Executor fees in Alberta are informed by the ESTATE ADMINISTRATION SUGGESTED FEE GUIDELINES, established in 1995 by the Surrogate Rules Committee. While they aren't mandatory, the Surrogate Court often utilizes them as a reference to determine a reasonable executor fee.
Capital-Based Fees:
- 3% to 5% on the initial $250,000 of the estate's value.
- 2% to 4% on the following $250,000.
- 0.5% to 3% on any excess amount.
Revenue-Related Compensation:
For executors managing assets that generate revenue, compensation is typically 4% to 6% of the income produced for the estate.
Asset Management Fees:
When executors are entrusted with the care and oversight of estate assets, the proposed charges are:
- 0.3% to 0.6% for the first $250,000.
- 0.2% to 0.5% on the subsequent $250,000.
- 0.1% to 0.4% on any residual amount.
Additional Tasks Compensation:
Executors can also be eligible for supplementary fees for specialized tasks that fall outside standard responsibilities, such as wrapping up a business, filing tax returns for the estate, or assuming a managerial position in an estate-owned business.
It's pivotal to recognize that while these guidelines give a general framework, they're not set in stone. It's advisable for executors and beneficiaries to reach a consensus on fees, taking into account both the guidelines and the specific nuances of the estate in question.
Are Percentage Fees Set in Stone?
In Alberta, the matter of executor compensation is less about rigid percentage benchmarks and more about the unique characteristics of each estate.
To shed light:
Alberta's Surrogate Rules (Alta Reg 130/1995, s 137) provide that personal representatives or executors may be entitled to "fair and reasonable" compensation. This is determined by evaluating their dedicated efforts, responsibilities, and the overall time invested in administering the estate.
Here are some of the factors that might be considered for compensation in Alberta:
- Capital Receipts: Funds derived from the sale of assets.
- Capital Disbursements: Costs associated with improving or maintaining estate assets.
- Revenue Receipts: Income generated from offerings, be it services or goods.
- Revenue Disbursements: Costs incurred in the course of estate management, such as staffing or procurement.
While some regions may lean on standardized percentages, like a 0.4% management fee, Alberta emphasizes the individual attributes of each estate. No two estates are identical, and hence, compensation assessments are tailored to fit their unique challenges and complexities.
For instance:
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(A) An estate predominantly comprising a single real estate property might warrant an executor fee lower than 5%, given its relatively straightforward attributes.
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(B) In contrast, an expansive estate, with beneficiaries in various locales and multiple assets, could justify an executor fee potentially higher than 5%, taking into account its nuanced demands and intricacies.