When a person acts as the Executor of a Deceased’s Estate, they are entitled to be paid for their work.
Section 88 of the Trustee Act provides that an Executor is entitled to a “fair and reasonable allowance” from the Estate for their care, pains and trouble, and time spent administering the Estate. However, the fee must not exceed 5% of the gross value of the Estate.
In determining what is a fair and reasonable fee, the following factors will be considered:
- The size of the Estate;
- The care and responsibility involved;
- The time occupied administering the Estate;
- The skill and ability displayed by the Executor; and
- The success achieved in the final result.
In all the circumstances, the compensation claimed must bear some reasonable relationship to the work and responsibility involved.
While section 88 states that the maximum allowable fee is 5% of the gross value of the Estate, maximum remuneration is not awarded as a matter of routine. This is especially true if the Estate has not yet been fully administered. Further, an Executor’s fee need not be fixed at a specific percentage of the value of the Estate (although this is the common practice). Rather, an Executor’s fee can be calculated at a lump sum providing, of course, that that lump sum does not exceed 5% of the value of the Estate.