If you’ve been named as an Estate Trustee (formerly known as an executor), you may be wondering whether you’re entitled to compensation for the time and effort involved in administering an estate.
The short answer is yes. In many cases, an Estate Trustee in Ontario is entitled to reasonable compensation. However, the amount is not automatic, and there are important rules that determine how compensation is calculated and approved.
What Does an Estate Trustee Do?
Administering an estate often involves far more work than people expect. Depending on the complexity of the estate, an Estate Trustee may be responsible for:
- Locating and safeguarding assets
- Applying for probate, if required
- Paying debts and taxes
- Communicating with beneficiaries
- Selling real estate or other assets
- Maintaining detailed financial records
- Distributing the estate according to the Will
Some estates can be completed within a few months, while others take a year or longer to administer.
Is There a Standard Fee?
Ontario law does not set a fixed fee for Estate Trustees.
Instead, compensation must be reasonable based on the work performed.
Historically, many Estate Trustees and legal professionals have used a guideline of approximately 5% of the value of the estate as a starting point. However, this is not a legal entitlement or guaranteed amount.
The appropriate compensation depends on the circumstances of each estate.
How Is Compensation Determined?
Several factors may be considered when determining reasonable compensation, including:
- The size and value of the estate
- The complexity of the administration
- The amount of time spent managing the estate
- The level of responsibility involved
- The skill and care demonstrated by the Estate Trustee
- The results achieved during the administration
For example, administering an estate that includes multiple properties, business interests, or ongoing litigation will generally require more work than administering a simple estate with a single bank account.
Does the Will Decide?
Sometimes.
A Will may include a clause that specifies how much the Estate Trustee should be paid or whether they are to receive any compensation at all. If the Will contains valid instructions regarding compensation, those instructions will generally guide the process.
If the Will is silent, compensation must be determined based on Ontario law and the circumstances of the estate.
Can Beneficiaries Object?
Yes.
Beneficiaries are entitled to review the Estate Trustee’s accounts and may object if they believe the requested compensation is excessive.
If everyone agrees on the compensation, the matter can often be resolved without involving the court.
However, if there is a dispute, the court may be asked to determine what amount is fair.
This is one reason why maintaining accurate records throughout the estate administration process is so important.
Should You Pay Yourself Before the Estate Is Finished?
No.
An Estate Trustee should not assume they are entitled to take compensation from the estate before the administration is complete. Taking compensation prematurely, or without proper approval, can create disputes with beneficiaries and may expose the Estate Trustee to personal liability.
Before paying yourself, it is often advisable to obtain legal advice to ensure the compensation is appropriate and properly documented.
What If You’re Also a Beneficiary?
It is common for an Estate Trustee to also be a beneficiary of the estate.
Being a beneficiary does not automatically prevent you from receiving compensation for acting as Estate Trustee. However, if the Will specifically addresses compensation or beneficiaries agree to different arrangements, those factors may affect what compensation is appropriate.
Why Legal Advice Can Help
Questions about Estate Trustee compensation often arise because every estate is different. A mistake in calculating or paying compensation can lead to disagreements with beneficiaries, delays in administering the estate, or even court proceedings.
An estate lawyer can help you understand your responsibilities, determine whether compensation is appropriate, and ensure the estate is administered in accordance with Ontario law.
Need Guidance as an Estate Trustee
Acting as an Estate Trustee is an important legal responsibility, and compensation is only one part of the role. If you’ve been appointed as an Estate Trustee in Ottawa or elsewhere in Ontario, our experienced estate lawyers can help you navigate every stage of the estate administration process.
Whether you have questions about probate, Estate Trustee duties, beneficiary disputes, or compensation, we’re here to provide practical legal advice and help you administer the estate with confidence.
Contact Delaney’s Law Firm today to schedule a consultation.
The content on this post is for information purposes only and is not legal advice, which cannot be given without knowing the facts of a specific situation. You should never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. The use of the website does not establish a solicitor and client relationship.