Passing of Accounts

Passing of Accounts

Estate Trustees, trustees of inter vivos trusts, attorneys for property and guardians of property of mentally incapable individuals are all required to maintain records of their dealings with the property under their administration and care. This is because the law imposes a duty upon them to account for their dealings with the property under their control. These accounts may be presented to the beneficiaries and to the court for approval. Accounts are presented for approval either voluntarily by the trustees or when trustees are compelled to do so by any person appearing to have a financial interest in the estate or trust. Accounts are passed before the court by way of application. The accounts are presented in a manner prescribed by Rule 74 of the Rules of Procedure which rule also sets out those upon whom the application must be served; the time for delivery of a Notice of Objection to Accounts by any person who is unsatisfied with the accounts or the claim for compensation by the trustee; the manner in which the application proceeds if no objections to the estate accounts are made; and, requests for increased costs on the application.

Objections to accounts arise when accounts are not properly prepared in accordance with Rule 74 so that it is difficult to understand the various transactions. Objections can also arise where beneficiaries object to a particular disbursement made by the personal representative, trustee, guardian or attorney from the estate or the amount of the disbursement. A person having a financial interest could have an objection relating to the choice of investments or rates of return on funds invested in the estate or trust. Finally, the amount of compensation claimed by the personal representative, the allowance of which is in the discretion of the court, is often the basis for disagreement between beneficiaries and trustees.