What does a trust company charge to administer an estate?

A reader has asked me what a trust company charges. Since I work at a trust company, I am very familiar with our charges. I am not as familiar with the charges of other trust companies, though I expect that through the miracle of marketplace economics, we are probably similar.

There are two basic scenarios in which a trust company is hired to help. One is where the deceased person named the trust company as executor in his will before he died. I'll talk about that first. The second scenario is where the deceased named an executor such as a family member or friend, and it's the executor who comes to us for help.

In both scenarios, the cost of using a trust company is cheaper than you think.

If we have been appointed as an executor under someone's will, when that person dies we will run the estate according to the will. We don't charge a fee to be named, and we don't charge a fee if the customer changes his mind and decides not to name us. The only time we charge a fee is when we actually do the executor work on the estate.

The fee is a percentage of the estate. Our fees max out at 3.5% on the first $500,000 of an estate. The fees then decrease as the estate gets larger (e.g. it's 3.25% on the next $500,000). To give these numbers some context, I can tell you that in Alberta any executor, even a rookie who's never probated a will before, can charge an estate up to 5%. So you're getting good value when you get someone with tons of experience for 3.5%.

The fee comes out of estate assets. The executor doesn't pay it personally.

In the second scenario, a trust company is asked for help by an executor who is trying to run a deceased person's estate. This is sometimes because the executor is overwhelmed by the amount of work, and sometimes because there are troublesome beneficiaries. Regardless of the reason, executors might want some help while still remaining executors. We call this "Estate Assist".  The cost for this service depends on how much help the executor wants. Sometimes the executor only wants help with one or two things and other times he/she wants us to run the whole show. The price is tailored depending on the needs.

I once met a client in a branch who had flown in from Ontario. She was appointed as the executor of an estate in Alberta but only had one week to take care of matters. Obviously a week isn't going to make much of a dent in an estate. She hired us on an Estate Assist basis. She had had no idea this service was available but it was exactly what she needed. She told me that she was so happy she was going to take out a full page ad in the newspaper that says SCOTIA TRUST IS GREAT!!!

Remember that it never costs money to call a business of any kind to ask about prices, and that includes trust companies. If you're not sure who to call, go into any Scotiabank branch in Canada and ask them for a name and number for the local trust company.