Hypotheticals by Manny Wood. Published in the Coffs Coast Advocate on 4 March 2017.
Gary passes away leaving a will that appoints his friend Raymond as his executor. Gary’s will leaves the whole of his estate equally to his three children.
Gary’s estate consists solely of a house valued at $500,000. For Raymond to sell the house and distribute the proceeds to Gary’s children, it is necessary for him to obtain a grant of probate.
A grant of probate is made by the Supreme Court of New South Wales essentially “proving the will”. It is recognition by the court that the will is valid and gives the executor authority to administer the estate.
The legal costs of obtaining a grant in New South Wales are regulated and in this case total $3,558 plus a filing fee of $1,493. There are additional legal costs and disbursements for work done above and beyond obtaining the grant. These costs are not regulated and in this case total around $1,000.
Conveyancing costs and real estate agent commission are other expenses that are incurred by the estate.
Before distributing the net proceeds from the sale of the house, Raymond decides that he is going to pay himself $20,000 for acting as executor.
Raymond informs the children, who do not agree with his proposed fee.
Normally, acting as executor is a gratuitous role. If however, an executor does wish to receive payment for their “pains and troubles”, they must apply to the Supreme Court for “commission” if the beneficiaries are not willing to consent.
After obtaining legal advice, the children offer Gary the sum of $7,000 by way of payment for fulfilling his executorial duties. Gary ultimately accepts this amount, avoiding the costs involved in applying to the court.
If you would like Manny to address a particular legal issue, send your request to manny.wood@ticliblaxland.com.au or call him on (02) 6648 7487.
