Passing of Accounts

Estate trustees, trustees of inter vivos trusts, attorneys for property and guardians of property are all required to maintain records of their dealings with the assets of another individual under their control. It is important to remember that these records are supposed to be kept contemporaneously.

The requirements are set out in common law and under legislation. Such responsibility often leads to the requirement to prepare an accounting and provide it to the court for scrutiny and approval.

Beneficiaries of an estate are entitled to know the original assets and liabilities of an estate and to know what payments were made or received by an executor. As such, a beneficiary, a grantor of a power of attorney, a person under guardianship or anyone with standing under the legislation, may compel an estate trustee, an attorney or guardian for property (as the case may be) to pass accounts in court.

A passing of accounts is somewhat like an audit and there is a specific formal format used. If any action seems suspicious, the beneficiary may object to it, ask for further documentation, or in more serious circumstances, object to the executor’s amount of compensation. This is similar for grantors of powers of attorney and persons under guardianship.

Sometimes an estate trustee may decide to pass his or her accounts upon the winding up of the administration of an estate. This is common where there are minor or incapable beneficiaries, but also in cases where there is tension between the trustee and beneficiaries, a trustee may seek court approval.