Does a beneficiary have to approve the executor's fee?

Yes. Before the executor distributes the estate, they have to give the beneficiaries a final accounting of their administration of the estate, including any fee they're charging. And the beneficiaries must approve the accounts before the executor can proceed. See step 9 in the steps to settle an estate.

The deceased’s will may specify a fee the executor is allowed to charge. If it doesn’t, BC law says that the executor can charge a “fair and reasonable allowance” of up to 5% of the value of the estate’s assets (plus 5% of any income the estate earns and an annual 0.4% care and management fee). This is a maximum amount. It is unusual for a court to award a full 5% fee to an executor, except in very difficult and lengthy administrations. 

When determining how much to award, a court considers that the executor’s fee must be consistent with the effort and responsibility involved in the administration. Courts will examine several factors in a deciding whether a fee is fair and reasonable, including:

• the size of the estate

• the time investment required

• the skill and ability displayed

Here’s an example of a case applying these factors to award an executor’s fee on the low end of the scale.

Often, executors handling the administration of a family member or friend’s estate won’t charge a fee at all. They may view collecting a fee as depleting the inheritance of others, like any children or grandchildren.

Where the executor and beneficiaries can’t agree on a fee, the dispute may have to be settled by the court. Going to court is expensive and will delay settling the estate, so it’s best to try to resolve the issue informally. Check out this guidance on accounting to beneficiaries for more on the topic.