Compensation For Executors and Trustees in BC
Many issues in estate litigation arise that pertain to the appropriate amount of compensation for executors and trustees.
The first place to start for the answer is the Trustee Act of British Columbia.
If the will or trust stipulates the amount of the executor or trustee’s compensation, then that will generally speaking be upheld by the courts.
The Courts are inclined to follow the stipulated direction of the testator in this regard.
If compensation is not stipulated in the testamentary document, then the maximum entitlement for an executor is 5% of the gross aggregate value of the estate, as compensation for their time spent, care, trouble and duties carried out.
In addition, the Trustee Act also provides for a maximum fee of .4% of the average market value of the assets on a yearly basis, for the care and management of the assets.
In the experience of disinherited.com, the overwhelming number of initial compensation disputes between the beneficiaries and the executor are resolved without access to the courts.
Most beneficiaries will often agree on a reasonable amount of compensation, as they both recognize the effort carried out by the executor,as well as they are very often in a hurry for their inheritance and do not want to further delay the distribution.
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
One of the feeding decisions that is often referred to is McColl Estate (1967) 65 WWR 110 BCSC where the aforesaid criteria were set out by the court
The type of criteria that the court will look at is whether on the one hand it was simply a bank account with a large amount of money, that involved very little work, or on the other hand ,a small problematic estate to the point that it was a thankless job.
In the experience of disinherited.com is not usual to be paid the maximum 5% in most estates.
The average instead being more in the range of 2 1/2 to 3%. .
It is in fact surprising that very few of the contested compensation matters actually proceed to court and there is in fact a paucity of caselaw on the topic.
In the experience of disinherited.com carrying out the duties of executor or trustee can often amount to being a fire hydrant on a street of dogs