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Estate Trustee Compensation

Estate Trustee Compensation

By:

Posted May 10, 2018

In accordance with Ontario legislation an estate trustee is entitled to receive compensation for his/her efforts in administering the estate of a deceased person. The legislation does not provide a fixed percentage or methodology for calculating same.

The case law provides relevant criteria to be applied when fixing compensation, referred to as the five factors approach as follows:

  • The value of the estate assets;
  • The care, responsibility and risks assumed by the estate trustee;
  • The time spent by the estate trustee in carrying out responsibilities in the administration of the estate;
  • The skill and ability required and displayed to administer the estate assets; and
  • The results obtained and degree of success associated with the estate trustee’s efforts.

This criteria alone does not provide a specific method for calculating the quantum of compensation to which an estate trustee may be entitled. To provide some certainty to the determination of the amount of compensation the former tariff has been used as a guideline and followed for many years. That tariff is:

  • 2½% of capital and income receipts; and
  • 2½% of capital and income disbursements;

Therefore, as a general rule of thumb, an estate trustee may claim compensation of approximately 5% of the value of the estate assets using the tariff guideline.

It is important to note that if the estate trustee’s compensation is fixed by the provisions of the Will or in a separate agreement between the testator and the estate trustee and referred to in the Will, the amount of compensation to which that estate trustee is entitled is governed by the provisions of the Will or the agreement and not the legislation and the case law.

The amount of compensation claimed by an estate trustee must be approved by the residual beneficiaries of the estate or by a Judge on a Passing of Accounts and should not be pretaken unless the provisions of the Will provide otherwise.

This blog post was written by Heather Austin-Skaret, a Partner in the Wills and Estates and Real Estate teams.  She can be reached at 613-369-0356 or at Heather.Austin-Skaret@mannlawyers.com.

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Heather Austin-Skaret

Heather Austin-Skaret

My practice includes estate planning and administration as well as commercial and residential real estate work. I value my long standing relationships with some of Ottawa’s leading real estate agents and mortgage brokers. I enjoy sharing my knowledge and experience with others and enjoy giving presentations and seminars. Over the years, I have developed extensive experience in the area of estate planning and administration, which allows me to assist clients at some of their most difficult times.  I am constantly updating my knowledge as a member of S.T.E.P. and the Ottawa Estate Planning Council. As a true Maritimer, born in Springhill, Nova Scotia, I, of course, headed west. I started my university career at the University of Saskatchewan and then started inching my way back east, stopping to attend and complete my undergraduate at the University of Manitoba in 1990 with a Bachelor of Arts (Honours). I then moved to... Read More

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