Getting Paid for Acting as Executor

The executor had expected paperwork. He had not expected the role to take over his evenings.

For nearly a year, he dealt with probate forms, an empty house, insurance inspections, bank closures, tax records, creditor questions and increasingly impatient beneficiaries. He took annual leave to attend property appointments and spent weekends sorting decades of possessions.

When the estate was nearly complete, he calculated that he had spent more than 250 hours on the administration.

He believed some payment was fair. The beneficiaries were less certain.

One pointed out that he had voluntarily accepted the role. Another said he could recover his expenses but not charge for his time. A third suggested paying him a percentage of the estate, even though nobody could explain where that percentage came from.

Executor fees in New Zealand are not governed by a simple rule stating that every executor receives a standard hourly rate or fixed percentage. The starting point is usually the will. If the will authorises remuneration, its wording must be followed. If it does not, an executor should not quietly award themselves a fee merely because the work became more demanding than expected.

Expense reimbursement, professional charges and executor remuneration are different kinds of payment. Understanding those differences is essential before any money leaves the estate.

## What Is an Executor Fee?

An executor fee is payment for the executor’s work, time, skill, responsibility or services in administering the estate.

It may compensate the executor for tasks such as:

– Applying for probate
– Identifying and collecting assets
– Managing property
– Communicating with beneficiaries
– Paying debts
– Dealing with tax
– Supervising professional advisers
– Managing a business temporarily
– Resolving disputes
– Preparing estate accounts
– Completing distributions

This payment is commonly described as remuneration, commission or compensation.

It is not the same as reimbursement.

If an executor personally pays a $300 locksmith invoice to secure the deceased’s home, repayment of that exact $300 is ordinarily reimbursement of an estate expense. If the executor also seeks $500 for the time spent arranging and supervising the locksmith, that additional payment is remuneration.

The two amounts need separate authority and accounting treatment.

## Start With the Will

The first place to look is the executor-remuneration or charging clause in the will.

New Zealand community legal guidance states that executors can be paid for their services where the will provides for payment. Professional executors commonly ask for a suitable charging arrangement to be included when the will is prepared. citeturn718550search1turn428567search2

A charging clause might authorise:

– A fixed payment
– Reasonable remuneration
– An hourly professional charge
– Fees according to the executor’s usual professional rates
– A percentage or commission
– Payment for specific categories of work
– A gift given in recognition of acting as executor

The exact words matter.

A clause allowing a lawyer-executor to charge normal professional fees may not authorise a non-lawyer co-executor to charge the same rates. A clause permitting reimbursement of expenses may not permit payment for time. A fixed legacy to the executor may be an ordinary gift rather than compensation, unless the will connects it expressly with the executor role.

Read the whole clause before calculating anything.

## A Charging Clause Is Not a Blank Cheque

Even where a will authorises payment, the executor should not assume that any amount is acceptable.

The executor remains responsible for administering the estate loyally and for proper purposes. A charging clause should be applied honestly, transparently and consistently with its wording.

Concerns can arise where an executor:

– Charges excessive hours
– Uses a rate unrelated to the authorised work
– Bills for tasks that were never completed
– Charges twice for the same service
– Includes time spent protecting a personal inheritance
– Bills for correcting their own avoidable mistakes
– Charges professional rates for routine clerical work
– Uses several people for work that one person could reasonably perform
– conceals the calculation from beneficiaries

The existence of authority answers the question, “May the executor be paid?” It does not always answer, “How much is reasonable?”

## Is There a Standard Executor Percentage in New Zealand?

There is no universal percentage automatically payable to every private executor.

An executor should be cautious about claims such as:

– “Executors always receive five percent.”
– “The normal fee is three percent of the estate.”
– “I can take one percent of every asset collected.”
– “The larger the estate, the larger my fee must be.”

A percentage may be authorised by a particular will, agreed properly or available under a statutory charging regime applying to a particular professional or trustee organisation. That does not create a general tariff for every family executor.

Trustee companies operate under specific legislation that permits reasonable fees and remuneration for services in administering estates and trusts. Those statutory arrangements should not be treated as an automatic fee scale for an individual relative acting privately. citeturn428567search9

Where the will does not state a percentage, an executor should not invent one simply because the estate is valuable.

Administering a straightforward $2 million estate may require less work than administering a disputed $400,000 estate containing a business, missing records and overseas property.

## How Can Executor Fees Be Calculated?

The appropriate method depends first on the will.

Common approaches include the following.

### Fixed amount

The will may state that the executor receives a particular sum for acting.

This provides certainty, but practical questions may arise if:

– Several executors are appointed
– One executor renounces
– One performs most of the work
– The estate is much more complex than expected
– The nominated amount becomes inadequate over time
– The fixed gift fails under another will provision

The executor should not increase the fixed amount unilaterally merely because the role became difficult.

