- Executors and trustees under a will generally must get an order for passing their first accounts within two years of the grant or appointment, subject to exceptions.
- A beneficiary can serve notice requiring accounts to be passed each year, and a representative who does not comply may be called before the court.
- The court can also settle an executor's compensation on application, unless the will itself sets the allowance.
Passing of accounts is the formal process where an executor shows the court, and the beneficiaries, what came into the estate, what went out and what is left. If you are an executor, it is how your work gets checked and approved. If you are a beneficiary, it is one of your main tools for seeing what has happened to the estate.
This article walks through the general shape of the process in the Supreme Court of British Columbia. The exact forms, filing steps and notice requirements are set by the court rules and can change, so confirm them with a lawyer before you file anything.
This article covers the law of British Columbia.
What passing of accounts means
Preparing accounts is a core executor duty. The government guide to wills and estates describes this as preparing accounts that show the assets, receipts, disbursements and distribution of the estate, and getting the court's approval of the accounts.
In plain words, the executor sets out every dollar in and out, and the accounts are then put forward for the court's approval. How court approval affects an executor's position depends on the facts, so it is worth confirming with a lawyer. Separately, if a trustee may be personally liable for a breach of trust but acted honestly and reasonably, the court may relieve the trustee wholly or partly of that liability.
When accounts must be passed
Under the Trustee Act, executors, administrators and trustees under a will must obtain an order for passing their first accounts within two years of the grant or appointment, unless the exceptions in section 99 apply. The list of exceptions is something a lawyer should check against the current Act for your situation.
There is also a separate mechanism that depends on a beneficiary's notice. The representative must pass accounts annually, within one month of the anniversary, if a beneficiary serves notice requiring it. A trustee who fails to pass accounts as required may be called before the court to explain why.
The steps, in general terms
- Gather records: bank and investment statements, receipts, invoices, sale documents and a record of each payment to beneficiaries.
- Prepare the accounts so they show assets, receipts, disbursements and distribution.
- Apply to the court for an order passing the accounts.
- Find out who must be told about the application and when. This depends on the court rules and your situation, so confirm it with a lawyer.
- Follow the court's directions on the application, and ask a lawyer what to expect at any hearing.
- Obtain the order and keep it with the estate records.
The specific forms and requirements for each of these steps depend on your situation. Because court requirements are updated from time to time, check the current version or ask a lawyer.
What the court looks at, including pay
What the court looks at on a particular application depends on the facts and the court's directions, so it is worth confirming with a lawyer. Compensation is one issue that often comes up at this stage.
An executor or trustee may be allowed a fair and reasonable allowance not exceeding 5% on the gross aggregate value of the estate, and there can also be an annual care and management fee that is capped as a percentage of average asset value. On application, the court may settle the amount of the compensation, even if the estate is not otherwise before the court. These rules do not apply where the allowance is set by the will or other instrument creating the trust.
If an executor made an error that could amount to a breach of trust but acted honestly and reasonably, the court may relieve the trustee wholly or partly of personal liability.
What to do next
- Executors: keep one organized set of records from the first day, and diarize the two-year date from the grant.
- Beneficiaries: ask the executor in writing for an accounting first; if that fails, ask a lawyer about serving notice requiring accounts to be passed.
- If you disagree with the executor's pay, ask about an application to settle the compensation, after checking whether the will sets it.
- Before taking any payment for yourself as executor, check whether the will sets your allowance and how the Trustee Act compensation rules apply.
- Speak with a lawyer before filing, since forms and notice rules are in the court rules.
Frequently asked questions
Do I have to pass accounts if everyone agrees the estate is fine?
The Trustee Act generally requires an order for passing first accounts within two years of the grant or appointment, unless an exception in section 99 applies. Whether an exception fits your estate depends on the facts, so a lawyer can confirm.
Can a beneficiary force an executor to pass accounts?
A beneficiary can serve notice requiring accounts to be passed annually, within one month of the anniversary. A trustee who does not pass accounts as required may be called before the court to explain.
Who decides how much the executor is paid?
The Trustee Act allows a fair and reasonable allowance not exceeding 5% of the gross aggregate value of the estate, and the court can settle the amount on application. If the will sets the allowance, those provisions do not apply.
What happens if the executor made a mistake with estate money?
The representative may be personally liable for a breach of trust. If they acted honestly and reasonably, the court may relieve them wholly or partly.
Sources
- Trustee Act, RSBC 1996, c. 464, s. 99 — bclaws.gov.bc.ca
- gov.bc.ca, After a Death: Deal with wills and estates — www2.gov.bc.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
This is a wills & estates question
Ask our Team for a quote. We reply by email.