How Much Should An Executor Be Paid?
Hooke Estate v. Johnson 86 E.T.R. (3d) 92
The deceased appointed her solicitor as trustee of her estate. The Trustee handled her estate in accordance with deceased’s wishes and claimed executor’s compensation in amount of $21,900.93 for work done.
The Trustee applied to pass estate accounts and the Respondents objected on the ground that cthe ompensation claimed was excessive and unreasonable.
The Trustee reduced her claim for executor’s compensation to $10,287.84.
The Court awarded the Trustee compensation of $8,986.84, stating that the Trustee is entitled to such fair and reasonable allowance for care, pains, trouble and time expended in administering estate.
While the practice has developed in Ontario of awarding compensation on basis of 2.5 per cent against, inter alia, capital receipts and capital disbursements, those fees will not be automatically or routinely allowed.
The determination of fair and reasonable compensation does not necessarily involve maintaining fidelity to fixed percentages. The work involved in carrying out the deceased’s wishes as set out in her will was relatively simple and uncomplicated, and did not require an inordinate amount of time. This was relatively uncomplicated estate to administer. There were no court proceedings to deal with . The work performed did not require great skill and ability.
Given quantum and nature of work involved in fulfilling work either as trustee or counsel, reliance on 2.5 percentages was unwarranted.
Capital receipts claim was reduced from $1,582.32 to $1,264.84 — Capital disbursements claim was reduced from $1,483.52 to $500 — Total amount of executor’s compensation was $8,986.84.
The Law
The Trustee ActRSBC provides that a trustee is entitled to such fair and reasonable allowance for the care, pains, trouble and the time expended in administering the estate.
7 In assessing the appropriateness or otherwise of an executor’s compensation, five factors should be considered namely;
1) the size of the trust;
2) the care and responsibility involved;
3) the time occupied in performing the duties;
4) the skill and ability shown; and
5) the success resulting from the administration.
See Toronto General Trusts Corp. v. Central Ontario Railway(1905), 6 O.W.R. 350(Ont. H.C.).
8 In some cases, proper compensation may be attained by the allowances of percentages. These percentages however, should be employed only as a rough guide to assist in the computation of what may be considered fair and reasonable compensation. The reliance on percentages in some cases may violate the true principle of fairness and reasonableness upon which compensation should be estimated. See Atkinson Estate, Re(1951), [1952] O.R. 685(Ont. C.A.) at page 698.
9 While a practice has developed in Ontario, of awarding compensation on the basis of 2 1/2 percentage against the categories of Capital Receipts, Capital Disbursements, Revenue Receipts and Revenue Disbursements along with a management fee on the gross value of the estate, these fees will not be automatically or routinely allowed. See: Jeffery Estate, Re, [1990] O.J. No. 1852(Ont. Surr. Ct.), page 4..
