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Estate Compensation

Home > Estate Planning  > Estate Compensation

Estate Compensation

When someone dies, the person appointed to look after the Estate is a Personal
Representative (“PR”).

Sometimes known as an Executor or where there is no Will the person appointed by the
Court becomes the Administrator(s) of an Estate.

There can be a lot of work in looking after Estate matters, how do those persons get
paid (if they wish to receive compensation for their services) and be reimbursed for
reasonable expenses that they incur:

1.   If there is a Will sometimes the amount of compensation is fixed and specified in
the Will;

2.   Where the Will does not designate fees which is not unusual, this leaves the
decision for fees up to the PR or the Administrator where no Will. The amount of
compensation is usually based on:

a.   the size and complexity of the Estate;
b.   the amount of time expended that is reasonable and necessary;
c.    whether or not there were joint PRs or Administrators and whether or not
they had the assistance of an Estate Solicitor.

The General Rule in Canada stipulates that the fees must be “fair” and
reasonable given the nature of the Estate.

In Alberta it is generally expected that the fees are to be allocated between those
persons acting jointly and are calculated from a low of 1% to a high of 5% of the
total net value of the Estate.

It should be noted that any PR/Executor or Administrator’s fees claimed can be
disputed if not reasonable. These fees are fully taxable, similar to any other person
earning an income at a job.

Reimbursement for a PR/Executor or Administrator’s expenses – A PR/Executor or
Administrator may feel that they need to increase their fees because they had to pay a
lot of out-of-pocket expenses while working on behalf of the Estate, i.e. photocopies,
travel expenses, postage, legitimate loss of income, fortunately reimbursement from the
Estate to cover appropriate expenses is in addition to the compensation that they may
receive for their fees, and paid to them from the Estate funds.