- In Nova Scotia the Probate Court sets an executor's commission, which covers all of the personal representative's services.
- A fee written into the will generally replaces the statutory commission unless the executor renounces it within the time limit.
- How a payment to you is taxed and reported depends on your situation, so it is worth confirming with an accountant before you decide whether to take payment.
Serving as executor is real work, and many people wonder whether they should be paid, and whether that payment will be taxed. If you are also a beneficiary, the question gets more tangled, because you may receive money in two different roles.
This article explains how compensation is set in Nova Scotia so you can see what is being paid for. The tax treatment itself depends on your circumstances and federal rules, so it is something to confirm with an accountant.
This article covers the law of Nova Scotia.
Pay for services versus an inheritance
An executor can receive money in two different ways. One is a share of the estate as a beneficiary under the will. The other is compensation for work done as personal representative.
Under Nova Scotia law, a commission covers all of the personal representative's services in completing administration. It is a payment for services, which is a different thing from a gift or inheritance. Because the two payments have different purposes, tax professionals look at them separately, so keep them separate in your records.
How commission is set in Nova Scotia
On settlement, the personal representative may be allowed, beyond actual and necessary expenses, a commission not exceeding five percent of the amount received. The court sets it. The Probate Court sets the final amount when the estate closes.
No percentage is automatic. In setting commission the court may consider the estate's size, care and responsibility, time spent, skill and the success of the administration.
When the will or an agreement sets the fee
A fee set out in the will generally replaces the statutory commission unless the executor renounces it within the time limit.
A fee agreement between the testator and a proposed personal representative binds neither the court nor the beneficiaries unless it is written into the will.
| Source of the fee | General effect |
|---|---|
| Probate Act commission | Court sets it, up to five percent of the amount received |
| Fee written in the will | Generally replaces the statutory commission unless renounced in time |
| Side agreement not in the will | Binds neither the court nor beneficiaries |
Tax and reporting: what to raise with an accountant
Whether and how compensation is taxed, and how it is reported, depends on federal tax rules and on your own situation. Do not assume the answer. An accountant can tell you how your payment should be treated and whether it affects anything else on your return.
- Ask how commission differs, for tax purposes, from your share as a beneficiary.
- Ask when the payment should be reported and on what form.
- Ask whether taking payment, or choosing not to, changes your overall tax picture.
- Ask whether the estate itself has any filing to make.
What to do next
- Read the will to see whether it names a fee.
- Keep a log of time spent and tasks done, because the court may consider time spent and care and responsibility.
- Record executor payments separately from any share you receive as a beneficiary.
- Speak with an accountant about tax before you take payment.
- Ask a lawyer how the commission will be presented to the court and beneficiaries.
Frequently asked questions
Is an executor entitled to be paid in Nova Scotia?
A personal representative may be allowed a commission not exceeding five percent of the amount received, beyond actual and necessary expenses, and the court sets it. It is not automatic, since the court considers factors such as time spent and skill.
Can the will set my fee?
Yes. A fee set out in the will generally replaces the statutory commission unless the executor renounces it within the time limit.
If I am also a beneficiary, is everything I receive treated the same way?
Not necessarily. Commission is for services in completing administration, while a share under the will is something you receive as a beneficiary. An accountant can explain how each should be reported.
Does an agreement about my fee with the testator count?
They can discuss it, but an agreement between the testator and a proposed executor binds neither the court nor beneficiaries unless it is in the will. The court sets the final commission.
Sources
- Probate Court Practice, Procedure and Forms Regulations — novascotia.ca
- Probate Act, s. 76 (as reported via Probate Act, SNS 2000, c 31 and Department of Justice guidance) — novascotia.ca
- Probate Act, SNS 2000, c 31, s. 77 — nslegislature.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
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