10 Essential Tips for Passing Accounts in Ontario’s Estate Court

Do you need court approval of your management of a person’s affairs?

This may mean you are a guardian, an attorney for property or an estate executor.

Are you looking to have your compensation confirmed? If so, you may need to pass your accounts in court.

What Are Your Accounts?

These include your records of your dealings as a guardian, attorney, executor or estate trustee. If you are a fiduciary, you are obliged to keep records to continuously to show how you manage a person’s assets.

Why Are You Required to Pass Your Accounts?

Applications to pass accounts can be done voluntarily or by court orders obtained by beneficiaries, dependants, or those entitled by the Ontario court rules to an interest in the funds you manage.

Your records (called accounts) show what you received and what you spent. You are to have available vouchers for all receipts, disbursements are expenses to support your accounts.

Here are 10 important tips to keep in mind when you submit your accounts for approval on a passing of accounts in Ontario courts. I will later discuss your standard of care, so keep reading.

1. Passing accounts in an Ontario court requires you to use a formal format for your records which are a cross-reference. Your formal accounts have more detail than just a spreadsheet or a business income and balance sheet.
2. Your records or accounts can be objected to by those with an interest in the funds you managed. This includes those with a financial interest in the funds. The court process for a passing provides deadlines for filing objections to your accounts. Judges can then review the accounts and approve your handling of the financial matters and review your claims for compensation.
3. Court orders specify what is be included in the accounts and who receives them.
4. Beneficiaries of an estate or those with financial interests in the funds can request documents, bank statements, receipts, invoices and any other records and examine the person submitting the accounts under oath based on their objections to the accounting. If no objections are filed, or if objections are filed and then withdrawn, a court can pass the accounts and confirm any compensation.
5. Passing of accounts is considered a non-contentious court matter. Parties need to be reasonable and to cooperate. In some cases, courts can order pretrial conferences and mediation. If an agreement cannot be reached, court hearings or trials can be scheduled to address objections.
6. Those with financial interest in the funds do not need to accept any accounting without question. They can challenge every item by requiring supporting material. They can object to sale terms for property, the costs of managing the fund (financial assets and real estate), or if any compensation’s is claimed how it is calculated.
7. The Supreme Court of Canada has stated that the standard of care for executor accounts is that of a person exercising ordinary care and diligence in managing their own affairs.
8. The costs for preparing formal accounts in the proper court format is often the subject of a court order. Recent court decisions suggest preparing such accounts can be the responsibility of the person passing the accounts. This cost is often paid from their compensation or the fund. If there is a finding of misconduct, compensation can be reduced or not granted.
9. Executors are entitled to be indemnified for all their reasonable costs. This includes preparing documents to pass their accounts. Sometimes provisions in a court order authorize estate trustees to be indemnified for preparation of any passing of accounts.
10. If a court hearing is required on a passing of accounts, judges have discretion to revise the compensation and claims for costs based on what the judge hearing the matter may consider is reasonable.

Need Help with a Passing of Accounts?

Contact me today to book a meeting. I understand what you are going through and can help.

How to Get Started

I offer you a $375 meeting to discuss your needs. Take advantage of this meeting by Zoom or in-person in my Toronto west end office. Arrange your meeting.

I am a Certified Specialist in Estates and Trusts Law. I can give you expert tips to end your worries.