How to Object to an Executor's Accounts in Ontario

You may have received a notice that the estate trustee (executor) is applying to the court to pass the estate's accounts. If something looks wrong, or you simply cannot tell where the money went, the timing of your response matters a great deal.

This article explains what the accounts must contain, how much notice you should get, how to object, what a judge can examine, and how costs work. Every estate is different, so it is worth speaking with a lawyer before you file anything.

What a passing of accounts is and why it matters to you

A passing of accounts is a court process in which the estate trustee puts the estate's financial record in front of a judge for review. When the court passes accounts, the judgment declares the accounts passed, sets out the capital and revenue receipts and disbursements, and orders fair and reasonable compensation paid to the estate trustee out of the estate.

Ontario has no statutory requirement for estate trustees to pass accounts at fixed intervals, and they may choose not to unless the court compels them. Where a trustee has started the process, it is your chance to ask questions with the court watching. Someone who appears to have a financial interest in the estate may also move for an order requiring the trustee to pass accounts.

Check the accounts for gaps

Estate trustees must keep accurate records of the assets and transactions in the estate. The accounts filed with the court must include the following:

• A statement of assets at the date of death on a first passing, cross-referenced to entries showing how each was disposed of (later passings start with the assets at the beginning of the period).
• An account of all money received and all money disbursed, including the trustee's compensation and payments under court order.
• Investment transactions.
• Unrealized assets, and all money and investments, at the closing date.
• All liabilities, contingent or otherwise.
• A statement of the compensation claimed and, for a value-based management fee, how the value was set.

The receipts, disbursements and investment accounts must each show the balance forward. If the will or trust treats capital and income differently, receipts and disbursements must be divided between capital and income. Missing pieces, unexplained gaps or entries that do not tie back to the opening assets are the kind of things to flag.

Notice, service and the objection deadline

To start the process, the trustee files the accounts verified by affidavit (Form 74.43), a copy of the certificate of appointment and any latest judgment on a passing of accounts, and the court then issues the notice of application (Form 74.44).

The materials must be served on every person with a contingent or vested interest in the estate. Where the Public Guardian and Trustee or the Children's Lawyer represents a person with an interest, such as a minor or an incapable person, they must also be served.

The key rule is that no objection may be raised at the hearing unless it was raised in a notice of objection, unless the court orders otherwise. So set out every concern in the notice, and do not count on raising it later.

What happens next: unopposed or contested

If no notices of objection are filed, or all are withdrawn, the court may grant judgment without a hearing. At least five days before the hearing date the trustee files a record with proof of service, an affidavit (Form 74.47) that the time for objections has expired, any costs requests and a draft judgment in duplicate. In the Toronto Region, an unopposed passing may proceed in writing once that material is filed. Other regions may handle this differently.

If you do object, the judge has power to inquire into any complaint or claim by a person interested in the accounts, including misconduct or neglect causing loss, and may order payment to the estate. Depending on the facts, issues can include:

• Expenses. A trustee may pay an expense from trust property, or pay it personally and recover it, if they believe it was properly incurred. The Superior Court of Justice may later disallow a payment or reimbursement it finds was not properly incurred in carrying out the trust.
• Compensation. A trustee is entitled to a fair and reasonable allowance for care, pains, trouble and time, as allowed by a judge. This does not apply where the will fixes the allowance.
• Early compensation. A trustee may take compensation before passing accounts only with the agreement of all interested persons who are sui juris, with court approval, or where the will provides for it. If the court later approves less, it can order the difference repaid to the estate.
• Investments. Trustees investing estate property must use the care, skill, diligence and judgment of a prudent investor.

Costs and a trustee's possible relief

Costs on a passing of accounts are assessed under Tariff C. A party seeking more must serve a request for increased costs (Form 74.49.2 or 74.49.3) with a costs outline (Form 57B) at least 15 days before the hearing. Costs can affect everyone, so consider them before deciding how far to take an objection.

Even where a mistake is found, the court may relieve an estate trustee from personal liability for a breach of trust if the trustee acted honestly and reasonably and ought fairly to be excused. An honest trustee is not automatically held responsible for every error, which is why the facts of each case matter.

What to do next

• Find the hearing date on the notice and count back 35 days to your objection deadline.
• Read the accounts against the list of required contents and note anything missing or unexplained.
• Ask the trustee for supporting records, such as statements and receipts, for entries that concern you.
• Write down every concern before drafting the notice of objection, since later additions may not be allowed.
• Get legal advice early, including on costs risk, before you file Form 74.45.

Frequently asked questions