Must a British Columbia Executor Give Beneficiaries an Accounting?

If you are a beneficiary, you may be waiting months with no word about what the estate holds or how it is being spent. If you are an executor, you may worry about what you must show and when.

This article explains the accounting duty in British Columbia, the court process for passing accounts, and the options open to a beneficiary who is not getting answers. Details can turn on the will and the estate, so a lawyer can confirm your position.

This article covers the law of British Columbia.

What the accounting duty is

An executor manages property that belongs to other people. BC government guidance says executors must prepare accounts showing the estate's assets, receipts, disbursements and distribution, and must have those accounts approved by the court or by the people receiving the assets.

That duty fits with the executor's basic tasks of listing all assets and debts, paying valid debts, filing tax returns and distributing the estate. Good records kept from the first day make the accounts much easier to prepare.

When accounts must be passed by the court

Under the Trustee Act, an executor, administrator or trustee under a will must obtain an order passing their first accounts within 2 years from the grant of probate. If a beneficiary serves notice requiring it, accounts must then be passed each year within one month of the anniversary. Whether this applies the same way to every type of estate or trustee can depend on the circumstances, so confirm it for your situation.

There is an important exception. The court-passing requirement does not apply if all beneficiaries approve or consent to the accounts in writing. In many family estates, that written approval is the practical route, because it avoids a court application.

What the formal accounts contain

When accounts are passed in court, the Form P40 statement of account must set out the estate's assets and liabilities, capital and income transactions, distributions and how remuneration was calculated. A representative who applies must file an affidavit in Form P38.

Remuneration is part of the picture. Executors and administrators are entitled to a fair and reasonable allowance of not more than 5% of the gross aggregate value of all estate assets, on top of reimbursement for expenses actually incurred. A trustee may also apply each year for a care and management fee of up to 0.4% of the average market value of the assets. If the will or trust instrument sets the allowance, those statutory provisions do not apply.

If a registrar fixes compensation, the order or certificate can be reviewed by the court if an application is made within 14 clear days after it is entered or filed. Unless varied, it binds the executor or administrator.

How a beneficiary can push for answers

Start with a written request. Ask for a list of assets and debts, the bank statements for the estate account, and a summary of money paid out. Many disagreements settle once information is shared.

If that does not work, the formal tools are:

• Apply to pass the accounts or fix remuneration. A personal representative, or anyone interested in the estate, may apply for an order passing the representative's accounts or fixing their remuneration.
• Serve notice for yearly accounts. Once a beneficiary serves notice, accounts must be passed each year within one month of the anniversary.
• Ask the court to remove the executor. Any person with an interest in the estate may apply, and one ground is being unable or unwilling to carry out duties to the point of hampering administration.
• Seek leave to act for the estate. With leave of the court, a beneficiary may sue or defend in their own name on behalf of the estate, which requires reasonable efforts to get the personal representative to act, notice, good faith, and that the step is necessary or expedient to protect the estate.

These steps escalate in cost and tension, so a lawyer can help you pick the right one for your facts.

What to do next

Executors can protect themselves by keeping records; beneficiaries can protect themselves by asking early and in writing.

• Executors: keep every receipt, bank statement and invoice, and record each payment and distribution.
• Executors: note the date of the grant of probate and diarize the 2-year mark.
• Executors: do not distribute while debts or tax are unresolved, since you can be personally liable.
• Beneficiaries: send a dated written request for information and keep a copy.
• Beneficiaries: if you are satisfied with the accounts, any approval should be in writing.
• Either side: get legal advice before filing any court application.

Frequently asked questions