How Can a Beneficiary Challenge an Executor's Fees in BC?

You may have a feeling that the executor of an estate is paying themselves too much. Executors in British Columbia are generally allowed to be paid for their work, but the amount is not unlimited, and beneficiaries are not left without options.

This article focuses on the dispute process: what the Trustee Act says about the limit, how you can ask the court to look at the fee, when the will itself changes the picture, and how the accounts process can bring fees into view.

This article covers the law of British Columbia.

What the Trustee Act allows an executor to take

An executor or trustee may be allowed a fair and reasonable allowance that does not exceed 5% of the gross aggregate value of the estate. The word "allowance" matters: the law does not give the executor an automatic 5%. It sets a ceiling on what can be fair and reasonable.

Separately, the Act also allows an annual care and management fee, which is capped as a percentage of the average value of the assets. Whether a particular charge is justified depends on your situation, so it is worth asking the executor how each amount was calculated. If you still have concerns, the court can settle the amount of the compensation on application, even if the estate is not otherwise before the court.

Asking the court to settle the fee

On application, the court may settle the amount of the compensation, or direct the registrar to settle it, even if the estate is not otherwise before the court. This is the main way a beneficiary tests an executor's pay. You do not need to wait for some other court case to be underway.

Before applying, it usually helps to write to the executor, ask for a breakdown of what has been taken or is planned, and keep copies of the replies. Court steps have their own rules and forms, so a lawyer can explain how to start the application and what evidence will be needed.

When the will sets the fee

There is an important exception. The Trustee Act provisions on allowances and on settling compensation do not apply where the allowance is set by the instrument creating the trust, such as the will. If your will-maker wrote a specific fee or method of payment into the will, the dispute may turn on the wording of the will rather than on the 5% limit.

• Read the will carefully for any clause about executor pay.
• Note whether it sets an amount, a method, or says nothing at all.
• If the wording is unclear, get legal advice on how it applies.

Fees and the passing of accounts

An executor must prepare accounts showing the estate's assets, receipts, disbursements and distribution, and must get the court's approval of those accounts. Accounts are one part of an executor's duties, and how they apply to the executor's own pay depends on your situation, so it is worth confirming with a lawyer. A beneficiary who wants to test the executor's pay can apply to the court to have the compensation settled.

The section has exceptions and the notice steps have specific requirements, so check the full text of section 99 of the Trustee Act, or ask a lawyer, before relying on these timelines. How the rules apply to a particular executor's fee depends on your situation, so it is worth confirming with a lawyer.

Practical next steps

• Ask the executor in writing for a breakdown of fees and how they were calculated.
• Check the will for any clause that sets the executor's pay.
• Consider serving notice requiring annual accounts if you have not received any.
• Keep records of all communication and any accounts you receive.
• Speak with a lawyer about applying to settle the compensation, and watch limitation periods.

Time limits can apply to court claims. In general, a court proceeding must not be started more than 2 years after the day the claim is discovered. Trust claims have special rules, so get advice early rather than waiting.

Frequently asked questions