When Can an Executor Take Compensation in Alberta?

Jun 23

3 min read

Woman in a kitchen shows an Estate Final Accounting document to a man beside a laptop, with papers and calculators on the table.

Serving as an executor is a significant responsibility. Executors often spend months—or even years—administering an estate, dealing with banks, preparing tax returns, gathering assets, communicating with beneficiaries, and resolving legal issues. It is therefore reasonable for an executor to be compensated for their work.

A common question we hear is: Can an executor pay themselves compensation before the estate administration is complete?

The answer is: sometimes—but only if the proper steps are followed.

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Start by Reviewing the Will

The first step is always to carefully review the deceased's will.

Some wills contain specific clauses dealing with executor compensation. The will may:

Authorize a fixed dollar amount;
Authorize a percentage of the estate;
Permit interim compensation during administration; or
Eliminate the executor's right to compensation altogether.

If the will contains clear instructions regarding compensation, the executor must generally follow those instructions.

If the Will Is Silent, Compensation Must Be Reasonable

Many Alberta wills do not specify how much an executor should be paid.

In those situations, the executor is generally entitled to claim reasonable compensation for the work performed. The amount depends on factors such as:

The size of the estate;
The complexity of the administration;
The time spent by the executor;
The skill and responsibility involved; and
The results achieved.

Alberta courts frequently consider the compensation guidelines found in the Surrogate Rules when assessing whether a proposed fee is reasonable.

Track Your Time and Effort

An executor who intends to claim compensation should maintain detailed records from the beginning of the administration.

Good records include:

Dates and descriptions of tasks completed;
Time spent on each task;
Meetings attended;
Communications with beneficiaries;
Financial transactions handled; and
Any unusual complications encountered.

Detailed records make it easier to justify the compensation claim and reduce the likelihood of disputes with beneficiaries.

Can an Executor Take Compensation in Alberta Before the Estate Is Distributed?

An executor should be cautious before paying themselves compensation from estate funds.

In many cases, interim compensation may be appropriate, particularly where the administration will take a long time. However, before taking any funds, the executor should:

Calculate the proposed compensation;
Prepare a detailed Executor Compensation Schedule;
Provide supporting records;
Obtain written approval from all residual beneficiaries; and
Obtain signed Releases confirming agreement with the proposed compensation.

Written consent from all affected beneficiaries can significantly reduce the risk of later disputes.

What If a Beneficiary Objects?

Beneficiaries do not have to agree with the compensation proposed by an executor.

If one or more beneficiaries object, the executor should generally avoid paying themselves the disputed amount. Instead, the executor may need to apply to the court for a formal passing of accounts.

During a passing of accounts, the court reviews:

The executor's administration of the estate;
The executor's financial records;
The proposed compensation; and
Any objections raised by beneficiaries.

The court will then determine the amount of compensation that is fair and reasonable.

Important Rules Executors Should Remember

Estate Debts and Taxes Come First

Before taking compensation, an executor should ensure that all known debts, taxes, and administration expenses have been addressed.

Taking compensation too early can create problems if unexpected liabilities later arise.

Compensation and Reimbursements Are Different

Executors are generally entitled to reimbursement for legitimate out-of-pocket expenses incurred while administering the estate.

Examples include:

Legal fees
Court filing fees;
Courier charges;
Land title fees;
Accounting fees paid personally; and
Travel expenses related to estate administration.

These reimbursements are separate from executor compensation and should be documented separately.

Executor Compensation Is Taxable Income

Unlike inheritances received by beneficiaries, executor compensation is generally taxable income to the executor.

Executors should discuss reporting requirements with their accountant or tax advisor.

Overpayments Can Create Personal Liability

If an executor pays themselves compensation that is later determined to be excessive, a court may require repayment to the estate, potentially with interest.

Careful documentation and beneficiary approval can help avoid this risk.

Need Advice About Executor Compensation?

Executor compensation disputes are among the most common sources of conflict in estate administration. Whether you are an executor seeking compensation or a beneficiary concerned about an executor's fees, obtaining legal advice early can prevent costly disputes later.

Our Alberta estate lawyers assist executors with compensation claims, beneficiary approvals, passing of accounts applications, and estate administration disputes throughout Alberta.