At Gale Law, we specialize in estate litigation and provide expert legal support to both estate trustees and beneficiaries. Whether you’re seeking appointment as an estate trustee, need to remove one, we are here to help. We guide trustees through their duties and responsibilities, including passing of accounts, and offer effective strategies for those looking to challenge or remove a trustee. For beneficiaries, we ensure their rights are fully understood and protected, helping them navigate disputes over estate distributions. Our team is dedicated to helping clients with the complexities of estate administration, ensuring fair and equitable outcomes.
What is an Estate Trustee?
An estate trustee (sometimes called an “executor”) is a person who has the legal power to distribute or manage the estate of a deceased person.
In cases where there is a will, the will usually appoints (names) the individual whom the deceased decided to act as their estate trustee. Estate trustees owe a fiduciary obligation to the estate, meaning that they owe the legal obligation of acting in the best interests of the estate.
The responsibilities of an estate trustees include, but are not limited to:
⦁ Finding the will (if any);
⦁ Applying for probate (if the deceased person did not have a will);
⦁ Making funeral arrangements;
⦁ Paying taxes and liabilities, filing all taxes, applying for and receiving a clearance certificate (it is recommended to hire an accountant);
⦁ Selling the property for the best price possible;
⦁ Distributing the property to the beneficiaries per the will or laws of intestacy and ensuring the distribution of the estate is done in a reasonable time frame (typically around one year);
⦁ Keeping an accounting (documentation of financial transactions) and providing updates to beneficiaries.
Can Estate Trustees Receive Compensation?
Acting as an estate trustee is a time-demanding and important job for an individual to take on. In general, estate trustees have the right to be paid for their work, unless otherwise stated by the will. A will might indicate the testator’s (person writing the will) own wishes as to how they would like for an estate trustee to be, or not be, compensated.
One common approach to calculating the compensation of an estate trustee fees is to use the “Usual Percentages” method. While this approach is not mandated by law, it serves as a general guideline that can be adjusted based on circumstances or replaced with an alternative method, such as fees based on the actual time spent (docketed time).
In Ontario, the typical breakdown for trustee fees is as follows:
- Capital receipts (e.g., savings accounts): 2.5%
- Capital disbursements (e.g., payments to beneficiaries): 2.5%
- Revenue receipts (e.g., income from investments): 2.5%
- Revenue disbursements (e.g., cheque processing fees): 2.5%
This amounts to roughly 5% of the total value of the estate. Additionally, there is an estate management fee, which is typically 0.4% per year of the average annual value of the estate’s assets (calculated as 2/5 of 1%).
The court is placing greater emphasis on requiring evidence to justify the compensation estate trustees are requesting. This evidence includes time dockets, length of administration (how long it took to give out the estate), complexity of estate, skill needed, and results obtained.
While the usual percentages approach is ideal for simple estates, for more complex estates, the estate trustee may consider requesting a “Special Fee”. A special fee is usually asked for if there were business interests among the estate assets or the estate has been involved in litigation, and the estate trustee has had to make decisions on behalf of the estate.
To receive compensation, an estate trustee must either have the agreement of all beneficiaries or obtain court approval through a passing of accounts application.
Pre-taking compensation is generally subject to judicial sanction (legal punishment( unless authorized by the testator in the will or through a prior compensation agreement with the executor (Re Knoch). Importantly, if an estate trustee pre-takes compensation that exceeds the amount approved by the court, they may be required to repay the estate, plus interest.
Can I Remove an Estate Trustee?
Once an estate trustee is granted probate (appointed) by a court, the process to remove them becomes more difficult.
Any individual that holds a financial interest in the estate is able to apply for the Court for relief such as removing the estate trustee as per s.37(3) in the Trustee Act. The Court will consider factors such as whether the estate trustee was specifically requested by the deceased’s will and if the best interests of the beneficiaries are being represented in the estate trustee’s actions, as expressed in Johnston v Lanka Estate, 2010 ONSC 4124.
Evidence showing that the estate trustee is failing to act in line with the law or instructions of the will, or improper actions is required. You may seek for them to pass their accounts (ask for them to bring a court application and show the court their financial actions) in order to verify if there are any irregularities or errors with the accounts.
In some scenarios, removal is not always necessary. For example, if there is a disagreement between a beneficiary and the trustee, it is possible to request for a person not related to the dispute to temporarily step in as the estate trustee while the dispute is ongoing; this person is known as an Estate Trustee during Litigation (ETDL).
Some reasons why the removal of an estate trustee might be requested include:
- The Estate Trustee is not able to act in the best interest (fiduciary duty) of the estate
- Conflict of Interest: The estate trustee is biased in their decisions because they are unable to be impartial (e.g., they are a creditor of the estate and are owed money although this doesn’t always mean they can’t still be neutral)
- Failing to maintain proper accounts and records.
Frequently Asked Questions
Being named means the deceased intended for you to inherit part or all of their estate. Your share will be outlined in their will. Sometimes there are conditions, like needing to reach a certain age, or a backup beneficiary (contingent beneficiary) named if you can't inherit.
This is when someone names you directly on assets like a TFSA, RRSP, pension, or insurance plan. These assets bypass the estate entirely, meaning they’re not handled by the estate trustee and aren’t subject to probate or estate administration tax.
Yes—a minor can inherit. However, since they can't legally manage the property, the estate trustee holds it in trust until they reach the age of majority or the age specified in the will. In some cases, funds may be kept in court, and a court-appointed guardian might manage it for things like education or care.
Beneficiaries are owed transparency. They have the right to be kept informed and to see a detailed accounting of estate finances. If there are concerns, they may formally object to how things have been handled.
A “passing of accounts” is a formal court audit. The estate trustee presents an accounting of assets and transactions to the court and beneficiaries. The court then approves, modifies, or rejects this accounting, ensuring everything was handled properly
Not always. However, it's needed if there are minors or mentally incapable beneficiaries, or if there's a dispute—like objections to compensation or accounting. Beneficiaries can also force a passing of accounts if needed
If an estate trustee distributes assets before taxes are paid, they could be on the hook personally—up to the amount distributed. Obtaining a “Clearance Certificate” from the CRA confirms taxes are paid and protects the trustee from personal risk.
Those assets—like life insurance or registered plans—don’t go through probate, aren’t taxed through the estate, and are given directly to the named beneficiary, without involvement of the estate trustee.
Absolutely. If a beneficiary has concerns—whether about missing information, mismanagement, or excessive fees—they may file an objection. In serious cases, they can even seek the trustee’s removal or force a passing of accounts.
Yes. Trustees are often entitled to compensation—for example, standard rates around 2.5% for receipts and disbursements, plus a small annual management fee. To claim compensation, trustees need either beneficiaries’ written consent or court approval via passing of accounts.
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