In my experience, when friends or family members are asked to be an executor, they often consider it an honour. The will maker is often unaware, as is the executor, of the amount of work the duties will demand. Before accepting the appointment, the proposed executor should understand what must be done. He or she should also know that an executor is entitled to receive compensation for all the hard work of administering an estate.

Executors may be entitled to receive compensation whether it has been provided in the will or not. The amount and methods to receive such compensation, however, can vary widely. The primary ways are discussed in this article.

     i) The "Default Position"

Where no arrangements for compensation are made prior to the will maker's death, the Trustee Act of British Columbia provides that an executor may receive three types of compensation: a capital fee of up to 5% remuneration of the gross aggregate value of the estate; an income fee of up to 5% of the annual income; and a care and management fee of .4% of the average value of the estate from year to year.

In determining appropriate compensation for the executor a court would look at several factors, including:

• the magnitude of the estate or trust
• the care and responsibility involved
• the time occupied in the administration
• the skill and ability displayed
• and the success achieved in the final result.

Where compensation under the Trustee Act is claimed, the beneficiaries must approve it before it is paid. If the beneficiaries do not approve, or if there are minor or incapacitated beneficiaries, it will be necessary for an officer of the court to review and approve the compensation sought. This can result in increased costs to the estate.

     i) Compensation set out by Will or by Agreement

A will maker may set out an amount or method of calculating executor's compensation directly in the will or in a separate agreement.

There are several advantages to providing the compensation in the will or by agreement. The primary advantage is that the testator determines what is an appropriate amount. This should, however, always be discussed with the proposed executor, as an executor is not required to assume the duties and may refuse to do so if the compensation is inadequate. .

A clearly defined amount of compensation in the will will also avoid conflict between the executor and the estate's beneficiaries about the appropriate amount of compensation. It will also eliminate the cost of court applications to review compensation.

If you would like to explore how best to choose and compensate your executor, or if you are now an executor and wish to learn more about your entitlement to compensation, we encourage you to seek advice from a wills and estates solicitor.