Acting as executor is a significant responsibility — and BC law provides for fair compensation. Here's how it's calculated.
Acting as the executor of an estate is a demanding, time-consuming job. Gathering assets, paying debts, filing tax returns, dealing with beneficiaries, and distributing the estate can take months or years. BC law recognizes this burden by providing executors with the right to be compensated — but the calculation of fair compensation is less straightforward than most people expect.
The Legal Basis for Compensation
Executor compensation in BC is governed primarily by the *Trustee Act* and, for estates under administration, the *Wills, Estates and Succession Act* (WESA) s.88. The traditional rule — which BC courts continue to apply — allows an executor a fee of up to 5% of the gross value of the estate for capital receipts and disbursements, up to 5% of the income of the estate during the administration period, and a care and management fee of up to two-thirds of 1% per year on the average market value of assets under management for estates that require ongoing management (such as trusts for minor beneficiaries).
These are maximums, not automatic entitlements. The appropriate fee is whatever is fair and reasonable given the circumstances.
What Courts Consider
When approving executor compensation (either on a passing of accounts or a contested application), courts examine:
- The size and complexity of the estate — a large estate with multiple properties, a business, or contentious family dynamics warrants higher compensation than a simple estate of a few accounts.
- The skill and care required — specialized expertise in managing an estate with unusual assets is recognized.
- Time spent — keeping detailed time records supports a compensation claim.
- The success achieved — an executor who navigates a difficult estate efficiently and without litigation is compensated accordingly.
- The degree of difficulty and responsibility — multiple beneficiaries, creditor claims, or tax complications increase the value of the executor's work.
Keeping Records
The single most important thing an executor can do to protect their compensation claim is to keep detailed contemporaneous records — a log of time spent, tasks completed, decisions made, and correspondence sent. A credible, itemized account of the work done is essential if compensation is ever contested.
When Compensation Is Fixed by Agreement
Ideally, the will addresses executor compensation — either by setting a specific amount, confirming entitlement to reasonable compensation, or indicating that the executor is to serve without fee. If the will is silent and the beneficiaries are adults who all agree, they can consent in writing to a specific compensation figure. This avoids the need for court approval.
Passing Accounts
If beneficiaries do not consent to the compensation, or if the executor wants formal court approval, the executor must pass accounts — a formal court process in which all receipts, disbursements, and the proposed compensation are presented to the court and examined by the beneficiaries. This process provides transparency and court approval, but it involves legal fees and court time.
Family Executors Who Waive Compensation
Family executors (a surviving spouse, adult children) often waive compensation out of a sense of family obligation. This is a personal choice, but it has a practical downside: waiving compensation means the executor absorbs the cost of their significant time and effort personally. If the estate is large and complex, this can represent a substantial amount.
Tax Implications of Accepting Compensation
Unlike a bequest under a will (which is not taxable income), executor compensation is taxable income in the year it is received. The executor must report it on their personal tax return. This tax cost should be factored into any compensation agreement. In some cases, it is more tax-efficient for a beneficiary to receive a larger inheritance in lieu of executor fees, depending on the marginal tax rates involved.
Professional Executors
If you name a trust company or professional executor in your will, their fees are typically set by published tariffs — often 1–2% of estate value plus hourly rates for specific tasks. These fees are disclosed in advance and provide certainty, but they can be significant on larger estates. Naming a professional executor makes sense for large, complex, or contentious estates, or where no suitable family member is available.
*This article is general information about BC estate law. It is not legal advice. Please consult a qualified BC estate lawyer for advice specific to your circumstances.*
You must claim compensation — it is not automatically paid. If the beneficiaries consent, compensation can be settled by agreement. If not, you must pass accounts before the court. Either way, you need to document your work and raise the issue proactively — courts do not award compensation that has not been claimed.
A will can restrict or eliminate an executor's right to compensation. If the will clearly states that the executor serves without fee, that direction is binding unless the court determines that the estate is so complex or burdensome that the direction should not be enforced. Read the will carefully and consult a lawyer if you are named as executor without compensation on a complex estate.
No. If all beneficiaries are adults with legal capacity and they all provide written consent to the proposed compensation and the accounts, formal court approval is not required. This is the most common and practical approach for straightforward estates. Court involvement is required only when there is a dispute or when a beneficiary is a minor or lacks capacity.
Yes. Being a beneficiary does not disqualify you from claiming executor compensation. The compensation is a separate legal entitlement from your inheritance. However, as noted, it is taxable income — whereas your inheritance generally is not. The tax implications may affect whether it is more advantageous to take compensation or simply receive a larger share of the estate.
Simple estates with a clear will, cooperative beneficiaries, and no real property can be wound up in six to twelve months. Complex estates — with real property requiring probate, business interests, multiple jurisdictions, or contentious beneficiaries — can take two to five years or more. The executor's compensation reflects this time and effort.