Legal and Personal Representative Fees

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Surrogate Court Rules

SCHEDULE 1

For the purpose of this Schedule,

1. "core legal services" are the legal services listed in Table 1 of Part 2 normally rendered by a lawyer for the personal representatives in connection with the administration of an estate;
2. "non-core legal services" are legal services listed in Part 2 Table 2 rendered by a lawyer for the personal representative that are in addition to the core legal services required in the administration of an estate;
3. "personal representatives' duties" are the tasks listed in the Table in Part 1 normally required to be performed by a personal representative in the administration of an estate;

4. "time of distribution" means

   • when the estate property is distributable to the beneficiaries immediately on the death of the deceased, the time when distribution to the beneficiaries is complete,
   • the time when the transfer of a minor's property to the minor's trustee is complete, or
   • when the estate property is not all distributable to the beneficiaries immediately on the death of the deceased because trusts delay the final distribution, the time when distribution of immediately distributable property to the beneficiaries is complete, and transfer of the trust property to the trustee is complete.

PART 1

PERSONAL REPRESENTATIVES' COMPENSATION

1. Personal representatives may receive fair and reasonable compensation for their responsibility in administering an estate by performing the personal representative's duties.
2. Compensation paid to a personal representative is for all the services performed by the personal representative to complete the administration of the estate including distribution of the estate and the conclusion of any trusts.

3. A personal representative may receive compensation for the care and management of property in an estate only if:

   • there is no outright distribution of that estate property at the time of death, and
   • the trust is not varied by agreement among the affected beneficiaries or by the court.

4. The following factors are relevant when determining the compensation charged by or allowed to personal representatives:

   • the gross value of the estate;
   • the amount of revenue receipts and disbursements;
   • the complexity of the work involved and whether any difficult or unusual questions were raised;
   • the amount of skill, labour, responsibility, technological support and specialized knowledge required;
   • the time expended;
   • the number and complexity of tasks delegated to others;
   • the number of personal representative appointed in the will, if any.

5. Additional compensation may be allowed when personal representatives

   • are called upon to perform additional roles in order to administer the estate, such as exercising the powers of a manager or director of a company or business,
   • encounter unusual difficulties or situations, or
   • must instruct on litigation.
6. If the compensation payable to the personal representative is fixed in a will, no greater amount can be charged or allowed unless the fixed amount is varied by agreement among the affected beneficiaries or by order of the court.
7. The compensation once determined must be shared among the personal representatives in proportions agreed to among the personal representatives or as ordered by the court.

8. (1) Personal representatives may be paid compensation before completing the administration of the estate if

   • the will provides for it,
   • all the affected beneficiaries agree to it, or
   • the court orders it.

   (2) If all or any part of the amount of compensation paid to a personal representative under subrule (1) is later reduced by the court, the personal representative must repay the disallowed amount immediately to the estate with interest at a rate and for a period set by the court.

9. If a lawyer or other agent performs some or all of the duties of the personal representative, the amount payable to the personal representative must be reduced commensurately.
10. If a personal representative is required to give the beneficiary of an estate an accounting in which compensation to the personal representative is shown, the personal representative must give the beneficiary a copy of this Part.

11. Personal representatives are entitled to reimbursement for expenses properly incurred by them in the administration of the estate, including the following:

    • expenses reasonably incurred by the personal representatives in carrying out their duties;
    • fees or commissions to agents, including lawyers, accountants, real estate agents, security brokers, investment advisors, appraisers, auctioneers and other professionals, engaged to perform estate administration services or to buy or sell estate property.

SUMMARY OF PERSONAL REPRESENTATIVES' FEE RULES

1. The affected beneficiaries or heirs of the estate must approve the fees and expenses for personal representatives' work, or the court must order them.
2. Fees should be set within the suggested ranges according to the criteria set out in Schedule 1 of the Surrogate Rules.
3. The fees and expenses are subject to review by the court which has the discretion to increase or decrease fees or decrease expenses.

4. There are three categories of personal representatives' fees:

   • fees charged on the gross capital value of the estate;
   • fees charged on revenue received by the estate during administration;
   • care and management fees charged in trust estates.

5. All fees may be varied up or down by agreement among the affected beneficiaries or heirs, or by the court.

   Capital account

6. Fees are charged against capital receipts. No fees are charged on capital disbursements.

7. Fees should not exceed 5% of the gross capital value of the estate, unless circumstances warrant a higher fee.

   Revenue account

8. Fees are charged against revenue receipts. No fees are charged on revenue disbursements.

9. Fees should not exceed 6% of the revenue receipts, unless unusual circumstances warrant a higher fee.

   Care and Management

10. Fees for care and management apply only to property being administered in the trust estates where there is no outright distribution of the estate property at the time of death. This may be varied by agreement among the affected beneficiaries or heirs, or by the court.
11. Fees are charged against capital.

