EXECUTORS OF WILLS ENTITLED TO BE PAID?
Not as often as you think
If you’re chosen to be executor of a will, it helps to know when you’re entitled to payment. And if you prepare a will, and wish the executor to receive payment, you should make some provision for this through what is commonly called a “charging clause”.
Professionals with business, legal, accounting or financial skills are often asked to fill positions of trust for friends and clients, such as trustee or executor of a will. In general, an executor who is a professional is not entitled to charge for their services.
As executor, you are entitled to reimbursement for expenses but only to pay for your actions if allowed by the court, by a charging clause in a will, or if approved by the beneficiaries. The beneficiaries need to have decision-making capacity, be informed, and not have a conflict of interest.
Recent cases where fees were wrongly charged suggest a common lack of understanding of the options.
In one case, a will executor and accountant, who had been the deceased’s financial adviser for about 20 years, paid himself over $200,000 for his duties as executor of the estate, which had a gross value of approximately $2 million, claiming to do so under a charging clause in the deceased’s will. The sum was described by the judge as “an enormous amount of money for an executor to charge”.
In another case, a financial manager – the son-in-law of the deceased’s niece – was appointed by the Guardianship Tribunal to handle the estate and advised he would only charge out-of-pocket expenses. However, over a four-and-a-half-year period, his firm charged and received fees of over $200,000. The judge pointed out the principle “that a trustee must not profit from the trust”.
Higgins Lawyers can provide you with further advice on drafting and executing wills.