Determining Proper Executor Compensation

Determining Proper Executor Compensation

The following factors are used to determine Executor compensation:

• Whether the Will says anything about compensation. Some Wills deal with this issue expressly.
• The time and effort expended by the Executor. Detailed time logs and records should be maintained.
• The care and responsibility involved; the complexity of the Estate. Some Estates are simple, and some are complex.
• The skill and ability of the Executor
• The results achieved
• The size of the Estate. Generally, larger Estates warrant more compensation, but keep in mind that large Estates are not necessarily complex.

The currently accepted calculation for Executor fees is:

• 2.5% of capital receipts
• 2.5% of capital disbursements
• 2.5% of income receipts
• 2.5% of income disbursements
• 0.4% per annum for ‘care and maintenance’ (often expressed as 2/5 of 1%).

A proper set of Estate accounts should show all transactions, broken into the four receipts and disbursement categories noted above.
Even this ‘proper’ % calculation is still an approximation. Courts usually assess the final amount on a combination of the subjective factors listed above and the % above.
One other point. If an Estate has a very expensive house in it that is sold easily, do not expect the actual formula above to work. Similarly, a complex, lower value Estate may result in a larger Executor fee.

Read our Executor No-No List

Justice Ontario Pre-formatted-fillable – Estate Forms