Ontario Executor Accounts – Track Every Penny of Estate Money for Compensation
Anita, like you, was an executor. She used her father’s estate funds to pay for her mother’s nursing home care for years after her father died. This was what dad had specified were his wishes in his last will.
Anita never dreamed she’d have problems after her mother died. Her brother living abroad wanted to know why so little was left in dad’s estate account. He demanded Anita give him her accounting records. Anita’s records were incomplete. Her brother refused to agree to pay Anita’s executor’s compensation for mismanaging the estate. Anita now had to decide to a) forget about her remuneration as executor or b) go to court to claim her fees for her time and trouble.
You must keep accounts (financial records) of all your estate dealings. One day, like Anita, you may need them. You are responsible to account to beneficiaries or to the court. Keep proper records or you run the risk that your conduct will not be approved. This is important when you need to get paid and close the estate.
Keep records of your time, as well, as you go along. Time is a factor in guidelines to set your executor compensation. It can establish how much work was involved being executor.
What Are Your Executor Accounts?
Executor accounts track all financial transactions in the estate. Accounts are what executors owe to the estate beneficiaries on their financial dealings. Record everything including the date and source of any receipt. Payment of estate money or to beneficiaries. Here are some examples to record:
- cash or cheques; specify the source and date
- income received; source — rent, dividends, salary, pension
- sale of assets, property, stocks, car or house
Money paid for expenses or debts
- legal costs, repairs, funeral and burial
- credit cards, loans, support to dependants or spouse
Executors Are Fiduciaries
The law holds you responsible to account when you deal with someone else’s property or money. You are in a position of trust and must put creditors and beneficiaries before you sell. You must keep complete financial records to prove you were honest.
Hire a bookkeeper, if necessary, to keep those records.
Your accounts can then be produced when needed for court approval.
Here is a link to Rule 74.17 of the Rules of Civil Procedure. This rule defines your record-keeping duties. In a small estate, this may not be a burden. In midsize and large estates, you may need to use a spreadsheet/hire a bookkeeper.
Ontario Executor Tip: Keep itemized records and backups of all estate financial transactions.
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Edward Olkovich is a Toronto-based Estate Lawyer and a Certified Specialist in Estates and Trusts Law.Posted In: Estates, Executors On: June 24th, 2020