Here is the situation as it appears in a sample of Canadian provinces.
The legislated or guideline allowed fees vary from 2.5% to 5% of the capital and income of an estate and about 0.4% of the capital annually for management of an on-going trust. That's apart from disbursements for out of pocket expenses. Beneficiaries can object through the courts if they think the Executor/Trustee is charging too much. Of course, the general rule of fair compensation means that more complicated estates requiring more work will cost more but the guidelines set a baseline.
An Executor/Trustee is not obliged to take a fee. That may be better from a tax angle since fees must be included in the trustee's income for tax calculations.
Most Trustee Acts allow the setting of higher or lower rates in the Will or other document that establishes the trust. Note however, that the guideline amounts may not be acceptable to some trust companies, as explained in this excerpt from the Certified General Accountants of Ontario publication Executorship: A Guide for Those Called Upon to Act as an Estate Trustee:
"In recent years, trust companies have become dissatisfied with the estate trustee's fees allowed by the Ontario Superior Court of Justice. Consequently, often trust companies decline to act in estates of less than $200,000. In almost every estate where they do accept an appointment, trust companies rely on a fees memorandum, in which the testator - at the time the will is drawn - agrees to fees set by the trust company, which are usually higher than what would otherwise be allowed by the tariff set by the Ontario Superior Court of Justice."
Rule of Law blog has an excellent post with details on how estate and trustee fees work in B.C. along with a link to a long and detailed report by the BC Law Institute recommending changes to the current system there. The report comments on how things work elsewhere.
- think about, discuss with the Executor and possibly set compensation in the Will beforehand, depending on how big and complex the estate is likely to be; negotiate with some professional firms if they will be required
- keep financial affairs and estate planning simpler if possible - what perhaps may be saved in tax may be more than offset in lawyer or accounting fees afterwards