Estate Administration & Executor's Compensation: What You Need To Know

Executor's compensation is an important consideration in estate planning, as it can impact the value of the estate and the beneficiaries' entitlements. It is important for a Will to specifically address the issue of executor's compensation, either by indicating a specific amount or method for calculating the fees. If the Will is silent on this issue, statutory legislation and the court will determine what is "fair and reasonable" compensation based on several factors, such as the estate value, complexity of the work involved, and executor's time and expertise.

Taxation of Executor's Compensation

Executor's compensation is considered taxable income by the Canadian Revenue Agency and is classified as employment income. The estate is responsible for making the appropriate payroll deductions and filings, including income tax, Canada Pension Plan, and Employment Insurance contributions.

Addressing Executor's Compensation in Estate Planning

Properly addressing executor's compensation in estate planning can help reduce the risk of costly litigation and maximize the value of the estate for the beneficiaries. It is important for individuals to work with a qualified estate planning professional to ensure that their Will addresses this and other important considerations.

For additional information on this or any other Estate-related matter, feel free to contact our E is for Estate team. CONTACT US HERE

Erin Watson, J.D. E is for Estates