Is executor compensation mandatory in Canada?
No. An executor may waive compensation entirely, which is common when the executor is also a beneficiary (since compensation is taxable income, whereas inheritance is not). If the will sets a specific compensation amount, that governs. If the will is silent, the executor can negotiate with the beneficiaries or apply to the court to pass accounts and have compensation fixed by a judge.
How does Ontario calculate executor compensation?
Ontario's Trustee Act formula allows: 2.5% on all capital receipts (assets coming into the estate), 2.5% on all capital disbursements (assets paid out), and 2/5 of 1% of the average annual value of assets under administration per year of ongoing management. This formula is a ceiling — courts can reduce it if the executor's work was minimal. For a $500,000 estate fully distributed in one year, the formula gives approximately $25,000.
Can beneficiaries dispute the executor's compensation?
Yes. Beneficiaries can object to executor compensation during the passing of accounts — a court process where the executor presents a formal accounting of all receipts, disbursements, and proposed compensation. A court can reduce compensation if the executor was negligent, charged too much for simple work, or failed to follow the will. In Ontario, passing of accounts is mandatory if a beneficiary demands it.