Executive Summary: Key Legal and Evidentiary Issues

• Scope and legality of an interim passing of accounts under the Trustees Act when the estate remains partially unadministered due to pending tax-planning steps.
• Proper assessment of “fair and reasonable” executrix compensation, including the role and limits of a percentage-of-estate benchmark (5% as an upper cap, not a default starting point).
• Evaluation of the complexity of the estate administration (multiple real properties, corporate holdings, post-mortem tax planning) versus the actual work and expertise contributed by the executrix.
• Treatment of professional services and fees (accountants and lawyers) already paid by the estate, and whether the executrix may effectively be compensated again for work done by those professionals.
• Impact of the executrix’s meticulous record-keeping in satisfying the Court that all estate funds were properly handled, despite the absence of detailed time records for her personal efforts.
• Refusal to pre-approve a proposed distribution plan, confirming that the Court will not convert an interim passing of accounts into a de facto final approval of all future steps in the administration.

Facts and parties involved

The case concerns the estate of the late Sharon Miriam Rubin, who died leaving a substantial estate with real property, investment assets, and corporate holdings. In her Last Will and Testament dated May 7, 2021, she appointed her niece, Moncton lawyer Nicole Druckman, as executrix and trustee. The Will also provided that Ms. Druckman would serve as sole director of the Sheldon Rubin Professional Corporation, whose shares were held through a holding company, 727041 N.B. Inc. The Will made specific bequests, including an amount for her son’s caregiver, Ms. Jacinto, and several charitable donations. The residue of the estate was to be divided among three testamentary trusts: 60% to a trust for her son Mitchell, 5% to a trust for her daughter Gabrielle, and 35% to a trust for Gabrielle’s children (Mrs. Rubin’s grandchildren). Ms. Druckman was also appointed trustee of the “Mitchell Trust.” The Will did not contain an express clause on executrix compensation.

Nature and value of the estate

When Ms. Druckman applied for Letters Probate in October 2022, the Inventory listed significant assets. These included three real properties (the Moncton home on Westmount Boulevard estimated at $800,000; a house/cottage in Barachois estimated at $500,000; and a 50% interest in a property at Century Drive valued at $212,500, with the remaining 50% held by caregiver Ms. Jacinto, subject to a mortgage in favour of the estate). The Inventory also recorded a substantial Registered Retirement Income Fund, a Tax-Free Savings Account, a bond, a loan/mortgage receivable from Ms. Jacinto, and the shares in 727041 N.B. Inc. Overall, the total value of the estate was estimated around $4.1 million. By October 31, 2024, the date to which the accounts were presented, the estate still held approximately $2.8 million in assets, but by that time the Westmount and Barachois properties had been sold, taxes had been paid, specific bequests satisfied, and partial advances made to the various trusts. The Court accepted evidence that approximately $4.9 million in capital and income had passed through the executrix’s hands during administration to that date.

Corporate holdings and the post-mortem tax plan

A distinctive feature of the estate was the corporate structure. The holding company, 727041 N.B. Inc., was wholly owned by Mrs. Rubin and functioned purely as a holding company. Its sole assets were 100% of the Class A and B shares of the Sheldon Rubin Professional Corporation, Dr. Rubin’s former professional corporation. Although the professional practice was no longer active, the corporate structure still had to be unwound in a tax-efficient way. The accounting firm BakerTilly advised that a “post-mortem pipeline transaction” should be implemented to avoid double taxation on the corporate assets and to facilitate the issuance of a Canada Revenue Agency clearance certificate. On BakerTilly’s recommendation, $500,000 was to be held back from distribution to cover potential tax liabilities and related accounting and legal fees. Because this pipeline transaction required time to complete, the estate could not yet be fully wound up and the assets could not all be distributed, leaving the administration incomplete.

Procedural posture and interim passing of accounts

Against this background, the executrix applied to the Probate Court seeking three forms of relief: an interim passing of accounts to October 31, 2024; an award of executrix fees; and court approval of her plan for distributing the remaining estate assets. Under the Trustees Act, “trust” includes the estate of a deceased person, and “trustee” includes an executor. Section 66(1) allows the Court, on application, to order that trustees’ accounts be passed on a single occasion or at intervals. Justice Dysart found that the statute clearly permits interim, or partial, passings of accounts. On the evidence, he was satisfied that Ms. Druckman had maintained meticulous records, had accounted for all assets that came into her hands, and had justified all expenses and reimbursements claimed as part of the estate administration. Accordingly, the Court indicated it would accept a partial passing of accounts to October 31, 2024, even though the pipeline transaction and final distribution remained outstanding.

