Estate Trustee Compensation: What Beneficiaries Can Challenge

You have seen the estate accounts, or heard what the executor plans to take, and the fee looks too high. You may have heard of a percentage rule of thumb and wonder whether the trustee has gone past it.

This article explains how a compensation concern fits into the Ontario court process. It does not give percentage figures, because those guidelines are not something this article can confirm; a lawyer can tell you what applies to your estate.

Who is paying the fee, and why it matters to you

An estate trustee winds up the deceased person's affairs, pays taxes, bills and debts, collects the assets and distributes what remains. How a particular trustee's payment is worked out, and whether the amount claimed is appropriate, depends on the facts of the estate and is worth confirming with a lawyer.

If you are a beneficiary, a fee concern is a legitimate thing to raise, because it affects what the estate ends up providing.

What a beneficiary can actually object to

Beneficiary objections to an estate trustee's accounts can include the trustee's entitlement to compensation and the reasonableness of the legal expenses the trustee incurred. So there are two separate questions: whether the trustee should be paid and how much, and whether the lawyers' bills charged to the estate were reasonable.

In one Court of Appeal case, these were trial issues, and a passing of accounts was consolidated with an application to remove the trustee. That shows fee disputes can sit alongside larger complaints, and that they may take real time to resolve.

How an objection reaches a judge

Ontario has no general duty to pass accounts. A trustee is generally required to account when compelled by the court at the instance of, or on behalf of, a person interested in the property. This is how a beneficiary forces a formal review.

In a passing of accounts, the estate trustee is the applicant under Rule 74.18, and a beneficiary who files a notice of objection is responding to that application. A person with a contingent or vested interest may file the notice of objection.

Be specific. The only issues the court decides are those raised in the notices of objection. If your concern is the fee, your notice should say so, and should say whether you are also questioning legal expenses.

What about the percentage guidelines?

You may have read that there is a standard percentage, or a list of factors, that decides what a fair fee looks like. How those guidelines apply to a particular trustee and estate depends on the facts. This article does not set out figures, and you should not rely on a number you found online without having a lawyer confirm it.

What you can do now is gather the facts about how the estate was handled, so you and a lawyer can talk through your concern. Useful details include the following.

• The size and make-up of the estate: cash, a house, investments, a business.
• How complicated the administration was.
• Whether the trustee used lawyers or accountants and what was paid to them.
• How long the work took and whether delays were the trustee's fault.
• Whether you received regular, honest updates.

What to do next

Only beneficiaries benefit from a successful objection, and a person with no financial interest in the estate may lack standing to pursue objections. So first confirm that you have a real interest, then collect the information.

• Ask the trustee in writing for the accounts and for a breakdown of any compensation they plan to take or have taken.
• Ask for copies of legal invoices charged to the estate.
• Write down exactly what you think is unreasonable and why.
• Keep a timeline of communications and delays.
• Speak with an Ontario estate litigation lawyer before filing a notice of objection, so you understand cost and risk against the amount at stake.

Sometimes a conversation, with the facts laid out calmly, leads the trustee to reduce a fee without court. If it does not, a lawyer can explain the formal route.

Frequently asked questions