Executor charging for estate administration

This is a common question and the answer depends on who the executor is and what the will says.

The general rule:

An executor who is not a professional is not entitled to charge for their time unless the will specifically authorises it. This is a long-standing principle of trust law, sometimes called the rule against trustees profiting from their position. An executor is a type of trustee for these purposes.

This means that a family member or friend appointed as executor is generally expected to act without payment for their time. They are, however, entitled to recover their reasonable out-of-pocket expenses from the estate, such as travel costs, postage, and similar disbursements.

When an executor can charge:

1. The will contains a charging clause. Many professionally drafted wills include a clause expressly permitting a named executor, particularly a solicitor or professional, to charge for their time at their usual professional rates. This is the most common basis for charging.

2. The executor is a professional and the will includes a charging clause. Section 29 of the Trustee Act 2000 also provides a statutory right for a trust corporation or a professional trustee (someone acting in a professional capacity) to receive reasonable remuneration, provided the other trustees agree in writing. This can apply even where the will is silent, but it does not apply to a sole executor acting alone unless they are a trust corporation.

3. All beneficiaries agree. If all beneficiaries are adults, have capacity, and are absolutely entitled to the estate, they can collectively agree to pay the executor for their services. This should be recorded in writing.

4. The court authorises payment. Under section 31 of the Trustee Act 2000, the court has power to authorise remuneration for a trustee or executor even where no charging clause exists. This is a discretionary power and would usually require some justification, for example where the administration has been unusually complex or burdensome.

Practical points:

Where a lay executor has done significant work and there is no charging clause, the most pragmatic route is to ask all the beneficiaries whether they would consent to a reasonable payment or gift from the estate in recognition of the work done. If everyone agrees and it is properly documented, this avoids any legal difficulty.

If the executor is a solicitor firm or professional will-writing company, it is worth checking the charging clause carefully. Some charging clauses are very broadly drafted and can result in surprisingly high fees. Beneficiaries are entitled to ask for a detailed breakdown of the charges and, if they consider the fees unreasonable, can apply to the court to have them assessed under section 71 of the Senior Courts Act 1981 (for solicitor executors) or challenge them on the basis that the charges are not reasonable.

Where no charging clause exists and the executor simply deducts payment from the estate without authority, this is technically a breach of fiduciary duty and the beneficiaries could require the executor to account for the sums taken.

Summary:

A lay executor generally cannot charge for their time unless the will permits it, the beneficiaries agree, or the court authorises it. A professional executor can usually charge if there is a charging clause or the statutory provisions under the Trustee Act 2000 apply. Out-of-pocket expenses are always recoverable regardless.