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

As an executor in British Columbia, you may wonder whether you must cover the lawyer's bill, court costs and your own time out of pocket. In general, costs of administering an estate are meant to be paid from the estate, but the rules about approval and review matter.

This article explains what can be paid from the estate, how executor compensation works, and how the court can step in. It is general information, and a lawyer can tell you how it applies to your estate.

This article covers the law of British Columbia.

Legal fees and the estate

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. It also 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.

Approval is the key idea. Before you pay a large legal account from estate money, get the beneficiaries' written agreement if you can, or be ready to have the court look at it. If you are unsure whether a particular payment has the approval it needs, it is worth confirming with a lawyer before you make it.

Other costs of administration

Reasonable funeral and administration expenses and legal expenses incurred in administering the estate are listed in the priority order for an insolvent estate. That matters when the estate may not have enough to pay everyone, because it affects who is paid first.

The probate fee is a separate cost. You pay it on behalf of the estate and only in your representative capacity, not personally.

Compensation for the executor

An executor or administrator is entitled to a fair and reasonable allowance for care, pains and trouble and time spent, not exceeding 5% of the gross aggregate value (capital and income) of all the estate's assets. The allowance is made by the Supreme Court, or by a registrar if directed by the court.

Remuneration is allowed when the accounts are passed, in addition to other allowances for expenses actually incurred. The court can also settle the amount of compensation on application.

There is an exception. These 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. Read the will before you assume the 5% ceiling is the starting point.

What the court can review

A personal representative or a person interested in the estate may apply to pass accounts or to fix the personal representative's remuneration. The court may decide any matter relating to the accounts or remuneration, and 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 proceed, an executor or administrator may also petition the court for advice or direction on administration questions, and the costs of that application are in the court's discretion.

What to do next

• Keep every invoice, receipt and a log of your time.
• Check whether the will fixes your compensation.
• Share the accounts with beneficiaries and ask for written approval of large payments.
• Before paying legal fees from the estate, make sure the court or the heirs have approved them, and keep a record of each payment.
• Ask a lawyer about passing accounts if beneficiaries disagree.

If there is a dispute about fees, early advice from a lawyer can help you decide whether to seek agreement or ask the court to decide. Keep in mind that the probate fee must be paid to the government before the grant issues.

Frequently asked questions