Compensation for the Executor of a Will

Acting as an executor (or estate trustee) can be hard work deserving of compensation. In Ontario, executor compensation is evaluated based on several factors, unless compensation is dealt with by the language in the Will.  To determine the amount of compensation and before taking any compensation, an executor should turn to the applicable Will to see what it provides.

How is Executor Compensation Calculated?

One might think that there is a pre-determined value or normal compensation for an executor of a Will. However, if there is no amount or formula for compensation detailed in an applicable Will, an executor is entitled to “fair and reasonable” compensation.  Generally, an Ontario executor is entitled to compensation in the range of 2.5% of all money or assets that come into an estate and 2.5% of money and assets that leave an estate, but this is not guaranteed.  This does not always mean 5% of the total value of the estate.  The court may also award a “care and management fee” in the range of 0.4% on the average annual value of an estate’s assets.  

The Court will consider the following five factors to determine if an executor of an estate is entitled to compensation, as well as its total value:

1. the magnitude of the estate or trust;
2. the care, responsibility and risks assumed by the executor or trustee; 
3. the time spent by the executor or trustee in carrying out their responsibilities;
4. the skill and ability required and displayed by the executor or trustee; and
5. the results obtained and degree of success associated with the efforts of the executor or trustee.

What is Pre-taking Executor Compensation?

Pre-taking occurs when an executor takes compensation before they secure an agreement or release from all beneficiaries of an estate and before a court approves that compensation.  Children cannot provide consent to compensation or sign a release. 

If an executor pre-takes without specific authorization to do so in the applicable Will, the pre-taking is likely improper.  Even if authorized by the Will to pre-take, an executor should still be careful.  The right to pre-take compensation is not the same as the right to keep that compensation.  The Court can still adjust compensation and the executor may be ordered to return funds if the amount pre-taken is more than the compensation awarded.  Written another way, an executor may accidentally take too much and owe the estate money back.

Other Factors when Determining Compensation for Executors

Multiple Executors

When an estate has more than one executor, there is a general presumption that compensation will be shared equally among them. This means each executor is entitled to an equal portion of the total compensation, regardless of the specific tasks each person performed, unless otherwise agreed upon or ordered by the court. However, if one executor takes on significantly more responsibility or workload than the others, it may be possible to adjust their compensation accordingly, provided there is justification and agreement among the parties involved.

Passing of Accounts – The Court Process to Determine the Value of Compensation

A passing of accounts is the Court process to pass judgment on the transactions made by an executor.  The purpose of passing accounts is to have the Court approve or reject transactions made by an executor, but also to award or disallow executor compensation.  Beneficiaries have the opportunity to dispute transactions and the compensation claimed by the executor.  Learn more about passing accounts on our litigation website.

When to Work with a Lawyer for Executor Compensation

Arguably, three of the five factors used to determine compensation are based on the performance of the executor.  The better an executor administers an estate, the stronger their claim to compensation.  It may be in the executor’s best interest to work with a lawyer to ensure that their compensation is earned by a great performance and that the amount sought is claimed properly.

Why work with a lawyer?

• Estate lawyers can help executors avoid costly mistakes; and 
• Executors’ reasonable legal fees are paid directly by the estate.

Work with Katzman Estate Law for Executor Compensation Support

Katzman Estate Law: 

• We only practice estate law; we do not dabble in other areas of the law.
• We routinely handle passing of accounts matters and claims for executor compensation. 
• We represent both individuals and trust companies. 
• We have offices in Toronto, Windsor, Chatham, and Sarnia, though in-person meetings are typically unnecessary. 
• We are also estate litigators who regularly argue estate matters in the Ontario Superior Court of Justice.
• We do not charge for initial consultations and present a plan to you before you are asked for a retainer. 

Call 416-616-4242 or 519-256-7130 for a conversation with a Katzman Estate Law lawyer.  We provide free phone consultations and can assist anyone with an Ontario probate matter.  We keep our clients informed with respect to where they are in the probate process, what the next step is, and what their obligations are.  Before committing to a retainer, we want potential clients to call, test our knowledge, and feel comfortable with us.  We want our clients to see first-hand what makes us different.