Practice Management Considerations: Estate Trustee Records and Compensation

It is imperative for lawyers acting as estate trustees or under a power of attorney to keep thorough and accurate records. There is a duty at common law and under the Trustee Act for estate trustees, executors, administrations, and guardians to keep complete and accurate accounts of the assets under their administration. A beneficiary is entitled on notice, to inspect the accounts and any of the supporting documentation.

At the outset of any appointment, you should determine what steps you will take to administer the estate and how you will manage and keep records of the estate account(s). You may be required to keep records in court form in accordance with Rule 74 of the Rules of Civil Procedure. If it is beyond your expertise, consider hiring an accountant that specializes in estate accounting.

Trustees, and especially lawyers who are holding funds on behalf of an estate are required to maintain accurate, up to date estate accounts, and organize and keep all source documents such as bank statements, duplicate deposit slips, cancelled cheques, receipt confirmations and vouchers to support the records.

Estate Trustees' are also entitled to compensation. Often the deceased person’s will sets out the estate trustees compensation.

If there is no compensation for the estate trustee set out in the will, the Trustee Act states that the compensation is based on “fair and reasonable allowance for the trustee’s care, pains and trouble and the time expended in or about the estate".

For an estate of average complexity the allowance is usually set at 2.5% for capital receipts, 2.5% for revenue receipts, 2.5% for capital disbursements, and 2.5% for revenue disbursements.