Executrix’s work and estate administration tasks

In support of her compensation claim, Ms. Druckman described in detail the work she had performed. This included closing Dr. and Mrs. Rubin’s personal bank accounts and opening an estate account; dealing with OMG Wealth Management to liquidate investments held personally and through the corporations; clarifying the nature of the corporate structures and holdings; arranging to become a director of the holding company and professional corporation; engaging BakerTilly for corporate tax and pipeline advice; removing and auctioning the contents of the houses; maintaining and insuring unoccupied properties; negotiating and pursuing an insurance claim for hurricane damage to the Barachois property; securing a right-of-way easement to address that property’s landlocked status (including legal work for which she did not charge legal fees); retaining and instructing a real estate agent for the sales of the Westmount and Barachois properties and overseeing those transactions (again performing some conveyancing legal work without separate professional fees); collecting mortgage payments from Ms. Jacinto; paying specific bequests; liquidating other personal assets such as a vehicle; and closing or winding down service contracts and accounts such as cell phone, credit cards and subscriptions. She also noted that, in her separate role as trustee of the Mitchell Trust, she had been providing guidance and support to Mitchell, though the Court distinguished that work as falling under a separate trust with its own compensation regime.

Professional assistance and evidentiary record

The Court paid close attention to the extent to which the executrix relied on external professionals and the fees paid to them. BakerTilly was retained to advise on the pipeline transaction and other tax ramifications; they received more than $10,000 from the estate, and the professional corporation paid them additional fees exceeding $6,000. Legal counsel was retained in August 2022 to review co-ownership and promissory note documentation (including matters concerning the Century Drive property), examine the corporate minute books, evaluate the estate’s net worth, advise on dissolution of the corporate interests, prepare corporate resolutions updating directors, officers and shareholders, and research executrix compensation. Further legal work was billed for preparing the probate materials and for the later passing-of-accounts application, which generated legal fees in excess of $30,000. Additional legal advice on distribution planning and beneficiary reporting was also obtained at modest cost. From an evidentiary standpoint, the Court inferred from these invoices and records that significant portions of the legal and tax complexity were managed by professionals whose fees were already paid from the estate. While this confirmed that the estate itself was administered prudently, it also meant that the executrix could not claim compensation for professional-level work that others actually performed. The judge noted that, although she had provided some legal work at no charge (e.g., property sales and the right-of-way), she “brought little in the way of legal expertise to the majority of her work as executrix” in light of the considerable outsourcing.

Statutory framework for trustee/executrix compensation

The Trustees Act provides that a trustee (which includes an executor) is entitled to “fair and reasonable compensation” out of the trust property for services rendered. The statute also expressly permits the Court to determine compensation during administration or on a passing of accounts. In addition, the Act enumerates a list of factors to be considered in setting compensation, including: the gross value of the trust property; any changes in that value attributable to the trustee’s decisions; revenue received and expenditures incurred; the complexity of the work; any unusual difficulties; involvement in litigation; whether the trustee had to manage a business or act as a director; the degree of skill, labour, responsibility and specialized knowledge required; the extent and complexity of tasks delegated to others; the time expended; the number of trustees; and any other relevant matter. Justice Dysart emphasized that this multifactorial analysis means the size of the estate (and any associated percentage calculation) is only one element and cannot be treated as the dominant determinant of fees. New Brunswick jurisprudence, including Clowater Estate and Allaby v. Allaby-Boyd, has generally treated 5% of all capital and income passing through the executor’s hands as a benchmark upper limit absent exceptional circumstances, not an entitlement.

Percentage benchmarks and Canadian case law

Initially, Ms. Druckman sought a total of $200,000 in executrix fees for the full administration, on the theory that this was approximately 5% of the estate’s value. When it became clear the Court would not treat the interim passing of accounts as effectively final, her claim was revised to $125,000 as interim compensation for the period from Mrs. Rubin’s death on August 14, 2022, to October 31, 2024, with leave to seek more at final passing. She argued that, in general, executors are entitled to up to 5% of the total capital and income handled, and cited New Brunswick decisions confirming that 5% is normally the maximum for compensation, along with Ontario cases such as Denofrio Estate. Justice Dysart reviewed this Ontario jurisprudence, which often adopts a structured percentage approach (e.g., 2.5% across various receipt and disbursement categories and possible management fees) guided by factors like size of trust, responsibility, time, skill, and success. However, he stressed that New Brunswick’s approach, especially post-2015 Trustees Act, is more firmly anchored in the statutory factors and in ensuring fair and reasonable compensation tailored to the circumstances. Percentages, in his view, are only rough guides and must not overshadow the underlying quantum meruit analysis of the actual “care, pains, time and trouble” expended.

