Throughout the eight years I have been writing these articles, I have come to realise that there are at least two topics that have to be covered repeatedly. The first is divorce, and running a close second is division of property after death. All issues surrounding these two topics generate a lot of debate, and it seems that they will continue to do so.
Let us take the issue of executor's commission as an example. I did a quick search and found 13 articles I have written on the topic. But because the questions keep coming (and I welcome them), I will write yet another article on executor's commission today.
Who is an executor?
He is the person appointed to administer the estate of a person who died leaving behind a will which names that person as the executor. He may sometimes be referred to as the personal representative of the estate; and his role is similar to that of an administrator appointed by the court to wind up the estate of a person who has died without leaving behind a will.
What is the role of the executor?
His job is to carry out the instructions in the will. One of the most important things he has to do is apply to the court for a grant of probate. His job is one which relies on him to honestly and diligently collect all assets belonging to the estate, pay the debts and distribute the estate to the beneficiaries of said estate, in accordance with the provisions of the will (if it is possible to do so). The job may be complicated and tedious, and he may have to either be the claimant or the defendant in court proceedings on behalf of the estate. The estate may also have substantial debts which make it impossible to carry out all of the deceased 's wishes.
Payment to the executor
According to Section 5 of The Trustees, Attorneys and Executors (Accounts and General) Act, an executor is entitled to receive a commission equivalent to six per cent of 'all payments made by him in respect of debts, liabilities, cost of management and other similar charges, and on all payments in respect of dividends, interests, rents, or other produce, or receipt of any estate or trust, and also on all property, real and personal, conveyed, assigned, or distributed by him ...' The prevailing view is that commission is not calculated on the value of real or other property which is transferred to beneficiaries in accordance with the provisions of the will, since no money changes hands.
This means that the executor must carry out his duties in order to be paid. However, there are many executors who do work, but waive the right to claim a commission. In other cases, a gift may be left to the executor under the will to compensate him for his troubles. If this is done, he may not be entitled to receive a commission.
It should be noted that, in most cases, at least two executors are appointed under a will. This does not mean that each one is entitled to claim a six per cent commission. Instead, if all executors carry out the job of administering the estate, they will share the six per cent commission. For example, each of two executors will receive a three per cent commission.
Executors are accountable to beneficiaries
An executor should also bear in mind that he has a legal responsibility to account to the beneficiaries and to the court for all of the estate's property that he collects and pays out or distributes. He must, therefore, be careful to ensure that he keeps accurate records and hires professionals (such an attorneys and accountants) to assist him to do his job.
Sherry Ann McGregor is a partner and mediator in the firm of Nunes, Scholefield, DeLeon & Co. Please send your comments and questions to firstname.lastname@example.org or email@example.com on twitter @lawsofeve.