Estate Trustee Compensation in Ontario: How Much Can They Take?

Many people ask what an executor can charge. If you are the executor, you want to be paid fairly for real work. If you are a beneficiary, you want to be sure the estate is not paying more than it should.

Ontario law does not set a single fixed fee. It sets a standard, and the court has the final say. This article explains how that works, when a trustee can pay themselves, and how beneficiaries can object.

The legal standard

The Trustee Act entitles a trustee, guardian or personal representative to a fair and reasonable allowance for care, pains and trouble and for time spent on the estate, as a judge allows. A judge may fix an estate trustee's compensation on a passing of accounts.

How courts apply any rule of thumb, and which factors push an amount up or down, depends on the estate and the work done, so confirm the current approach with a lawyer.

In plain terms, the question is whether the amount is fair and reasonable for what this trustee actually did. A simple estate handled quickly is different from a complicated one that took years.

Taking payment before accounts are passed

The Court of Appeal has said an estate trustee may take compensation before the accounts are passed only in limited cases: all competent persons with a vested or contingent interest agree, the court approves, or the will allows it. Otherwise the trustee risks being held liable for breach of trust.

This is important for executors. Paying yourself first, without agreement or approval, can create personal risk. It is also important for beneficiaries. If you see large payments to the trustee with no agreement from you, you can ask questions.

How the court reviews the amount

On a passing of accounts the court can approve a lower amount of compensation than the trustee took. It can then order the trustee to repay the difference to the estate. That means a trustee who overpays themselves may have to give money back.

The judge may also inquire fully into the estate's property and how it was administered and disbursed. Compensation is therefore reviewed alongside the rest of the trustee's work, not in isolation.

An executor generally need not account to the court, other than by inventory, unless a person interested in the property or a creditor requires it. So the review usually happens when someone asks for it.

When and how beneficiaries can object

A beneficiary with a vested or contingent interest can file a notice of objection to the accounts or to the compensation claimed. If the objection is not withdrawn, the passing becomes a contested hearing.

The Court of Appeal held that a notice of objection is not a claim or proceeding under the two-year period in section 4 of the Limitations Act, 2002. That does not mean you can wait indefinitely on other claims. Other claims you may have can be subject to a two-year period from discovery, so take advice on timing.

Contested passings of accounts are subject to mandatory mediation under Rule 75.1. In Toronto, parties are asked to be ready to address mediation directions on the first return date.

• If there is no objection, or all objections are withdrawn, the application can proceed unopposed in writing before a judge in chambers.
• If an objection stays, the passing is a contested hearing.
• A contested passing goes through mediation.

What to do next

If you are an executor, keep careful records of your time and the work you do. Do not pay yourself before you have agreement, approval or authority in the will.

• Keep a log of tasks, dates and hours.
• Check whether the will says anything about compensation.
• Before taking payment, make sure all competent persons with a vested or contingent interest agree, the court approves, or the will allows it.
• If you are a beneficiary, ask for details of any compensation taken and the reasons for it.
• Talk to a lawyer before filing an objection or before passing accounts.

Frequently asked questions