Compensation For Personal Representatives

Are personal representative of estates entitled to compensation?

In Alberta, personal representatives may receive fair and reasonable compensation for their responsibility in administering an estate by performing the personal representatives’ duties.

Compensation paid to a personal representative is for all the services performed to complete the administration of the estate, including distribution of the estate.

How much compensation is the personal representative entitled to?

There is hard and fast rule for determining an representative’s compensation, except that the amount must be reasonable from both the point of view of the personal representative and that of the beneficiaries in the light of the circumstances of the particular case. While the court will regularly use a percentage of the value of the estate, this will not be appropriate where the amount of time and effort expended by the personal representative is not commensurate with the percentage.

In Alberta, compensation for personal representatives is determined with reference to factors including:

  • the gross value of the estate;
  • the complexity of the work involved and whether any difficult or unusual questions were raised;
  • the amount of skill, labour, responsibility, technological support and specialized knowledge required;
  • the time expended;
  • the number and complexity of tasks delegated to others.

Additional compensation may be allowed when personal representatives are called upon to perform additional roles in order to administer the estate, such as exercising the powers of a manager or director of a company or business; encounter unusual difficulties or situations; or must instruct on litigation.

If the compensation payable to the personal representative is fixed in a will, no greater amount can be charged or allowed unless the fixed amount is varied by agreement among the affected beneficiaries or by order of the court.

When would a personal representative’s compensation be reduced?

In certain circumstances, such as the failure to keep proper accounts and gross indifference to fiduciary obligations, remuneration will be denied or reduced.

Special costs can be awarded by the courts against an executor or trustee personally where breach of trust, breach of fiduciary duty or other wrongdoing is established sufficient for such punishment as there is no reason why the estate should bear the costs to which the executor has put the estate.

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