How Much Should Executors Get Paid?
Unless the will provides otherwise, all executors whether lay or professional, whether experienced or not, are entitled to be paid remuneration in accordance with the provisions of Section 88 of the Trustee Act, R.S.B.C.
This section allows the executor to be paid, in the discretion of the court, up to a maximum of 5% of the gross aggregate value of the estate, including capital and income, together with an annual care and management fee of up to .4% of the average market value of the estate.
In most circumstances, the beneficiaries may well approve a 5% fee to the executor.
In many instances however, when contested, the courts will not allow the executor be paid the maximum 5% of the gross aggregate value of the estate.
The courts will enquire into a number of factors, including the complexity of the estate, the experience of the executor, the time spent by the executor, the value of the estate, the amount of time spent administering the estate, and the like.
However from a perusal of the somewhat limited number of cases on point, it would appear that the court very often will award fees more in the range of 2 1/2% to 3 1/2% rather than the maximum.
When beneficiaries cannot resolve the fee dispute, the court uses the following criteria in determining the amount of executor/trustee compensation, namely:
A. The time occupied;
B. The success achieved in the final results;
C. The amount involved in the estate;
D. The skill and ability displayed and required;
E. The care and responsibility involved
see McColl Estate (1967) 65 WWR 110 BCSC.
In The Estate of Farrugia aka Wagner 2012 BCSC 1031 at a determination to determine the executors remuneration, the court heard that one of two executors primarily administered an estate with an aggregate value of $442,000, and gross earned income of $229,000.
The court considered the relative complexity of the administration, and that much of the hands-on work had been done by that one executor in particular, who had spent 223 hours time administering the estate.
The court determined that the appropriate fee for that one executor should be 4% of capital and income, which amounted to $26,800, which the court equated to slightly more than $120 per hour.