approval to claim commission?
Court approval is not required if all adult beneficiaries agree to the executor's commission amount. Many executors successfully claim commission through beneficiary agreement without court involvement.
However, Supreme Court approval is necessary if: beneficiaries dispute the executor's commission claim, some beneficiaries are minors or under legal disability, the executor wants certainty about their entitlement, or beneficiaries cannot be located. Court approval provides the executor with protection against future challenges.
How is commission calculated when estate assets fluctuate in value?
Executor's commission is based on the final net value of the estate - the corpus available for distribution after all assets are realized and all debts paid. If asset values increase during estate administration (for example, property appreciates or investments grow), commission is calculated on the higher value.
Conversely, if values decrease during the executor's administration, commission is based on the lower realized value. This ensures the executor is compensated based on the actual value administered and distributed to beneficiaries from the deceased estate.