- Ontario law gives an estate trustee a fair and reasonable allowance for care, pains, trouble and time, rather than a fixed fee.
- If the will fixes the allowance, the general rule in section 61 of the Trustee Act does not apply.
- Taking pay before accounts are passed is only allowed in limited situations, and any excess can be ordered repaid.
If you are an executor, you may be wondering whether you can be paid for the work, and how much. If you are a beneficiary, you may be wondering whether the amount an executor takes is fair. Both questions come back to the same legal test.
This article explains how compensation is set in Ontario, what it is often confused with, and what records and steps help avoid disputes. It is general information, not advice on your estate.
The rule: a fair and reasonable allowance
An estate trustee, which is the formal name for an executor, 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. There is no fixed percentage written into that rule.
The amount can be settled even if the estate is not before the court in an action. When accounts are passed, the judge may allow a fair and reasonable allowance. In practice, that means beneficiaries and the executor can often agree, and the court steps in if they cannot.
When the rule does not apply
- The will fixes the allowance. Section 61 does not apply where the will or other instrument creating the trust fixes it.
- The executor is a lawyer. Where a barrister or solicitor is a trustee and provides necessary professional services, the allowance may be increased to reflect those services.
Read the will carefully before assuming the general rule governs. Whether a particular clause fixes compensation can depend on its wording, and a lawyer can confirm.
Do not confuse this with power of attorney fees
Fee scales you may see online often belong to other roles. An attorney under a continuing power of attorney for property is paid under a prescribed scale, not an executor. A guardian of property or attorney may take annual compensation in accordance with that scale. A continuing power of attorney ends when the grantor dies, and from then the estate trustee named in the will deals with the property.
| Role | How payment is set |
|---|---|
| Executor (estate trustee) | Fair and reasonable allowance |
| Attorney under continuing power of attorney for property | 3% on receipts, 3% on disbursements, and three-fifths of 1% of the annual average asset value |
| Public Guardian and Trustee (estate administration) | 3% per transaction and 0.60% of annual asset value |
These figures are for comparison only. They do not set an executor's pay.
Taking payment, records and tax
Taking compensation before accounts are passed is called a pre-take. The Court of Appeal for Ontario has held it is allowed only with the agreement of all interested persons who are sui juris, with court approval, or where the will provides for it. If a pre-take is later judged too high, the court can approve a lower amount and order the difference repaid to the estate.
Executors must keep accurate records of the estate's assets and transactions. An executor who believes an expense is properly incurred may pay it from the estate or pay personally and recover it, but the court can later disallow an expense that was not properly incurred.
Executor fees are taxable. 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.
What to do next
- Check the will for any clause on compensation.
- Keep a running record of time spent and tasks done.
- Keep receipts for every expense paid or reimbursed.
- Talk with beneficiaries early and put any agreement on pay in writing.
- Ask an accountant how the fees will be reported for tax.
- Get legal advice before taking payment ahead of a passing of accounts.
Frequently asked questions
Is there a set percentage an executor can charge in Ontario?
The statute speaks of a fair and reasonable allowance, not a set percentage. The amount can be agreed or, if needed, assessed by the court.
Can an executor pay themselves before the estate is settled?
Only in limited cases: with agreement of all interested persons who are sui juris, with court approval, or where the will allows it. If the court later approves less, the difference can be ordered repaid.
Does the will change how much an executor gets?
Yes. If the will fixes the allowance, the general rule in section 61 of the Trustee Act does not apply.
Is executor compensation taxable?
Yes. CRA treats it 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
- Ontario.ca – Ontario Public Guardian and Trustee fees — ontario.ca
- O. Reg. 26/95 (Substitute Decisions Act, 1992), s. 1 — Ontario e-Laws
- Substitute Decisions Act, 1992, s. 40(1) — Ontario e-Laws
- 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
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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