- An Ontario estate trustee is entitled to a fair and reasonable allowance for care, pains, trouble and time, as allowed by a judge.
- Taking pay before accounts are passed is allowed only with consent of the interested adults, court approval, or where the will permits it.
- Executor compensation is taxable, and estate trustees must keep accurate records of the assets and transactions in the estate.
If you are an executor (the law calls you an estate trustee), you may wonder whether you can be paid for the work. If you are a beneficiary, you may wonder how much the trustee can take out of the estate before you receive your share.
Ontario does not set one fixed fee for estate trustees. This article explains the rule that applies, the exceptions, the risk of paying yourself early, and what beneficiaries can ask for.
The basic rule: a fair and reasonable allowance
Under the Trustee Act, an estate trustee is entitled to a fair and reasonable allowance for the care, pains, trouble and time spent on the estate, as allowed by a judge of the Superior Court of Justice. The amount can be settled even if the estate is not before the court in an action.
When a trustee's accounts are passed (formally reviewed by the court), the judge may allow a fair and reasonable allowance for that work. How a judge applies those words to a particular estate depends on the facts, so it is worth confirming with a lawyer.
Exceptions: the will and lawyer trustees
If the will or other document creating the trust fixes the allowance, the general rule in section 61 does not apply. Read the will carefully for any clause about payment.
Where a lawyer is a trustee and provides necessary professional services, the allowance may be increased to reflect those services. This is a narrow exception for professional work, not a general right for every trustee.
Taking compensation before the accounts are passed
Some trustees pay themselves along the way. The Court of Appeal for Ontario has held that a trustee may take compensation before passing accounts only with the agreement of all interested people who are sui juris (legally able to decide for themselves), with court approval, or where the will provides for it.
There is a real risk in doing it early. If the court later approves a lower amount, it can approve the reduced compensation and order the difference repaid to the estate.
- Ask whether every interested adult has agreed in writing.
- Check whether the will allows early payment.
- Consider asking the court to approve the amount if there is any doubt.
- Keep a note of how each amount was worked out.
Expenses, records and tax
Compensation is different from expenses. A trustee who believes an expense is properly incurred in carrying out the trust may pay it from trust property, or pay it personally and recover the same amount from the estate. The Superior Court of Justice may later disallow a payment or reimbursement if the expense was not properly incurred.
Estate trustees must keep accurate records of the assets and transactions in the estate. Accounts filed with the court include the money received, the money paid out (including the trustee's compensation), and a statement of the compensation claimed.
Executor fees are taxable. The CRA treats them as business income if the person acts as executor in the course of a business, and otherwise as income from employment or office. An accountant can confirm how this applies to you.
If you are a beneficiary: asking for accounts
There is no statutory requirement for estate trustees to pass accounts at fixed intervals, and they may choose not to unless the court compels them. Apart from an inventory, an executor generally need not account to a court unless asked by or for a person interested in the property or a creditor.
A person who appears to have a financial interest in the estate may move for an order requiring the trustee to pass accounts. On a passing, the judge can inquire into complaints, including misconduct or neglect causing loss, and may order payment to the estate.
What to do next
- Trustees: read the will for any clause fixing compensation, and keep a running record of time and tasks.
- Trustees: do not pay yourself early unless one of the permitted routes applies.
- Beneficiaries: ask for a clear summary of assets, receipts and payments before making any formal request.
- Everyone: speak with a lawyer if the amount, or the way it was taken, is disputed, and with an accountant about tax.
Frequently asked questions
Do I have to be paid as an executor?
The law entitles an estate trustee to a fair and reasonable allowance, as allowed by a judge. If the will fixes the allowance, section 61 does not apply. Whether and how to claim in your situation is worth confirming with a lawyer.
Can a beneficiary object to executor fees?
A person with a financial interest can move to require the trustee to pass accounts. On a passing, a beneficiary who objects must serve and file a notice of objection at least 35 days before the hearing.
What if an executor already took too much?
If compensation was taken early and the court later approves a lower amount, it can order the difference repaid to the estate. A lawyer can explain the options on your facts.
Are executor fees taxable?
Yes. The CRA treats the fees as business income or as income from employment or office, depending on the circumstances.
Sources
- Trustee Act, R.S.O. 1990, c. T.23, s. 61(1) (e-Laws) — Ontario e-Laws
- Wall v. Shaw, 2018 ONCA 929 — ontariocourts.ca
- CRA – Payments of fees for services — canada.ca
- Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 74.17(1) — Ontario e-Laws
- Estates Act, R.S.O. 1990, c. E.21, s. 50(1) — Ontario e-Laws
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
Start a file online — flat, published fees, reviewed by a licensed lawyer before a dollar is owed.