Trustees Statutory Compensation

Under s. 61(1) of the Ontario’s Trustee Act, Executors and trustees are entitled to be compensated for their work in the administration of estates.

The testator can also provide for no compensation in the will or specify the amount.

If the will is silent on the compensation or amount, Ontario's Trustee Act can be used for guidance:

The Act contains no specific rules as to the calculation and amount of the compensation. However, the courts generally applies the following tariff, which may only be reduced or increased under special circumstances:

(a) 2.5% to 3% of capital receipts;

(b) 2.5% to 3% of capital disbursements;

(c) 2.5% to 3% of income receipts;

(d) 2.5% to 3% of income disbursements; and

(e) for ongoing trusts, 2/5 of 1% or 3/5 of 1% of the average annual market value of the trust assets as the fee for ongoing care and management, and 5% to 6% of income generated by the trust.

It is preferable that compensation be paid on a regular basis to avoid a heavy tax burden on the trustee and to ensure a more even cash flow in the estate.

The following circumstances are proper to be taken into consideration in fixing the amount of compensation payable to an executor and trustee:

(a) the magnitude of the trust;

(b) the care and responsibility arising therefrom;

(c) the time occupied in performing duties;

(d) the skill and ability displayed;

(e) the success which has attended the trust’s administration.

Landmark Law Professional Corporation may assist in your Wills and Estates planning matters.

Disclaimer: This article does not contain legal advice and only provides general information. It is not intended to replace advice from a qualified legal professional and should not be relied upon to make decisions. In all cases, contact your legal professional for advice on any matter referenced in this article before making decisions. Use of this article does not establish a lawyer-client relationship.

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