12. Fees should not exceed 6/10 of 1% per annum on the average market value of the estate property, unless circumstances warrant a higher fee.

    SUGGESTED FEE GUIDELINES - PERSONAL REPRESENTATIVES

13. Capital

    On the first $250,000 of capital 3% - 5%

    On the next $250, 000 of capital 2% - 4%

    On the balance 1/2 of 1% - 3%

    Revenue

    On revenue receipts 4% - 6%

    Care and management

    On the first $250,000 3/10 - 6/10 of 1%

    On the next $250,000 2/10 - 5/10 of 1%

    On the balance 1/10 - 4/10 of 1%

PART 2

LAWYERS' COMPENSATION

1. A lawyer may charge fees for the following categories of legal services in the administration of estates:

   • core legal services;
   • non-core legal services.

2. A lawyer may charge fees for legal services that involve carrying out personal representatives' duties.

3. (1) The lawyer and the personal representatives must agree to the categories of service that the lawyer will perform and to an arrangement or amount for each category of fees, disbursements and other charges.

   (2) The fees agreed to must cover, up to the time of distribution of the estate,

   • all the core legal services or non-core legal services,
   • any personal representatives' duties required to be performed by the lawyer, and
   • any other services required to be performed by the lawyer.

4. When a lawyer is also appointed as the personal representative under a grant, the lawyer may charge additional fees for any core and non-core legal services performed by the lawyer as a lawyer.

5. The following factors are relevant when determining the fees charged by or allowed to a lawyer:

   • the complexity of the work involved and whether any difficult or novel questions were raised;
   • the amount of skill, labour, responsibility and specialized knowledge required;
   • the lawyer's experience in estate administration;
   • the number and importance of documents prepared or perused;
   • whether the lawyer performed services away from the lawyer's usual place of business or in unusual circumstances;
   • the value of the estate;
   • the amount of work performed in connection with jointly held or designated assets;
   • the results obtained;
   • the time expended;
   • whether or not the lawyer and the personal representative concluded an agreement and whether the agreement is reasonable in all the circumstances.

6. Reasonable costs incurred by a lawyer as disbursements and other charges in performing services in any category are allowed in addition to any fee charged.

7. (1) A lawyer must present a written statement of fees, disbursements and other charges to the personal representative, showing the details of the services performed, together with a copy of this Part.

   (2) If the personal representative is required to give the beneficiaries of an estate an accounting in which legal fees are shown, the personal representative must give them a copy of this Part.

8. (1) The lawyer or the personal representative may have the lawyer's account reviewed by the taxing officer under rules 627 to 658 of the Alberta Rules of Court (Alta. Reg. 390/68).

   (2) The taxing officer or the court may review fees, disbursements and other charges and may increase or decrease any of them.

Summary of Lawyer's Compensation

1. Lawyers' fees and disbursements are a matter of contract between the lawyer and the personal representatives. However, personal representatives may have them "taxed" and the beneficiaries of the estate may call the personal representative to account for the amount of legal fees and disbursements the representative has paid.

2. Fees should be set according to the criteria set out in Schedule 1 of the Surrogate Rules.

3. All fees and disbursements are subject to taxation by the taxing officer and the court who have the discretion to increase or decrease fees or decrease disbursements.

   Fee for Core Legal services

4. The fee consists of two components:

   • a base fee, and
   • an estate value fee.

These may be reduced if the lawyer performs less than the normal core legal services, or by other arrangement.

5. The base fee component:

   • is constant regardless of the value of the estate;
   • reflects the normal core legal services that are required to administer any estate.

6. The estate value fee component:

   • is a further allowance based on a percentage of the gross value of the estate;
   • increases at a point where the size of the estate is likely to introduce more complexity in the administration.

7. When calculating the gross value of the estate, values of the following property are not included:

   • All property held in joint tenancy by the deceased and another person.
   • All property passing directly to a named beneficiary outside the will.
   • Canada Pension Plan payments to a spouse or child of the deceased.
   • Personal property outside Alberta if the deceased's usual residence was outside Alberta on the date of death.
   • Land outside Alberta.
   • All other property which does not pass through the hands of the personal representatives.

SUGGESTED FEE GUIDELINES - LAWYERS

Core Legal Services

Gross Value of Estate Base Fee Estate Value Fee

On estates with a gross value up to $150,000 $2,250.00 1/2 x 1%

On estates with a gross value over $150,000 $2,250.00 1%

Non-Core Legal Services

The fee for non-core legal services is on a quantum meruit basis.

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