Does an executor have to be paid in Ontario, and can they waive compensation?
Yes, an executor in Ontario is entitled to a fair and reasonable allowance for the care, pains, trouble and time spent on the estate, as allowed by a judge of the Superior Court of Justice. The amount can be settled even if the estate is not before the court in an action. If the will itself fixes the allowance, that section does not apply.
Whether you take compensation is a decision to think through with the other beneficiaries, especially if you are one of them. If you do take it, it is taxable: CRA treats executor fees as business income if you act in the role in the course of a business, and otherwise as income from employment or office. If you want to be paid before the accounts are passed, you generally need the agreement of everyone with an interest who is sui juris, court approval, or a will that allows it.
If you are paid early and the court later approves less, the difference can be ordered repaid. Whether waiving makes sense for your family depends on the facts, so confirm the tax and family consequences with a lawyer or an accountant.
Key takeaways
- An estate trustee is entitled to a fair and reasonable allowance for the care, pains, trouble and time spent on the estate, as allowed by a judge of the Superior Court of Justice.
- If the will fixes the allowance, the Trustee Act rule on fair and reasonable compensation does not apply.
- Executor fees are taxable, as business income or as income from employment or office, depending on how you act in the role.
- Taking payment before accounts are passed generally needs the agreement of all interested persons who are sui juris, court approval, or permission in the will.