What is an estate trustee? Or rather, who?
An estate trustee is the person given the responsibility of executing a Will by the person who crafted the Will. Typically, the estate trustee would be a known person, like a family member or a friend.
Is the estate trustee always an accountant or a lawyer?
Funny question, eh? The answer of course is “no”. That aside though, it is the question itself that is instructive.
There is a legal obligation on an estate trustee to keep a complete and accurate set of accounts detailing the assets of the deceased. The “passing of accounts” is the process through which a court approves those accounts. Think of it as a double-check on the work of the estate trustee. Needless to say, since the estate trustee is typically not a professional, the process of passing accounts typically includes professional advice and assistance.
Interestingly, not all accounts must be passed. For example, the beneficiaries could consent to an informal summary and release the estate trustee. Some instances in which accounts must be passed include the existence of minor, unascertained, contingent, or incapable beneficiaries, as well as when a beneficiary challenges the handling of the estate accounts.
The Process
If an estate trustee wishes to or must pass an account, there are a number of important considerations to take into account.
An estate trustee must file a series of documents with the Superior Court of Justice. They include the accounts in the proper court format; Form 74.43 - the Affidavit of the Estate Trustee Verifying Estate Accounts; Form 74.44 - The Notice of Application to Pass Accounts; and the certificate of appointment as estate trustee.
A filing fee of $322 made payable to the Minister of Finance is also required. The trustee may also be required to attend a hearing, or have an estate litigator attend as representative.
The fully detailed process for passing of accounts can be found in Ontario’s Rules of Civil Procedure. Rule 74.17 contains the form for the passing of accounts, which requires accurate records of the assets and transactions in the estate. Rule 74.18 details the process for submitting the application and the requirements for sending notice to involved parties.
If one of the beneficiaries is a minor, the Trustee or the Office of the Children’s Lawyer must be notified and involved in the process. The same is true for the Public Guardian if a beneficiary is deemed to have a disability.
If there are any objections to the accounts, the process for submitting a Notice of Objection can also be found under Rule 74.18. In order to avoid a lengthy court process, it is best for estate trustees to ensure they have a detailed and accurate account of transactions in the estate, as well as justifications for purchases.
Needless to say, with court rules and legal documents flying left, right and centre, it can be a convoluted process. So, as stated earlier, it is best for the estate trustee to seek the help of a Wills and Estates lawyer involved in estate administration matters.
Keep This in Mind
It is important for beneficiaries to note that there must be sufficient justification for raising an objection regarding an account. The temptation to turn the estate administration process into a battleground for past grievances must be resisted. Why? Let’s take a look at the 2017 Pochopsky Estate case.
In that case, four sibling beneficiaries legally compelled their estate trustee to initiate a passing of accounts in an attempt to obtain assets shared by their deceased father and his sister. All of the assets of the deceased had been settled outside of his estate, so their request was largely baseless - they were no assets for them to pursue in reality. Nevertheless, they persisted, despite repeated warnings from the estate trustee. The presiding judge ruled that the beneficiaries themselves would be liable for the $17,445 in costs that the trustee had taken on. Yikes, eh?
Interested in estate administration generally or the passing of accounts specifically? We can readily assist. Get started here, at afolabi.law