### Hourly rate

The will may allow an executor, particularly a professional, to charge for time.

Accurate time records should show:

– Date
– Task
– Time spent
– Person performing the work
– Rate
– Why the work was necessary

Broad entries such as “estate administration, 40 hours” are less useful than a properly itemised record.

The rate should match the authority in the will and the nature of the work. Routine filing and property visits may not justify the same rate as specialised legal or tax advice.

### Professional charging rate

A will may permit an executor who acts in a professional capacity to charge their usual fees.

The invoice should distinguish:

– Professional work
– Ordinary executor administration
– External disbursements
– Staff work
– Executor remuneration
– Personal advice unrelated to the estate

A lawyer, accountant or other adviser should not charge a high professional rate for every minor administrative action merely because they hold a professional qualification.

### Percentage or commission

A will may expressly allow commission based on estate value, income, assets collected or another measure.

The calculation must follow the stated formula precisely.

Clarify whether the percentage applies to:

– Gross estate value
– Net estate value
– Capital collected
– Property sold
– Estate income
– Assets transferred without sale
– Overseas assets
– Jointly owned property
– Trust property

Ambiguous percentage clauses can produce very large differences and may require legal interpretation.

### Reasonable remuneration

Some wills authorise reasonable or proper remuneration without fixing a formula.

The executor must then assess an amount that can be defended objectively.

Relevant considerations may include:

– Time reasonably spent
– Complexity
– Responsibility assumed
– Skills required
– Estate value
– Risk
– Results achieved
– Whether professional help was also used
– Duplication between executors
– Delays or mistakes attributable to the executor
– Whether the work benefited the estate

“Reasonable” does not mean whatever the executor personally considers fair.

## Keep Time Records From the Beginning

An executor who might seek remuneration should maintain time records throughout the administration.

Do not attempt to reconstruct hundreds of hours from memory at the end.

A time ledger might contain:

| Date | Task | Time | Category |
|—|—|—:|—|
| 12 August | Meeting regarding probate documents | 1.2 hours | Court administration |
| 15 August | Estate property inventory | 3.5 hours | Asset protection |
| 19 August | Bank and investment correspondence | 1.8 hours | Asset collection |
| 26 August | Beneficiary update and responses | 1.1 hours | Communication |

The record should separate work that benefits the estate from activity undertaken personally as a beneficiary.

For example, time spent arguing that another claimant should receive less may serve the executor’s personal interest rather than the administration.

## Do Not Charge for Every Moment Connected With the Estate

The executor role can occupy mental space even when no identifiable task is being performed.

That does not mean the estate should be billed for:

– Thinking about the estate while driving
– General worry
– Family conversations unrelated to administration
– Time spent grieving
– Reading repeated messages already answered
– Correcting the executor’s own careless errors
– Work performed solely for personal convenience
– Learning basic skills through unnecessary research
– Social visits combined with estate tasks

Time should be necessary, productive and connected with the executor’s legal responsibilities.

An executor should also avoid billing for work that could reasonably have been completed more efficiently.

## Several Executors Must Avoid Duplicate Fees

Where two or more executors act, every person may contribute time. That does not automatically justify billing the estate several times for the same task.

Examples of duplication include:

– Three executors attending a routine bank appointment when one could have attended
– Each executor independently reviewing the same ordinary invoice
– Several people maintaining separate accounts
– Repeated internal discussions without a decision
– Multiple executors travelling unnecessarily to the same property

Some joint work is required. Major decisions may need collective review, and all proving executors may need to sign documents.

The fee calculation should distinguish necessary joint responsibility from avoidable duplication.

The executors should agree early on:

– Who records time
– Which tasks are chargeable
– What rates apply
– How duplicated work will be handled
– Whether an overall cap applies
– How the proposed fee will be approved

## Can an Executor Receive Both a Gift and a Fee?

Possibly.

An executor may also be a beneficiary. The will may leave that person an inheritance and separately authorise remuneration.

The critical question is what the will says.

A gift does not automatically replace an executor fee. Equally, an executor should not assume that a generous gift was intended as additional compensation unless the document supports that conclusion.

Where the will states that a gift is “in lieu of remuneration,” accepting the gift may affect the ability to claim further payment.

The executor should obtain advice before treating ambiguous wording as authority for both benefits.

## Reimburse Expenses Separately

Executor expenses should not be included in a broad fee figure.

Keep separate schedules for:

### Reimbursements

– Probate fee
– Death certificates
– Postage
– Travel
– Locksmith charges
– Insurance paid personally
– Other documented estate costs

### Remuneration

– Time
– Skill
– Responsibility
– Professional services
– Commission

This separation matters because reimbursement generally returns money the executor has already spent for the estate. Remuneration creates an additional benefit to the executor and may require closer scrutiny.

