Personal Finance

Executor mileage question

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  • Feb 16th, 2018 7:58 pm
[OP]
Deal Addict
Aug 30, 2011
3462 posts
1221 upvotes
Ottawa

Executor mileage question

I'm executor for my uncle's estate, and have been tracking my time and mileage because the lawyer had suggested that I claim my personal costs. I didn't do this when I was executor for my aunt. If anyone here has done so, how did you calculate the cost to claim for your mileage and time? This is a complicated estate, with non-resident beneficiaries. I will be preparing the final return, but not the trust return.
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Mar 9, 2012
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Kitchener
OttawaGardener wrote: I'm executor for my uncle's estate, and have been tracking my time and mileage because the lawyer had suggested that I claim my personal costs. I didn't do this when I was executor for my aunt. If anyone here has done so, how did you calculate the cost to claim for your mileage and time? This is a complicated estate, with non-resident beneficiaries. I will be preparing the final return, but not the trust return.
If I recall correctly, you get 3% from the estate net value, for your time. Anything else, like gas, keep receipts and deduct from estate.

I know my mom was an executor it what she got was hardly anything ($200), and she wasn't even related, but did a crap load of work. The estate wasn't worth a lot in the end, like under $7,000. (Though in my moms case, an a living executor, should was supposed to take 3% per year, not just final).

Oh, and take off your expenses BEFORE you take off that 3%, IIRC, that's how it's supposed to be done.

So let's say his estate is $202,000. Minus your costs (This wasn't an issue with my mom, as she was a living executor and had access to the estate banking), so keep paperwork of all expenses. So let's say that's $2,000, now estates value tis $200,000. You're entitled to 3% of that. Regardless if you spent 20 hours on this or 500 hours. So you get $6,000.

Of course, this is all "if i recall correctly". Unsure if my mom being a living executor made a difference. I am also unsure if their is a min/max as to what you can collect.
Why can't we all just get along?
[OP]
Deal Addict
Aug 30, 2011
3462 posts
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Ottawa
Thanks for the quick response. Do you mean your mom was a beneficiary? Not sure what you mean by " living executor".

For the mileage, I was thinking of a "cents/kilometer" calculation, since a gas fill up can't all be allocated to this activity. The estate is about $850,000, so I wouldn't want a high percentage, maybe 1% or .05%?
Member
Mar 14, 2010
279 posts
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Toronto
Not a direct answer to your question but something to consider: If you charge the estate for your time and expenses, the money you receive is taxable. If your uncle has left money for you in the will, the bequest is not taxable to you. Many people include the executor as a beneficiary of the will to recognize the time and expense of executing a will without creating a tax burden for the executor.

Most duties of an executor can be conducted by mail and by phone. Do you estimate that your costs will be so high as to justify the extra time and tax hit of claiming your expenses from the estate? If you are a beneficiary as well as executor, you might choose to forgo compensation for your time and mileage, especially if charging the estate might create bad feelings within the family ( whose inheritance might be reduced by the cost of your expenses.

It's your choice. As to how to calculate your costs if you decide to claim, you set a fee for the work and keep a paper trail of the mileage and hope that another relative doesn't challenge your bill. This is less likely, of course, if you are not a beneficiary.
[OP]
Deal Addict
Aug 30, 2011
3462 posts
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Ottawa
pickles02 wrote: Not a direct answer to your question but something to consider: If you charge the estate for your time and expenses, the money you receive is taxable. If your uncle has left money for you in the will, the bequest is not taxable to you. Many people include the executor as a beneficiary of the will to recognize the time and expense of executing a will without creating a tax burden for the executor.

Most duties of an executor can be conducted by mail and by phone. Do you estimate that your costs will be so high as to justify the extra time and tax hit of claiming your expenses from the estate? If you are a beneficiary as well as executor, you might choose to forgo compensation for your time and mileage, especially if charging the estate might create bad feelings within the family ( whose inheritance might be reduced by the cost of your expenses.

It's your choice. As to how to calculate your costs if you decide to claim, you set a fee for the work and keep a paper trail of the mileage and hope that another relative doesn't challenge your bill. This is less likely, of course, if you are not a beneficiary.
I'm not a beneficiary. Before he died, my uncle said that I should "take something for my trouble".

I needed to deal with the contents of his retirement home and with the Funeral home. There are two banks, and many investments/mutual funds. Also, I've had to open a CRA non-resident account, and determine the % of withholding (15% for UK residents on the non-registered investments). There seems to be lots of running around to the banks, and paperwork. I realize that any portion I claim as expenses is not taxable, but an executor fee is.

I don't want to create bad feelings for the beneficiaries - I know his daughter, but not his son. Both live oversees and are in their 70s.

I can't see how being executor can be conducted by mail and phone, to be honest. I did all this for my aunt's estate and most of it was done in person.
Jr. Member
Dec 25, 2015
154 posts
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Brighton, ON
Your lawyer can advise what is allowable as an executor fee in your province, if the will doesn't state anything. But as stated above, your fee is considered income for tax purposes.

As for travel expenses, I used the prescribed rate as listed on cra website...
here
Keep a mileage log for your vehicle.
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Jan 27, 2007
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Peterborough
If you are taking mileage, just use the CRA prescribed rate.
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Kitchener
OttawaGardener wrote: Thanks for the quick response. Do you mean your mom was a beneficiary? Not sure what you mean by " living executor".

For the mileage, I was thinking of a "cents/kilometer" calculation, since a gas fill up can't all be allocated to this activity. The estate is about $850,000, so I wouldn't want a high percentage, maybe 1% or .05%?
Sorry..wrong expression with "living executor", should have read "Power of Attorney" then went into executor when the woman died. It was a friend of hers, and her family didn't want to help out, at all. My mom was NOT a benefactor and I believe the money went elsewhere.

As for what you're allowed, again, my mom was told 3% of estate. You can take less if you want. As others mentioned, this is taxable income. And really think of the time you're spending, and what the morally correct thing to do is. Old expression, what goes around comes around. So if it's a large estate, better to keep things reasonable.
Why can't we all just get along?
Member
Mar 13, 2012
338 posts
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Sarnia
This might be worth your while to read as regards mileage. postal, other communication expenses. As far as reimbursement for your time, I have the impression that is what the executor fee already mentioned is intended to compensate. BTW, the link is to an excellent blog on Canadian estate matters.
[OP]
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Aug 30, 2011
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Ottawa
kellymisty wrote: This might be worth your while to read as regards mileage. postal, other communication expenses. As far as reimbursement for your time, I have the impression that is what the executor fee already mentioned is intended to compensate. BTW, the link is to an excellent blog on Canadian estate matters.
Thanks for that link. I will wait to see how many hours I end up with, and calculate a reasonable fee/hour rather than a % of the estate.

When my aunt and uncle moved to a retirement home about 6 years ago, with 24 hours notice (they both had falls) I undertook to empty their home of 50 years, as there was no one else to do it. It was time-consuming but kind of fun. Most things went to charity. The house was then sold by a Realtor.
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Jan 27, 2007
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Keep in mind whatever you take is taxable and pensionable for cpp. The estate needs to file a t4 summary.
[OP]
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Aug 30, 2011
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Ottawa
dutchca wrote: Keep in mind whatever you take is taxable and pensionable for cpp. The estate needs to file a t4 summary.
I knew it was taxable but not that Cpp applies. However, if it works out to $3,500 or less, cpp won't apply because of the threshold. Maybe this (getting a fee) is all more bother than it's worth.

Appreciate the feedback from everyone who responded.

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