Does an executor have to keep records and provide accounts to beneficiaries in Ontario?
Yes. An executor in Ontario has a duty to keep accurate records of every financial transaction they carry out on behalf of the estate. This includes documenting all assets collected, income earned, debts paid, expenses incurred, and distributions made. Good records protect the executor as much as the beneficiaries.
Beneficiaries are entitled to receive a passing of accounts — a formal accounting of how the estate was managed. The executor and beneficiaries can agree on an informal accounting, but if they cannot agree, the matter can be brought before the court for a formal passing of accounts. A court can review and adjust the executor's compensation at this stage.
Practically, an executor should open a separate estate bank account, keep all receipts, note the basis for every decision (especially asset valuations and sale prices), and document when and why any decision was delayed. Failing to keep adequate records makes it very difficult to defend against a claim of breach of duty.
Key takeaways
- Executors must document all receipts, payments, and distributions.
- Beneficiaries are entitled to an accounting of how the estate was handled.
- Disputes over accounts can be resolved by a formal passing of accounts in court.
- Good records are the executor's best protection against a breach-of-duty claim.