An executor should not mark up personal expenses or add an administration surcharge unless authorised.

## Beneficiary Agreement

Where a will does not clearly authorise payment, the adult beneficiaries may sometimes agree that the executor should receive remuneration.

Any agreement should be:

– Informed
– Voluntary
– Written
– Based on full disclosure
– Signed by every person whose entitlement is affected
– Clear about the amount or calculation
– Made after sufficient estate information is available

The executor should disclose:

– The proposed fee
– The work performed
– Hours and rates
– The will’s wording
– Expense reimbursements
– Professional fees already paid
– The effect on each beneficiary’s inheritance
– Any personal conflict

A beneficiary’s silence is not the same as consent.

Agreement may not solve the issue where:

– A beneficiary is under 18
– A beneficiary lacks capacity
– Someone cannot be located
– A testamentary trust is involved
– Future or contingent beneficiaries are affected
– The estate is insolvent
– Creditors remain unpaid
– A claim is unresolved

Those people’s rights cannot necessarily be reduced through an informal family arrangement.

## Do Not Pressure Beneficiaries

Executors control information and estate timing. That position must not be used to force fee approval.

Improper pressure might include:

– Refusing to distribute unless beneficiaries agree
– Threatening unnecessary delay
– Withholding estate accounts
– Suggesting that objecting beneficiaries will receive less
– Presenting the fee as legally required when it is not
– Asking beneficiaries to sign without supporting records
– Obtaining agreement before the amount is known

A beneficiary should have a genuine opportunity to obtain independent advice.

Consent produced through leverage may later be challenged.

## When Court Oversight May Be Needed

Court involvement may become appropriate where:

– The will authorises payment but the calculation is disputed
– The will is silent and beneficiary agreement is impossible
– A minor or incapable beneficiary is affected
– The proposed fee is substantial
– The executor and beneficiaries cannot agree
– The executor is also a trustee of a continuing testamentary trust
– A beneficiary alleges excessive charging
– The executor seeks protection before paying themselves
– Estate accounts require formal review

The court can examine the executor’s conduct, authority and accounts when determining whether a payment is proper.

Where the administration continues as a testamentary trust, the Trusts Act framework may also become relevant. Trustees have mandatory duties to know and follow the trust terms, act honestly and in good faith, and act for the benefit of beneficiaries or the trust’s permitted purpose. citeturn428567search0turn718550search32

An executor seeking court approval should expect to produce detailed evidence rather than a general statement that the role was difficult.

## What Evidence Will Support a Fee?

A well-supported remuneration claim may include:

– The will and charging clause
– Probate
– A description of the estate
– Asset and liability schedules
– Time records
– Hourly rates
– Professional invoices
– Work allocation between executors
– Evidence of complexity
– Details of disputes or unusual problems
– Results achieved
– Beneficiary correspondence
– Proposed fee calculation
– Expense-reimbursement schedule
– Final or interim estate accounts

The executor should also disclose any shortcomings that affected the work.

For example, if extra hours resulted from poor initial records maintained by the executor, the court or beneficiaries may question whether the estate should pay for correcting those mistakes.

## How Might Reasonableness Be Assessed?

There is no single mathematical test for every private estate.

A reviewing court or adviser may consider the complete administration, including:

### Work performed

What tasks did the executor actually complete?

### Time reasonably required

Were the hours proportionate to the work?

### Skill and expertise

Did the executor apply specialised knowledge that benefited the estate?

### Complexity

Were there overseas assets, tax issues, litigation, a business or difficult trust provisions?

### Responsibility and risk

Did the executor manage substantial property or unusually serious decisions?

### Estate value

Was the proposed payment proportionate to the estate and the work?

### Efficiency

Was the administration organised, or did avoidable delay increase the fee?

### Duplication

Were the same tasks charged by several executors or advisers?

### Benefit to the estate

Did the work preserve, collect or increase estate value?

### Conduct

Did the executor act transparently, loyally and without improper conflict?

A large estate does not automatically justify a large fee if the administration was simple and largely handled by paid professionals.

## Professional Fees and Executor Fees Can Overlap

Suppose a lawyer is both executor and the person providing legal services to the estate.

The estate may receive bills for:

– Applying for probate
– Selling land
– Advising on claims
– General administration
– Executor remuneration
– Staff work
– External disbursements

The charging structure should avoid double recovery.

A professional executor should identify whether each item is:

– Legal work
– Executor work
– Both
– An external cost
– A personal matter not payable by the estate

Beneficiaries should be able to understand why the service was necessary and why the rate applies.

The will’s charging clause may be central to determining what can be recovered.

