Executor Compensation and Fees (QC)Show Table of Contents
If the will does not specify how executor compensation should be calculated, QC estates must follow provincial compensation rules (see QC calculator below).
How Much Should an Executor be Paid in QC?
In Quebec, an executor is known as a "liquidator".
If liquidator remuneration is not specified by the will, then all the heirs must agree to the amount, or failing that, the court must approve it (see CCQ-1991 § 789).
The Civil Code of Quebec states that a liquidator is entitled to remuneration corresponding to common practice or the value of services rendered (see CCQ-1991 § 1300).
Factors commonly considered in determining an appropriate amount include:
- Size of the estate (and the results obtained)
- Experience and capabilities of the liquidator
- Nature of the work involved (time, effort, difficulty, skills required)
- Compensation customarily charged (in the community for similar services)
- Whether the liquidator shared expected fee structure and amounts with the heirs beforehand
It's common in QC to use a "services-rendered" approach, and bill by the hour, often $45 - $65 per hour for standard succession work. It's also acceptable to set fees as a percentage of the overall succession value (the preferred approach throughout the rest of Canada). If setting fees as a percentage of succession, it's common to charge 3-5% of the assets handled by the liquidator: the larger the succession, the smaller the percentage fee, and the more effort and results, the greater the percentage. See also Spiegel Sohmer Research.
So for example, a liquidator who spent 420 hours settling a $600,000 succession might charge $25,200 if calculating fees by the hour, or $25,500 if calculating fees as a percentage of assets (the calculator below allows you to explore a number of scenarios).
Note: If the liquidator is an heir, then either the will must specify the compensation, or all the heirs must agree ... the court will not set an amount or allow such remuneration otherwise (see CCQ-1991 § 789). However, just because someone is bequeathed something in a will does not make them an official heir: only someone who shares in the residuary estate is considered an heir in this regard (see CCQ-1991 § 619).
QC Compensation Calculator
EstateExec provides the following executor compensation estimator for Quebec successions, but please keep in mind that there are no hard and fast rules for QC successions, and ultimately you and the heirs (or the courts) must determine what would be reasonable for your particular circumstances. By using this estimator, you acknowledge that EstateExec provides any results as informational input only, not as legal advice, and cannot be held responsible for any inaccuracies for, or misunderstandings about, any given succession.
Below EstateExec provides two compensation approaches: you can decide which, if either, is appropriate for you. The first uses a sliding percentage scale based on the total estate gross value (the larger the estate, the smaller the percentage), and is the more common approach throughout Canada; the second simply compensates the executor for the value of his or her time, and may be the more common approach in Quebec. See estimation methodology for details.
See also Compensation for general remarks on executor compensation.
Executor Compensation Considerations
Timing: Generally, any executor compensation is paid during the final stages of estate distribution, as one of the last things the executor does. Be careful in situations in which there is not enough to pay yourself and all other outstanding debts, as this may expose you to legal issues. However, in most provinces, executor compensation has precedence over almost all other debts.
Communication: You may wish to discuss your compensation with the other heirs early during the process, so they don't end up surprised and unhappy when they notice their shares are somewhat less than expected. You may also want to leave the door open to modify your planned compensation as the process unfolds and you determine how much or how little work will actually be required on your part.
Optional: Keep in mind that collecting executor fees is optional. Even if the will specifies compensation, or if province laws support specific fees, the executor can choose to forego that compensation, and many do. That being said, serving as an executor is A LOT of work, and there's a reason that province laws support such compensation.
Tax Optimization: Executor compensation is considered income to the executor, so acting for the estate, you must deduct CPP and income taxes from any compensation payment, submit those deducted funds to the CRA, and issue a T4-slip to yourself by February 28 of the year following the payment. (see Employer's Guide (Publication T4001)). Keep in mind that there may be some situations in which it is financially beneficial to the executor to forgo any fees. Since executor compensation is taxable, and inheritances are generally not taxable, if the entire estate (or a large portion of it) is going to be inherited by the executor, you may end up with more after-tax value if you forgo explicit executor compensation. On the other hand, if the will does not explicitly address compensation and you forgo executor fees, the CRA may decide that some bequest in the will was in lieu of such compensation, and tax you on that bequest.
Trusts: Note that trustee compensation for managing a trust is handled differently than that of executor compensation for settling an estate (see Trustee Compensation).
Reimbursement: An executor is also entitled to reimbursement from estate proceeds for legitimate and reasonable estate administration costs, such as death certificate copies, notarization of documents, the EstateExec licensing fee, and even travel costs strictly associated with managing the estate. Once you have established an estate banking account, you can often pay for these costs directly from that account, so that no reimbursement is necessary, but you should keep good records in case you later have to justify your expenditures to the CRA or to estate heirs. Executor expenses can be reimbursed when desired, although certain probate or court-supervised proceedings may require prior approval. While executor expenses are generally not considered when calculating executor compensation (i.e., executor fees), if the executor incurs substantial costs paying for services that would normally be directly handled by an executor, a probate judge may sometimes require that the default executor fee be reduced accordingly.