Can Legal Fees Be Paid From the Estate in British Columbia?

If you are an executor or administrator in British Columbia, you may wonder whether the estate can cover a lawyer's bill, or whether it comes out of your own pocket. The answer is often that the estate can pay, but there are conditions, and the paperwork matters.

This article explains how legal fees and other administration costs are generally handled. It does not cover your own compensation as executor, which is a separate question. Your situation may turn on details, so a lawyer can confirm how this applies to you.

This article covers the law of British Columbia.

The general rule: approval is needed

The BC government says legal fees may be paid from the estate, but those payments must be approved by the court or by the heirs. In practice, that means you should not simply pay a legal bill from estate funds and hope no one asks questions. How approval affects you later depends on your situation, so it is worth confirming with a lawyer.

The same government source says no lawyer is needed to apply for a grant of probate or administration, and an application can be made at any BC Supreme Court registry. Whether to hire a lawyer is therefore a decision about how complex the estate is and how comfortable you are with the process.

What counts as an administration cost

The Wills, Estates and Succession Act lists reasonable funeral and administration expenses, and legal expenses incurred in administering the estate, in the priority order that applies when an estate is insolvent. That shows the law treats these as proper costs of running an estate, as long as they are reasonable.

Executor remuneration is separate from administration costs: under the Trustee Act, it is allowed when the accounts are passed, in addition to other allowances for expenses actually incurred. Remuneration for the executor is a different topic and is not covered in detail here, but note that these Trustee Act provisions do not apply where the allowance is set by the instrument creating the trust, for example a will that fixes the executor's compensation.

• Legal fees for administering the estate, if approved by the heirs or the court
• Reasonable funeral and administration expenses
• The probate fee, which you pay on behalf of the estate

The probate fee and your personal liability

The probate fee must be paid to the government before the grant issues. The personal representative pays it on behalf of the estate, but only in a representative capacity, not personally. So the fee is an estate cost, not a personal one.

The registrar issues the estate grant once all fees payable in relation to the filing, including all applicable probate fees, have been paid. No probate fee is payable under the Probate Fee Act if the value of the estate does not exceed $25 000.

Keep that distinction in mind with other costs too. Keep estate money and your own money separate, and note in your records that each payment was made for the estate.

If beneficiaries object or you are unsure

A personal representative or a person interested in the estate may apply to the court to pass accounts, and the court may decide any matter relating to the accounts. An affidavit in Form P38 or a statement of account in Form P40 is filed. Costs on these applications are assessed as special costs unless the court orders otherwise.

If you are unsure how to handle an administration question, an executor or administrator may petition the court for advice or direction under Trustee Act s. 86, and the costs of that application are in the court's discretion.

What to do next

• Keep every invoice and receipt for estate expenses.
• Ask the lawyer for a clear account of fees before paying.
• Make sure legal fees have been approved by the court or by the heirs before paying them from the estate.
• Pay estate costs from estate money and keep it separate from your own funds.
• If a beneficiary raises a concern, talk to a lawyer about whether to pass accounts or seek direction from the court.

If the estate is large, contested or possibly insolvent, getting advice early is usually worth it. How these rules apply depends on your situation, so it is worth confirming with a lawyer.

Frequently asked questions