Setting an Executor's Fee Without a Fight in St. Thomas

The situation

Abdi, a pharmacist, was named estate trustee in his mother's will after she died in St. Thomas following a short illness. She had been widowed years earlier, after his father Paulo passed away, and had managed her own finances independently ever since. An estate trustee — sometimes called an executor — is the person a will names to gather the deceased's assets, pay debts and taxes, and distribute what remains to the beneficiaries. Abdi's mother had left everything to be split evenly between him and his younger brother Yusuf, a physiotherapist who lived several hours away and had little appetite for the paperwork side of things but strong opinions about how quickly the estate should close.

The estate was not complicated in the sense of having exotic assets, but it was substantial: a house, a non-registered investment account, a small rental property that needed to be sold, and a handful of accounts that had to be tracked down, valued, and closed. Altogether the estate was worth somewhere in the range of $1,600,000 to $2,000,000 once everything was accounted for. Abdi came to Treadstone Law at the outset mainly for help applying for probate, the court process that confirms the will is valid and that the named estate trustee has authority to act. He did not initially plan for how much of his own time the year ahead would consume, or how he would eventually ask to be paid for it.

The problem

Ontario law entitles an estate trustee to what is usually called executor compensation — a fee for the work of administering the estate, distinct from anything the trustee receives as a beneficiary. The trouble is that the law does not set a fixed rate. Courts and estate practice in Ontario have long used a rough guideline of roughly five percent of the value of the estate, split across receiving the assets, managing them, disbursing them, and overseeing any ongoing care, but that guideline is a starting point for negotiation or a court's discretion, not an entitlement Abdi could simply invoice for. And a will can also fix or limit compensation itself, or say nothing at all — Abdi's mother's will was silent on the point.

Over the year, Abdi had done a genuine volume of work: he obtained date-of-death valuations, filed the application for a certificate of appointment of estate trustee, dealt with the sale of the rental property including a tenant who did not want to leave, settled the final tax return, and fielded a steady stream of questions from Yusuf, who checked in often but contributed little of the actual labour. Ten months into the year, tired of carrying the workload alone and increasingly resentful of how little he had to show for it, Abdi transferred $20,000 out of the estate's investment account to himself — an amount he had simply decided felt fair, with no guideline calculation behind it and no word to Yusuf beforehand. It was that transfer, more than the looming question of a final fee, that brought him to Treadstone Law. He knew, even before we told him, that an estate trustee paying themselves without agreement is exactly the kind of thing that invites a beneficiary to demand a full accounting, or worse, bring the trustee before the Superior Court to have the compensation reviewed, the transfer treated as a breach of trust, and the trustee potentially removed. He had not told Yusuf what he had done, and the longer it went unaddressed, the more it looked like something Yusuf would eventually have to discover on his own.

What we did

1. Addressed the unauthorized advance immediately, before anything else. We told Abdi plainly that the $20,000 he had already taken could not simply be left as it was — it had to be disclosed to Yusuf and treated as an advance against a properly calculated, agreed compensation figure, not kept quiet and hoped over. Correcting course before Yusuf found the transfer on his own was the single most important thing Abdi did in the whole process.
2. Calculated compensation against the standard guideline, not a round number. We worked through the value of what Abdi had received into the estate, managed during the year, and ultimately paid out or transferred to the beneficiaries, and applied the customary percentage-based approach courts use as a reference point. That produced a specific, defensible figure — one that comfortably absorbed the $20,000 already taken — rather than a number Abdi simply felt was fair, which made it much harder for Yusuf to dismiss either the advance or the final figure as arbitrary.
3. Adjusted the figure down to reflect the actual complexity of the estate. The rough guideline is a starting point, not a formula courts apply mechanically — an estate trustee's fee is meant to reflect the real time, responsibility and skill the job required. Abdi's year involved real work but no litigation, no contested claims, and a relatively cooperative beneficiary, so we recommended a figure modestly below the top of the customary range rather than claiming the maximum simply because the estate's value allowed for it.
4. Prepared a plain-language accounting that disclosed the advance rather than burying it. Before proposing any fee, we set out for Yusuf exactly what the estate had contained, what had been paid out in debts, taxes and expenses, and what remained to be distributed — including the $20,000 transfer, identified clearly as an advance against compensation rather than folded quietly into general expenses. An estate trustee owes beneficiaries a duty to account for their administration of the estate, and beneficiaries who understand what actually happened over the year, including a misstep that was owned up to rather than hidden, are far less likely to see a compensation request as opportunistic.
5. Presented the compensation request alongside the accounting, with the reasoning shown. Rather than stating a number, we set out how it had been calculated — the percentage applied, against which values, why it sat where it did in the customary range, and how the earlier $20,000 fit into the total — so Yusuf could see the logic rather than simply be told the answer. Beneficiaries who are shown the reasoning behind a figure are considerably more likely to sign off on it than beneficiaries asked to trust a conclusion, and considerably more likely to accept an early misstep that is followed by a transparent number than one followed by silence.
6. Obtained Yusuf's written consent before any further compensation was paid. Once Yusuf confirmed in writing that he accepted both the accounting, including the advance, and the proposed total compensation, the estate paid Abdi the balance as part of the final distribution. That written consent meant there was no need to ask the Superior Court to formally pass the accounts and approve compensation — a process available to executors who cannot reach agreement with beneficiaries, but one that adds months and legal cost to an estate that was otherwise ready to close, and one Abdi's earlier, undisclosed transfer could easily have triggered if it had come to light on its own.

The outcome

Abdi's total compensation came to roughly $70,000, calculated against an estate that settled at around $1,750,000 once the rental property sold and the final expenses were paid — a figure that sat below the top of the customary range once the relatively straightforward nature of the year was factored in, and that fully absorbed the $20,000 Abdi had already taken as an unauthorized advance. Yusuf raised a few questions about specific line items in the accounting, including the advance itself and the rental property's sale costs, but once he saw how the final figure had been calculated and against what, he accepted both the explanation for the earlier transfer and the compensation figure without pushing back further.

The estate closed without either brother needing to involve the Superior Court to resolve a dispute over the fee or the advance, which is the outcome that mattered most. A contested passing of accounts — where a court reviews an estate trustee's administration and rules on compensation, and can treat an unauthorized withdrawal as a breach of trust — can take many months and cost the estate a meaningful portion of its remaining value in legal fees on both sides, money that comes directly out of what the beneficiaries would otherwise receive. Abdi and Yusuf avoided that entirely, and the relationship between the two brothers, while never especially close, was not damaged by the process the way disputed estates so often damage families.

Abdi's own reflection, once the estate was wound up, was blunter than anything else he said about the year: the $20,000 he had taken without asking was the one decision he wished he could undo. Everything else about the administration he could defend easily — the hours, the headaches, the tenant who wouldn't leave. That one transfer, made out of frustration and never disclosed until it had to be, was the closest the estate came to a real dispute between the brothers, and it was only the early correction — disclosing it, folding it into a documented calculation, and getting Yusuf's agreement before anything more was paid — that kept it from becoming one.

What you can learn from this