Can Executor Compensation be Denied?

Published on 29 August 2022, 07:22:56 AM

Estate executors who mishandle money have been served notice by Ontario’s courts — executor fees can be denied.

Your estate may not have to compensate executor fees at all if your estate trustee or personal representative:

• takes too long administering the estate
• invests estate assets poorly or not at all
• steals assets
• withholds information from beneficiaries
• acts in way that is a conflict of interest to their duties
• or is incompetent.

Your executor could even be forced to compensate your estate, if bad decisions or mistakes affect its value.

What is probate anyway?

How Executor Fees Are Decided

Generally, Ontario executor fees are calculated as:

• 2.5% of the value of capital assets collected and distributed, such as by selling a home to increase an estate’s value
• 2.5% of income collected and disbursed to beneficiaries, such as from cash or stocks and bonds
• plus 0.4% per annum to care for and maintain the estate.

Multiple estate trustees can share executor fees or the court can redistribute the fees if a single executor fails to assist your other trustees. Judges may reduce or increase the fee based on your executors’ skill, time and effort, how complex your estate is and directions in your Will.

Your Will may leave a more generous fee if you like, as long as your personal representative satisfies the court they deserve it.

When is Compensation Reasonable?

All said and done, executor fees must have a “reasonable relationship” to an estate trustee’s efforts and responsibilities. Lawyers, family and friends are among those denied compensation by Ontario courts for gross misconduct or not performing their executor duties.

For instance, an Ontario man who took $244,000 from his elderly mother’s accounts and estate was forced to repay the money, with interest, after suggesting his sister’s share was just $29,704. Sadly, his mother’s Will divided the estate equally between the siblings. Not informing the bank of her death for a year and misrepresenting her Will were just the tip of his legal misdeeds.

What is Considered Unreasonable?

Ontario courts may consider executor fees unreasonable if your estate trustee is guilty of:

• robbing the accounts
• treating assets as their own
• converting agreements for their own benefit
• refusing to give beneficiaries a proper record of decisions
• or acting as if estate affairs are “none of the court’s business.”

All have resulted in zero compensation being awarded.

Why You Need a Lawyer

Axess Law’s probate lawyers help rid estates of executors engaged in misconduct or not taking steps needed to disburse assets in a fair or timely way. You can:

Object to an Executor’s Appointment
Beneficiaries may try to block an estate trustee’s appointment, even if the Will explicitly names a personal representative. Our licensed legal professionals can refer your executor or beneficiaries to our trusted legal partners if a dispute arises.

Who to appoint estate trustee.

Have a Court Review Estate Finances

Executors who already have a certificate of appointment can be forced to provide an Ontario probate court with a financial accounting of their actions (called “passing the accounts”). Our trusted legal partners can help with filing a notice to pass the accounts to a court for review.

Challenge the Accounts

Anyone with a financial interest in an estate can disagree with the accounts. Axess Law’s legal partners can draft a notice of objection for beneficiaries or others who want to challenge an executor’s management of estate assets.

Review the financials when you question an executor’s decisions.

Appoint a Substitute or Alternate Executor

Potential executor problems may be stopped before they start by appointing multiple or substitute estate trustees in your Will. Having more than one executor delegates essential tasks that can be time consuming or burdensome to perform — and ensures your beneficiaries have an extra set of eyes on what is going on.

Hire a lawyer to draft a professional Will in Ontario.

Ask Axess Law if you want to appoint alternate executors. We write new Wills that give estate trustees the option of withdrawing without feeling they let you down.

Executor of Estate, What Now?

If you’re new to administering an estate, Axess Law files a certificate of appointment of estate trustee with a Will to allow you to act on the deceased’s behalf. Even if the deceased died without an Ontario Will, you may be able to legally distribute their estate, provided you have a probate court’s permission.

Get legal authority to be an estate trustee (Ontario only).

Flat Fee Legal Services You Can Afford

Most importantly, Axess Law charges for only the legal services you absolutely need. Our flat fee legal services for Wills and estates start at only $199.99 and up plus HST ($149.99 each and up plus HST for couples) to make a new Will.

Including power of attorney for personal care and property with a Will starts at just $249.99 and up plus HST for virtual Wills — that’s a Will and two powers of attorney for just one low fee. Or pay a little more — $299.99 plus HST and up — to meet with us in person.

Why you need a power of attorney.

Married, separated, divorced or new children on the way? Axess Law prepares a new Will that protects your family’s legal and financial interests any time your circumstances change.

And if you’re the estate executor, your first probate consultation is free!

Are virtual notaries legal?

Make Appointments Online or By Phone

Start your new Will or probate consultation by booking virtual online video calls or make an in person appointment at any of our Axess Law locations. You can make appointments in minutes with our online booking form or speak to our staff in person by calling our 647-479-0118 lawyer line (toll free to 877-402-4277).

Onsite parking and transit access make getting here easy. We have lawyers near you in Toronto, Greater Toronto Area or Ottawa. Our law offices are open 7 days a week, with convenient day or evening appointments. And if you prefer to stay in, we can go online with you anywhere in Ontario. Our virtual lawyer services are secure and confidential.