Alberta Executor Fees
Acting as an executor (currently known in Alberta as a personal representative) of an estate can be a big job. It can be time consuming, and is not without personal risk. As such, where the will does not expressly set out the compensation to which the executor is entitled, the Trustee Act provides for the court to determine appropriate compensation.
The Act provides that the executor is entitled to "any fair and reasonable allowance for the trustee's care, pains and trouble and the trustee's time expended in and about the trust estate that may be allowed by the Court." So how does the court determine what is fair and reasonable? Our Edmonton estate administration lawyers may be able to help you to decide on a fair amount of compensation to claim for Alberta executor fees.
Consent of the Beneficiaries
If the will does not set out the fees to be paid to the executor, the executor can obtain the consent of the beneficiaries in order to set the fees. If the consent of the beneficiaries cannot be obtained, then the executor must seek the guidance of the court.
Factors the Court Will Consider
The court will consider the following factors, which are set out in Schedule 1 to the Surrogate Rules when determining the compensation that can be paid to an Alberta executor or personal representative:
- the gross value of the estate
- the amount of revenue receipts and disbursements
- the complexity of the work involved and whether any difficult or unusual questions were raised
- the amount of skill, labour, responsibility, technological support and specialized knowledge required
- the time expended
- the number and complexity of tasks delegated to others
- the number of personal representatives appointed in the will, if any
While navigating executors' duties in Alberta, an individual may be entitled to additional compensation. This applies in specific circumstances such as when an executor must act in the role of manager or director of a business, runs into unusual difficulties in administering the estate, or must provide instructions with respect to litigation.
If the will appoints more than one executor, the compensation to be paid for the administration of the estate must be split between them in accordance with the amount of work performed by each.
If the executor delegates some of their responsibilities to a professional, such as a lawyer or accountant, the fees paid to the executor should be reduced to account for the fees paid to the professional.
Executor's Expenses
An executor is entitled to be reimbursed for out-of-pocket expenses that are "reasonably incurred" while carrying out their duties. This includes fees that the executor may have paid to lawyers, accountants, realtors, auctioneers, advisors, and other professionals.
Guidelines
Guidelines for calculating appropriate executor fees in Alberta have been published by the Legal Education Society of Alberta and the Alberta Law Reform Institute. The Guidelines provide that fees can be calculated as follows:
- 3-5% on the first $250,000 of capital, 2-4% on the next $250,000 of capital and 0.5-3% on the balance of the capital
- 4-6% on revenue receipts
- for care and management, 0.3-0.6% on the first $250,000 of capital, 0.2-0.5% on the next $250,000 of capital and 0.1-0.4% on the balance of the capital
However, the Courts have found that fees calculated pursuant to the Guidelines must be tested against the factors set out in the Surrogate Rules. Depending on the circumstances, the guidelines can provide valuable guidance and help executors and beneficiaries come to an agreement with respect to determining fair compensation.
Contact our Edmonton Estate Administration Lawyers Today For a Consultation
Would you like more information, or would like to discuss specific questions about claiming Alberta executor fees? Contact us today to schedule a consultation with our Edmonton estate administration lawyers, and see how we might be of service to you.
*This article is intended as an introductory overview on a legal subject, and is not intended legal advice. For legal advice, please consult with a lawyer.