Trustee Fees for a Family Trust in Ontario: How Compensation Is Calculated

Anyone asked to take on the ongoing job of trustee for a family trust — reviewing investments, filing tax returns, dealing with beneficiaries year after year — reasonably wants to know whether, and how much, they can be paid for it. The honest answer is that Ontario law does not hand you a percentage or a formula for an ordinary family trust. It hands you a standard, and leaves the specifics to be worked out.

This article walks through where trustee compensation actually comes from, what tends to influence it, and why family members often serve without being paid at all.

Why There Is No Set Percentage for Trustee Fees

Under Ontario's Trustee Act — the same statute that governs an estate trustee's compensation — a trustee is entitled only to a "fair and reasonable allowance" for their work, as fixed by the court, unless the trust document itself sets out how compensation is to be calculated. There is no government-set percentage or rate that automatically applies to every trust, and any percentage referenced elsewhere is, at most, a guideline some courts have used in particular cases, not a guaranteed entitlement.

Where Trustee Compensation Comes From

The trust document itself

Many well-drafted trusts address compensation directly, either by specifying an amount or formula, by expressly stating the trustee will serve without compensation, or by pointing to the general legal standard. Where the document is clear, that provision generally governs.

Agreement among the beneficiaries

Where the document is silent and every beneficiary is an adult who can consent, the trustee and beneficiaries can sometimes agree on compensation directly. This avoids the cost and delay of a court application, but it depends on everyone being willing to agree, and on every affected beneficiary actually being able to consent, which is not the case where a minor or incapable beneficiary has an interest.

Court approval

Where the document is silent and beneficiaries cannot agree, or where a minor, unborn, or incapable beneficiary is involved, a court can be asked to fix what is "fair and reasonable" based on the trustee's actual work and the trust's circumstances.

Factors That Influence What's "Fair and Reasonable"

Courts and beneficiaries considering trustee compensation generally look at things like:

• The size and complexity of the trust property being managed.
• The amount of time and effort the role actually required.
• The degree of skill, responsibility, and risk the trustee took on.
• The results the trustee achieved for the beneficiaries.
• Any special expertise the trustee brought to the role.

Because these are judgment calls rather than a formula, two trusts of similar size can end up with quite different compensation outcomes depending on how much work was genuinely involved.

Family Member Trustees Who Serve Without Pay

It is common, especially with smaller family trusts, for a parent or sibling to serve as trustee without taking any compensation at all — sometimes because the trust document says so, and sometimes simply because the family trustee does not want to reduce what beneficiaries receive. There is nothing legally wrong with this, but it should be a deliberate choice rather than something that happens by default because nobody addressed the question when the trust was set up.

Why Getting This Wrong Causes Problems Later

A trustee who pays themselves compensation without a clear basis for the amount, whether too much or without proper documentation, can face a beneficiary challenge, sometimes years after the fact when memories of what was agreed have faded. Addressing compensation clearly at the outset, or getting proper advice before taking any fee partway through a trust's life, avoids turning a manageable question into a dispute.

Frequently asked questions