- Ontario courts have long recognized that an estate trustee's compensation can have more than one component: 1.
- The care and management fee exists because some estates aren't quick in-and-out affairs.
- Where a care and management fee applies, it's typically assessed with reference to the average value of the assets under the trustee's management over the relevant period — rewarding the…
Most people who've heard anything about executor compensation in Ontario have heard some version of "executors get a percentage of the estate." What's talked about far less is the care and management fee — a separate piece of compensation that can apply when an estate trustee has to actively manage estate assets, sometimes for years, rather than simply collect and distribute them quickly.
Understanding that there are two different components to compensation — not just one flat number — matters both for executors deciding what to claim and for beneficiaries trying to understand a bill they've been shown.
Two Different Pieces of Compensation
Ontario courts have long recognized that an estate trustee's compensation can have more than one component:
- A percentage-style allowance tied to the receipts and disbursements the trustee handles — money coming into and going out of the estate.
- A care and management fee for the ongoing work of managing estate assets over time, separate from simply moving money in and out.
Neither piece is fixed by statute at a set rate. The Trustee Act only guarantees an estate trustee a "fair and reasonable allowance" as approved by the court, or as set out in the will. Courts have developed guideline benchmarks over time, but a benchmark is not the same as an entitlement, and any figures you see referenced elsewhere should be confirmed with a lawyer rather than assumed.
What the Care and Management Fee Is Meant to Cover
The care and management fee exists because some estates aren't quick in-and-out affairs. An estate trustee might need to:
- Continue managing a rental property or investment portfolio for an extended period
- Oversee a business interest until it can be sold or wound up
- Hold and invest funds for a minor beneficiary until they reach a specified age
- Deal with an ongoing dispute or litigation that delays final distribution
In these situations, a one-time allowance based only on money moving in and out doesn't reflect the year-over-year work of actively looking after assets that are still sitting in the estate. The care and management fee is meant to compensate for that ongoing responsibility.
How It's Generally Calculated
Where a care and management fee applies, it's typically assessed with reference to the average value of the assets under the trustee's management over the relevant period — rewarding the ongoing job of managing assets, not just the one-time job of moving them. As with the main compensation allowance, there's no fixed rate set out in the Trustee Act itself, and any percentage you see referenced elsewhere should be treated as a starting point for discussion with a lawyer, not a guaranteed number.
When Courts Are More or Less Likely to Award It
A care and management fee is more clearly justified where an estate trustee genuinely had to manage assets over an extended stretch of time — not simply where an estate took a while to close for administrative reasons. A short delay while paperwork is processed is different from years of actively managing a rental property or investment account. Courts assessing compensation on a passing of accounts look at the real nature of the work performed, not just how long the file stayed open.
A Common Misconception Worth Correcting
Because percentage figures circulate informally among executors and in some published guides, it's easy to assume there's a fixed, government-set rate for either the main allowance or the care and management fee. There isn't. The Trustee Act sets a standard — "fair and reasonable" — not a formula, and the final number in any estate depends on the court's assessment, a will provision, or beneficiary agreement, rather than a rate you can look up and apply yourself.
Frequently asked questions
Does every estate trustee get a care and management fee?
No. It only applies where the trustee actually had ongoing management responsibilities for estate assets over time — a simple estate that's wound up quickly typically wouldn't generate this component at all.
Can beneficiaries object to a care and management fee?
Yes. Like the main compensation allowance, a claimed care and management fee can be challenged by beneficiaries, including through a passing of accounts, if they think it doesn't reflect real work performed.
Is the care and management fee paid every year, or once at the end?
It's generally assessed and approved as part of the overall compensation process, which can happen periodically during a long estate or all at once when the estate is finally wound up, depending on the circumstances.
Where does a specific percentage rate come from if it's not in the statute?
Any rate you encounter is typically drawn from judicial guidelines developed over time in reported decisions, not the Trustee Act itself — which is exactly why it should be confirmed with a lawyer for your specific estate rather than treated as a fixed rule.
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