The Effect of a Charging Clause on a Professional’s Fees

Testators often choose professionals such as lawyers or accountants to act as their executor because professionals possess useful skills. Many lawyers and accountants have experience dealing with the issues that arise in estate administration. Recognizing this, the testator sometimes includes a “charging clause” in the Will. This allows the professional to charge his or her professional fees for estate-related work. Against this background, an issue that arises is the relationship between the fees for professional services such as accounting and legal advice provided to the estate and fees for services that are normally expected from an executor.

It is well established that where there is a charging clause, the executor is paid separately in each of his professional and his executor capacities.  Compensation is, therefore, divided into compensation for professional work and compensation for executor work. Compensation in one category will not directly impact upon compensation in the other. They are separate considerations. Fees for professional work are paid as if someone other than the executor had performed that work.

There are grey areas; it is not always clear what is professional work and what is executor work. The professional should keep detailed time records with respect to all work and categorize it accordingly. The professional is in the best position to know what work required his or her professional expertise. Detailed time records will help convince the court or Registrar, if that becomes necessary.  However, it is equally important for the executor to provide to the beneficiaires on-going and accurate information about the professional charges he or she intends to claim, and to allow the beneficiaries the opportunity to seek further information and answers from him during the course of the administration.

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