Understanding Executor Fees

An individual who has been appointed as a personal representative, or executor, of an estate is entitled to remuneration for their efforts. If the amount of remuneration is not set out in the deceased’s will, or if the deceased died intestate, then the amount of remuneration is governed by the Trustee Act, R.S.B.C. 1996 c.464. If the amount of remuneration is set out in the will, then the will governs. An exception to this would be if the will sets out the amount of remuneration and the personal representative was one of the witnesses to the will. In this case, the provision setting out the remuneration in the will is void and the Trustee Act will apply.

Section 88 of the Trustee Act notes that remuneration for a personal representative cannot exceed 5% of the gross aggregate value of the estate. Section 88(3) also allows for a personal representative to collect a care and management fee not exceeding 0.4% of the average market value of the assets.

The amount of remuneration can be agreed upon by the beneficiaries of the estate. If the beneficiaries cannot come to an agreement then the amount of remuneration can be fixed by obtaining a court order.

In a recent decision, In the Matter of the Estate of Nahar Singh Litt, 2020 BCSC 1921, the Supreme Court of British Columbia confirmed that the following factors should be considered when determining the appropriate amount of remuneration for a personal representative:

1. The magnitude of the estate;

2. The care and responsibility taken by the personal representative in administering the estate;

3. The time involved in administering the estate;

4. The skill and ability displayed by the personal representative in handling the estate; and,

5. The overall success achieved by the personal representative.

If there are two or more individuals appointed as the personal representative of an estate, the remuneration is determined in the same manner.

In addition to the remuneration discussed above, a personal representative is also entitled to be reimbursed for any out-of-pocket expenses that were properly and reasonably incurred in the administration of the estate.

For assistance with estate litigation matters, contact Natasha Roth at Bradbury Sippel - 250-824-2560 or natasha@bradburysippel.com