As anyone working in the estate area knows, the task of the personal representative is often onerous. But how much is it worth? The Court discussed how to set compensation for personal representatives in Berry (Re), 2017 ABQB 77, the Court was asked to approve compensation for the personal representatives, two children of the testatrix.
The personal representatives (children of the testatrix) applied to have their accounts approved and to set their compensation, as the will was silent on the matter. The application was opposed by their sister, Ms. Burniston, who had earlier been removed as personal representative.
The personal representatives requested $64,000 as compensation, which was 3.5 percent of the gross capital value of the estate. Ms. Burniston had received $10,000 in compensation during the period she was personal representative and argued that her siblings were only entitled to the same amount.
The Court granted the compensation requested by the personal representatives. The Court noted that, although guidelines are not determinative, the amount was within the guidelines commonly used in Alberta. The decision includes a review of the guidelines to establish executor and trustee compensation and suggests Alberta may want to adopt such guidelines more formally. As noted by the Court, such guidelines, so long as they were not determinative, could assist in streamlining the probate process, at least for the average situation. The Court went on to consider the statutory factors set out in Section 7 of Schedule 1 of the Surrogate Rules and concluded that the compensation requested was fair and reasonable.
In rejecting Ms. Burniston’s specific argument that her siblings should be limited to the compensation she had received, the Court stated that while equity approves of like being treated as like, in this case the siblings were not alike in their management of the estate, as the personal representatives had managed the estate for twice as long as Ms. Burniston and had done more to ensure the estate was wound up effectively. The Court held that personal representatives should not have their compensation reduced for engaging lawyers to do “lawyerly tasks”. It is only where the personal representatives delegate a lawyer to do tasks that a layperson could perform that their compensation should be reduced due to the delegation.
It will be interesting to see what impact, if any, the Court’s comments on the utility of compensation guidelines will have.