Estates & Wills & Trusts

Caregivers entitled to compensation: court

By AdvocateDaily.com Staff

Those who act as executors and attorneys are generally entitled to compensation for performing their duties, says Toronto litigator Matthew Urback.

In a recent Ontario Superior Court case — described by the judge as a rare “good news story” in an application to pass accounts — two caregivers for a wealthy elderly couple were awarded more than $750,000 as compensation for their role as attorneys for property and personal care, as well as for administering the estate of the husband when he died.

According to the decision, the younger couple were friends and neighbours of the older pair and took on the positions of responsibility without ever seeking a cent in return. It was only on the suggestion of the elderly surviving widow that they brought their application for compensation, the judge added.

Urback, a partner with Shibley Righton LLP, says it’s rare to see a formal written decision approving such expenses in an uncontested case, adding the involvement of an institutional trustee may have necessitated the hearing.

“We’re used to a more adversarial approach, so it was very interesting to see the judgment laid out that way,” he tells AdvocateDaily.com.

The decision is particularly notable for drawing attention to the legal regime surrounding compensation for attorneys, Urback adds.

“Irrespective of whether the issue has ever been discussed between the parties, statutory and common law make it clear that attorneys for property and personal care are entitled to claim compensation for the work they do,” he says. “Most people know that estate trustees can be compensated for their work administering an estate, but it’s easy to overlook the entitlement of attorneys.”

According to Urback, a rule of thumb employed by practitioners in the area suggests that attorneys for property can claim roughly three per cent of receipts and disbursements, in addition to a management fee of 0.6 per cent for assets under their care.

“That’s not a trivial amount, especially when you’re talking about people handling large amounts of money for people with high-value estates,” he says.

The situation is less straightforward when attorneys for personal care are involved, but the same basic principles apply, says Urback.

“The amounts are harder to quantify because you can’t just take a percentage of assets. But there is a line of cases that says courts can fix an amount for compensation that is reasonable and proportional,” he says.

According to the judgment in the recent case, the younger couple provided assistance and care to the wealthy seniors that went “far beyond what anyone would reasonably expect from a friend and neighbour” for more than 20 years.

Without any next of kin, the older pair turned to the younger couple for help with chores and tasks, including banking, taxes, household repairs, and grocery shopping, before formally appointing them as joint attorneys for both property and personal care.

The decision says the younger man handled the older man’s banking and finances, including his considerable investments until his death in 2017, and that an accounting report confirmed the younger couple acted “conscientiously and scrupulously in this regard.”

In terms of compensation, the judge awarded the younger couple $130,000 for administering the man’s estate, which was worth more than $4 million. He also granted their request for approximately $435,000 in compensation for their work as power of attorney for property, based on a calculation set out in the Substitute Decisions Act. Finally, the younger couple was awarded $135,000 for services carried out during six years as attorney for personal care for the older pair.

“I have no hesitation concluding that the amount sought is reasonable and proportionate in the circumstances,” the judge concluded.

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