Can an executor charge a fee?


1st December 2021

When can an executor who is engaged in business rely upon a professional charging clause in a Will?

If you are appointed an executor/trustee by a Will, the general rule is that you will not be entitled to be paid for the time you spend in administering the estate. You can however recover your reasonable expenses.

There is an exception to this where the Will or trust instrument includes a “charging clause” which permits an executor / trustee who is engaged in a profession or business to charge for their services incurred in connection with the administration of the estate. Generally this is included to permit a solicitor or an accountant appointed as a professional executor or trustee to charge for their services.

In the recent case of Da Silva v Heselton (and Others) [2021] EWHC 3079 (CH) the question arose as to whether an executor who is engaged in a profession or business unrelated to the administration of trusts or estates can rely upon a common form of professional charging clause to charge for their time spent on the administration of the estate.

Facts

The deceased left a Will which appointed SH as one of her executors/trustees. SH made an application (when she was replaced as an executor) to recover her charges for her work in relation to administering the estate at the rate of £300 per month. She charged the estate the total sum of £43,350. The replacement executor made an application to the Court to determine whether SH was entitled to recover her charges.

The Will contained a charging clause in terms:

MY TRUSTEES shall have the following powers in addition to their powers under the general law or under any other provision of this Will or any Codicil hereto . . .

(g) for any of my Trustees who shall be engaged in any profession or business to charge and be paid . . . all usual professional and other fees and to retain any brokerage or commission for work or business introduced, transacted or done or time spent by him or his firm in connection with the administration of my estate or the trust powers or provisions of this Will or any codicil hereto including work or business outside the ordinary course of his profession and work or business which he could or should have done personally had he not been in any profession or business.

SH argued that she was engaged in various businesses of a commercial nature,albeit not related to the matter of estate administration, and therefore she was entitled under the charging clause to charge for her time.

The Deputy Master who heard the application held that whilst the charging clause was not restricted to a trustee who pursues a profession such as a solicitor or an accountant but on its terms can extend to a person engaged in a business, the business has to have some relevance to the matter of administering estates and the administration time charged for should be part and parcel of that business.

SH appealed this decision. Her appeal was dismissed. On appeal the Deputy Judge held that there had to be a link between the scope of the profession or business in question and the work which the executor/trustee has carried out in connection with the administration of the estate and in respect of which he is seeking to charge.

The first hurdle to overcome is for the executor/trustee to demonstrate that the work in question is such that it would attract a “usual professional or other fee” from someone who is engaged in their profession or business. If this provision can be satisfied then providing the work done falls within the type of work carried out by the trustee in their professional business they may charge for it even if when carrying out the work in question, they are acting personally or otherwise not within the ordinary course of their business.

Conclusion

There has to be a link between the business conducted by the executor/trustee and the type of work required in relation to the administration of the estate to permit the executor/trustee to rely upon a charging clause to charge for their professional services.

For further advice on this issue please contact Stephanie Walls or Olivia Shenton-Taylor.

If you need legal advice for contentious trusts and probate

Speak to one of our specialist lawyers

Arrange a call

Enjoy That? You Might Like These:


articles

14 January -
This decision by the High Court confirms the interaction (or lack of it) between standstill periods and limitation periods in relation to the Public Contracts Regulations 2015 (PCR 2015). Parties... Read More

case-studies

4 January -
Long have we been aware of the principle of Caveat Emptor meaning buyer beware. However, perhaps the lesser known principle "Caveat Venditor", seller beware, will become more prominent after the... Read More

articles

22 December -
As we near the end of 2021, legal practitioners (particularly litigators) and clients alike will mull on the changes to litigation brought on by the pandemic, including the switch to... Read More