This is a question that concerns many will-makers. So, will your executor take control of your money after you die and grab handfuls of cash as they please?
Well, that is almost entirely up to you. You can leave a clause in your will that authorises your executor to receive payment for the services rendered, whether your executor is a professional or a member of your family. However, before doing so the will-maker must give their informed written consent allowing the executor to take a remuneration.
This is very common where you appoint a solicitor-executor. This is so your solicitor cannot take advantage of you and authorise that they be paid without your consent. However, you must know that a professional will not undertake the job without payment. And as the saying goes if you pay peanuts you get monkeys.
You should also bear in mind that just because you appoint someone in your will to be executor, they can decline the appointment. If you have no executor willing to do the job, then the administration of your estate gets a whole lot more complicated, and beneficiaries, interested persons and creditors may fight for the job, so that they can administer your estate to their advantage.
Therefore, you should nominate alternatives for the appointment of executor.
While many people do not wish to pay a professional to administer their estate, whether it be a solicitor or an accountant, you could be saving a lot of money and angst if you were to appoint a professional, especially if your estate could be challenged, has many complications, or your beneficiaries are likely to dispute the administration. It is important not to be penny wise and pound foolish.
So, what can you executor charge? When your executor is utilising the professional skills, they will charge the ordinary rates, if this is authorised by you in the will. If you have not authorised professional fees, then there will be entitled to receive a commission from the estate. The commission can range between 1% and 6% of the estate value depending on the degree of complexity in the administration of your estate.
If you have not provided for your executor to receive payment, they can receive a commission from the estate if they have a fully informed consent of all interested beneficiaries.
If your executor charges excessive fees the Supreme Court may review and vary the commissions and charges that are claimed. This review of charges can be brought by the court on their own motion or under the application of any creditor or beneficiary under the will or estate.
So, should you pay your executor?
Dealing with grieving relatives and possibly under acrimonious circumstances, or where your estate is fairly complicated or under challenge, it would be best to pay for the professional services. This will ensure that any dispute or issue is resolved quickly and efficiently, and that your estate will not be susceptible to challenge or mismanagement, which could cost your beneficiaries more in the long run.
As mentioned before the executor need not take up the appointment. And if you wish to have a professional appointed, then unfortunately you need to pay for the service as you would any other professional service.
Further if you refuse to pay your executors and no one wishes to undertake the job, then professional administrators, such as State Trustees, will be appointed by the court and the court will authorise their remuneration. Therefore, rather pay for the executor of your choice, and with the informed consent of the fees they are likely to charge, then potentially more expensive professional service.
The aforesaid is not legal advice and is only general in nature. Please obtain advice specific to your own circumstances, alternatively get in touch with the writer at http://hazelegal.com.au