Pre-Taking Executor Compensation in Ontario: Why It's Risky

Administering an estate is real work, and it's tempting for an executor to pay themselves along the way rather than wait until everything is wound up. In Ontario estates practice, this is called pre-taking executor compensation — helping yourself to a fee from estate funds before a court or the beneficiaries have approved the amount. It's a common shortcut, and it's one of the fastest ways for an executor to end up personally exposed.

This doesn't mean an executor can never be compensated until the very end of an estate. It means the way compensation is taken matters as much as the amount.

What "Pre-Taking" Actually Means

Pre-taking happens when an estate trustee transfers estate money to themselves, labelled as compensation, without first getting either:

• The consent of all the estate's capable, adult beneficiaries, or
• Court approval, typically through a passing of accounts

Because Ontario's Trustee Act only entitles an estate trustee to a "fair and reasonable allowance" as fixed by the court — or as set out in the will — an executor who unilaterally decides what's fair and pays it to themselves is substituting their own judgment for a determination the law reserves to others.

Why It's Risky

You might have to give it back

If beneficiaries object, or the court later reviews the estate's accounts and finds the self-paid amount excessive, an executor who pre-took compensation can be ordered to repay some or all of it — sometimes with the executor also bearing the legal costs of the dispute.

It can look like a breach of fiduciary duty

An estate trustee is a fiduciary, meaning they must act in the best interests of the estate and its beneficiaries, not their own convenience. Paying yourself first, before other creditors or beneficiaries are dealt with, can be characterized as self-dealing — even if the amount taken eventually turns out to be reasonable.

It can trigger a passing of accounts you didn't want

Beneficiaries who discover unapproved compensation often respond by demanding a full, formal accounting of everything the estate trustee has done — turning what might have been a straightforward estate into a contested, court-supervised process.

It can delay the estate's closing

Disputes over pre-taken compensation frequently become the reason an otherwise simple estate can't be wound up, since the amount owing — or owed back — has to be resolved before final distributions can be made with confidence.

Ways to Take Compensation Properly

• [ ] Get written consent from every capable, adult beneficiary before paying yourself, ideally after showing them a summary of the work and estate accounts
• [ ] Where beneficiaries include a minor, an incapable person, or someone represented by the Office of the Public Guardian and Trustee, plan for a formal or informal passing of accounts instead of relying on consent alone
• [ ] Keep detailed records of time spent and tasks performed, since these support whatever amount is eventually approved
• [ ] If the will fixes the executor's compensation, follow that direction rather than a separate calculation
• [ ] When in doubt about timing or amount, ask a lawyer before, not after, transferring the funds

If You've Already Pre-Taken Compensation

If compensation has already been taken without proper approval, the practical options are usually to seek the beneficiaries' after-the-fact consent if they're comfortable with the amount, to have the amount reviewed and confirmed through a passing of accounts, or — where beneficiaries object and no agreement is reached — to be prepared to repay some or all of it.

Frequently asked questions