- An executor may be allowed a fair and reasonable allowance of up to 5% of the estate's gross aggregate value, plus a separate capped annual care and management fee.
- A court can settle the amount of an executor's compensation on application, even if the estate is not otherwise before the court.
- These rules do not apply where the will itself sets the allowance.
If you are a beneficiary, the idea that the executor is paid from the estate can come as a surprise, especially when the amount seems high. If you are the executor, you may wonder what you can reasonably claim for the time and responsibility involved.
In British Columbia, the Trustee Act sets limits on executor pay and gives the court a role in reviewing it. This article explains the cap, how compensation connects to the accounts an executor must prepare, and how a beneficiary can test the amount.
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 not exceeding 5% of the gross aggregate value of the estate. How that value is worked out for your particular estate depends on the facts, so it is worth confirming with a lawyer or accountant.
There is also a separate annual care and management fee. It is capped as a percentage of the average value of the assets being managed. The exact percentage should be confirmed in the current Trustee Act or with a lawyer.
The 5% figure is a ceiling, not an entitlement. The Act speaks of a fair and reasonable allowance, so an executor is not automatically owed the maximum.
When the will sets the pay
The statutory rules on allowances and on the court settling compensation do not apply where the allowance is set by the instrument creating the trust, such as the will. If the will says what the executor is to be paid, that wording matters more than the general cap.
- Read the will's compensation clause carefully before assuming the 5% cap applies.
- A will that is silent on pay generally leaves the executor relying on the Trustee Act provisions.
- If the wording is unclear, a lawyer can help you read how it fits with the Act.
How a beneficiary can challenge the amount
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 usual route for a beneficiary who wants executor pay tested rather than simply accepted.
Before applying, ask the executor for a written breakdown of what they have taken and the work they say it covers. Many concerns are cleared up at that stage. If they are not, an application is the formal way to have the amount decided.
Compensation and the estate accounts
Executor duties include preparing accounts showing the estate's assets, receipts, disbursements and distribution, and getting the court's approval of those accounts. Whether and how compensation is shown in the accounts for your estate depends on the facts, so it is worth asking the executor or a lawyer if you cannot tell what was paid.
| Accounts rule | What it says |
|---|---|
| First accounts | Executors, administrators and trustees under a will must obtain an order passing their first accounts within two years of the grant or appointment, unless the exceptions in s. 99 apply |
| Annual accounts | If a beneficiary serves notice requiring it, accounts must be passed annually, within one month of the anniversary |
| Failure to pass accounts | A trustee who fails to pass accounts as required may be called before the court to explain why |
Section 99 contains exceptions to the two-year rule, so it is worth checking the full text or asking a lawyer whether one applies to your estate.
If an executor made a mistake: relief and next steps
If a trustee is or may be personally liable for a breach of trust but acted honestly and reasonably, the court may relieve the trustee wholly or partly of that liability. Relief depends on the trustee having acted both honestly and reasonably, and whether that applies to your situation is worth confirming with a lawyer.
- Beneficiaries: request the accounts and a breakdown of any compensation taken.
- Beneficiaries: if you want regular accounts, you can serve notice requiring annual accounts, and the accounts must then be passed annually, within one month of the anniversary.
- Executors: keep records of your time, receipts and decisions from the start.
- Everyone: check whether the will sets the allowance.
- Talk to a lawyer promptly, since time limits can apply to claims and depend on the facts.
Frequently asked questions
Is 5% what every executor gets?
No. The Trustee Act allows a fair and reasonable allowance that does not exceed 5% of the estate's gross aggregate value. It is a cap, not a fixed rate.
Can a beneficiary ask the court to review executor pay?
Yes. The court may settle the amount of compensation on application, or direct the registrar to settle it, even if the estate is not otherwise before the court.
What if the will says how much the executor is paid?
Where the will sets the allowance, the Trustee Act provisions on allowances and on the court settling them do not apply. The will's wording then becomes central.
Can I force the executor to show me the accounts?
Executors must generally pass first accounts within two years of the grant, subject to exceptions. If a beneficiary serves notice, accounts must be passed annually, and a trustee who fails to do so may be called before the court.
Sources
- Trustee Act, RSBC 1996, c. 464, s. 99 — bclaws.gov.bc.ca
- gov.bc.ca, After a Death: Deal with wills and estates — www2.gov.bc.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
This is a wills & estates question
A single will with us is from $894.88, tax included. Third-party fees are extra.