## Executor Fees Can Have Tax Consequences

Remuneration received for services may have tax consequences for the executor.

It should not automatically be treated as a tax-free inheritance merely because the payment comes from an estate.

The appropriate treatment can depend on:

– Whether the executor acts professionally
– The nature of the payment
– Whether it is a fee, commission or gift
– The executor’s business activities
– Tax invoicing obligations
– The wording of the will
– The structure of the payment

The estate may also need to record the fee correctly in its accounts and tax work.

Obtain tax advice before finalising a substantial executor payment.

## When Should the Fee Be Paid?

The executor should avoid paying themselves too early.

Before remuneration is taken, the executor should generally know:

– The legal authority
– The total work performed
– The estate’s solvency
– Remaining tax and liabilities
– Beneficiary positions
– Whether the amount is disputed
– Whether court approval is needed
– Whether the administration is nearly complete

A fee paid early may need to be returned if the estate later proves insolvent or the amount is challenged successfully.

Payment near the completion of administration is often easier to justify because the full workload and financial position can be seen.

Where interim professional billing is authorised, every invoice should still be itemised and reviewed.

## Show the Fee in the Estate Accounts

Executor remuneration must not be hidden under vague categories such as:

– General administration
– Miscellaneous costs
– Family expenses
– Professional charges
– Adjustment

The accounts should state clearly:

| Payment Type | Amount |
|—|—:|
| Executor expense reimbursement | $1,480 |
| Legal fees | $6,250 |
| Accounting fees | $2,100 |
| Executor remuneration | $8,000 |

Where a percentage or hourly calculation applies, attach or provide the supporting schedule.

Transparency protects both beneficiaries and the executor.

## What Happens if an Executor Takes an Unauthorised Fee?

An unauthorised payment may be treated as improper use of estate property.

Possible consequences include:

– Repayment
– Interest
– Reduction of another entitlement
– Formal accounting
– Legal costs
– Removal from office
– Compensation for resulting loss
– Court scrutiny of the wider administration

The executor should not assume that being a beneficiary makes the problem harmless.

Taking $10,000 early may affect creditors, other beneficiaries, tax and claims even if the executor expects to inherit more than that amount later.

## A Safe Process for Claiming Executor Fees

### Read the will

Identify the precise authority and any limitations.

### Separate costs from remuneration

Prepare different schedules for expenses, professional fees and executor compensation.

### Keep time and work records

Record tasks contemporaneously.

### Calculate transparently

Use the method authorised by the will or proposed for informed approval.

### Check for conflicts

Acknowledge that the executor is deciding on a payment to themselves.

### Give beneficiaries full information

Provide the calculation, estate accounts and practical effect.

### Obtain consent where appropriate

Use informed written approval, recognising that not every beneficiary can legally consent.

### Seek court approval where needed

Do not make a high-risk self-payment when authority or reasonableness remains disputed.

### Record the payment

Show it clearly in the final estate accounts and consider tax treatment.

Executor remuneration should reward properly authorised work, not exploit control of the estate.

The strongest claim is not the one supported by the largest number of hours. It is the one that follows the will, reflects work that genuinely benefited the estate and can be explained openly to every person whose inheritance is reduced by it.

## Frequently Asked Questions

### 1. Are executors automatically paid in New Zealand?

No. A private executor does not automatically receive an hourly fee or percentage. Payment commonly depends on a charging clause in the will, properly informed beneficiary agreement or court approval.

### 2. Can an executor recover expenses without a charging clause?

Reasonable estate expenses personally paid by the executor can generally be reimbursed when they are necessary, properly documented and connected with administration. Reimbursement is different from payment for time.

### 3. Is there a standard executor commission?

There is no universal commission automatically applying to every private executor. A percentage may apply if the will or another valid authority provides for it.

### 4. How is reasonable executor remuneration calculated?

Relevant factors may include work performed, hours reasonably required, skill, complexity, responsibility, estate value, results, duplication, professional fees already charged and the executor’s conduct.

### 5. Can beneficiaries agree to pay the executor?

Adult beneficiaries may be able to give informed written consent where their interests are affected. Agreement may be insufficient where minors, incapable people, missing beneficiaries, creditors or future trust interests are involved.

### 6. Can a professional executor charge both professional fees and executor fees?

Potentially, if the will and charging arrangements permit it. The invoices must distinguish the services and avoid charging twice for the same work.

### 7. Can the court reduce an executor’s fee?

A disputed or excessive payment may be reviewed. The executor may need to justify the authority, calculation, hours, rates, necessity and benefit of the work.

### 8. Is an executor fee taxable?

It may be taxable remuneration rather than a tax-free inheritance. The treatment depends on the nature of the payment, the executor’s circumstances and the wording of the will, so tax advice may be required.