Application of the statutory factors to this estate

When applying the Trustees Act factors, the Court accepted that the gross value of the estate and the total capital and income passing through the executrix’s hands (around $4.9 million) were relatively high, which pointed toward higher compensation in principle. However, the Court regarded the increase in estate value from initial estimates as essentially market-driven (e.g., properties selling for more than appraised values) rather than the result of strategic decisions by the executrix, making that factor neutral. In terms of revenues and expenditures, the estate made significant payouts—about $1.6 million—covering specific bequests, funeral costs, maintenance of real properties, professional fees, and expenses related to Mitchell Rubin. That activity supported modestly higher compensation. On complexity, Justice Dysart recognized that this estate was more complex than the average because it involved three properties (two sold), corporate holdings and a post-mortem tax plan. At the same time, he noted that many of the core tasks (selling a residence, engaging an accountant, dealing with contents, opening and closing bank and service accounts) are common to many estates. The corporate element was less demanding than a trading business because the professional corporation was inactive and the numbered company’s only asset was the shareholding in that corporation. Overall, the estate was somewhat more complex than most, favouring higher—but not maximum—fees. Regarding skills and specialized knowledge, the Court accepted that Ms. Druckman’s legal training helped and that she performed some legal work at no charge, which supported higher compensation. Yet her extensive reliance on external accountants and lawyers, who were fully paid from estate funds, meant that she could not fairly be rewarded as though she had personally delivered all complex professional services. The absence of time records or even a rough hours estimate was another limitation, leaving the Court to infer effort from described tasks and the delegation pattern. Finally, as the sole executrix, she bore all fiduciary responsibility herself, but that factor was assessed as neutral in terms of the quantum.

Interim executrix fees and the Court’s assessment

Balancing all of these considerations, Justice Dysart rejected the notion that a 5% figure, or a percentage close to that level, should be used as the starting point. He highlighted that for a $4.9 million estate, the actual complexity and burden, although real, did not rise to a level that would justify compensation at the maximum range. He also stressed the risk that rigid reliance on percentages could arbitrarily produce vastly different fee awards for estates requiring similar work but having different asset values. Instead, he considered what was fair and reasonable in light of the statutory factors, the actual nature of the tasks performed, the professional services already billed separately, and the fact that the period at issue was approximately just over two years of administration. The Court concluded that an interim award of $70,000 represented fair and reasonable compensation to October 31, 2024. This amount was substantially lower than the $125,000 interim figure sought and far below an overall 5% benchmark on capital and income, but it reflected the judge’s view that the estate’s dollar size outstripped its true complexity and that considerable parts of the sophisticated work had already been paid for through external invoices. The award was expressly described as interim only, with the possibility that the executrix might seek additional fees on a final passing of accounts, subject to the Court’s willingness to consider how much of the work was already completed by October 2024 and to revisit the fairness of the total compensation in light of all services ultimately rendered.

Refusal to pre-approve the distribution plan

The executrix also asked the Court to approve in advance her proposed plan to distribute the remaining estate assets, particularly in light of the prolonged timetable associated with the pipeline transaction and CRA clearance. Justice Dysart declined this request. He noted that an executrix does not need the Court’s blessing to carry out a distribution that is consistent with the terms of the Will, and that pre-approving a plan would blur the line between an interim and final passing of accounts. Since the estate remained open and the tax-planning steps and final allocations could evolve, pre-approval was considered premature. Instead, the Court indicated that if and when a further passing of accounts—interim or final—is required, the executrix can return to the Court at that time. For present purposes, only the accounts up to October 31, 2024 were being approved.

Outcome and successful party

In disposition, the Court approved the accounts submitted by the executrix for the period from the date of Mrs. Rubin’s death to October 31, 2024. It ordered that the executrix is entitled to an interim payment of $70,000 in executrix fees for that period, on the footing that the vast majority of the estate administration work had been completed by that date. The request for pre-approval of the proposed distribution plan was refused as premature, without any monetary consequence tied to that refusal. No separate damages or quantified costs awards were stated in the decision, as the matter concerns estate administration and compensation rather than a damages claim. Overall, the successful party is the executrix, Nicole Druckman, who obtained approval of her interim accounts and an interim compensation award of $70,000, and there is no determinable separate amount ordered for costs or damages beyond that fee entitlement.