Can an Executor Be Paid Back for Lawyer and Accountant Costs in Ontario?
Often, yes, as long as the cost is properly incurred in running the estate, and paying for professional help is separate from the executor's own compensation. Under the Trustee Act, if a trustee is of the opinion that an expense would be properly incurred in carrying out the trust, the trustee may pay it directly from the trust property, or pay it personally and then recover it from the trust property.
An executor is also entitled to a fair and reasonable allowance for their care, pains, trouble and time spent on the estate, as allowed by a judge of the Superior Court of Justice. Compensation can be settled even when the estate is not before the court in an action, and a judge passing the executor's accounts may allow a fair and reasonable allowance. Where a lawyer is the executor and provides necessary professional services to the estate, the allowance is increased by an amount considered fair and reasonable for those services.
Keep accurate records of the estate's assets and transactions, because beneficiaries can object to the accounts or to the compensation claimed when accounts are passed. Whether a particular professional cost is reasonable depends on the facts, so confirm it with a lawyer or accountant.
Key takeaways
- A trustee who believes an expense is properly incurred in carrying out the trust may pay it from trust property, or pay it personally and recover it later.
- An executor's own compensation is a separate fair and reasonable allowance for care, pains, trouble and time, as allowed by a judge.
- Where a lawyer is the executor and provides necessary professional services, the allowance is increased by a fair and reasonable amount for those services.
- Accurate records matter, because beneficiaries can object to the accounts or the compensation claimed when accounts are passed.