- Estate trustees must keep accurate records of the estate's assets and transactions, and a first passing must include a statement of assets at the date of death and accounts of all money received and disbursed.
- Notice goes to beneficiaries and other interested persons, and judgment can be given unopposed if the objection period expires with no notice of objection.
- Compensation can be fixed on a passing as a fair and reasonable allowance, and the court may relieve a trustee who acted honestly and reasonably.
Being an estate trustee means answering for how you handled other people's money. A passing of accounts is the formal way to do that. You show the Superior Court of Justice what came in, what went out and what you are claiming for your work, and you ask the court to approve it.
A judge passing the estate trustee's accounts can allow a fair and reasonable allowance for compensation, and compensation can also be settled when the estate is not before the court in an action. This article explains how a passing generally works in Ontario, so you can decide when to get advice. Court rules have been amended recently, so confirm the current wording with a lawyer.
Keep proper records from day one
Estate trustees must keep accurate records of the estate's assets and transactions. A passing is much easier if those records were kept as you went, rather than rebuilt later.
Accounts filed with the court on a first passing must include a statement of assets at the date of death, together with accounts of all money received and disbursed.
- A list of the assets as they stood at the date of death
- Every receipt of money, such as sale proceeds, refunds and income
- Every payment out, with invoices and receipts
- Records of any compensation you intend to claim
- Records of how you invested estate money, if you did
Paying expenses and investing while you administer
If you believe an expense is properly incurred in carrying out the trust, you may pay it directly from the trust property, or pay it yourself and then recover it from the trust property. Keep the paperwork either way, because these items will appear in your accounts.
If you invest estate money, you must use the care, skill, diligence and judgment a prudent investor would use. Directions or limits in the will take priority over those general investment rules. You may delegate investment functions to an agent to the same extent a prudent investor might.
How the passing process works
On a passing, notice goes to the beneficiaries and other interested persons, and the estate trustee swears an affidavit verifying the accounts. This gives people a chance to review the accounts and raise concerns.
Judgment can be given unopposed once the objection period has expired and no notice of objection to the accounts or to the compensation claimed has been received. How an objection would be handled depends on your situation, so it is worth confirming with a lawyer.
| Step | What happens |
|---|---|
| Prepare accounts | Statement of assets at death plus money received and disbursed on a first passing |
| Give notice | Beneficiaries and other interested persons are notified |
| Swear affidavit | The estate trustee verifies the accounts |
| No objection | Judgment can be given unopposed after the objection period |
Minor, unborn or unascertained beneficiaries
If a beneficiary is a minor, the Office of the Children's Lawyer must be served with an application to pass estate accounts under rule 74.18(3). It should also be served where the estate has an unborn or unascertained interest. Skipping this step can derail the passing, so identify these beneficiaries early.
Compensation and relief from liability
An estate trustee is entitled to a fair and reasonable allowance for their care, pains, trouble and time spent on the estate, as allowed by a judge of the Superior Court of Justice. A judge passing the accounts may allow that allowance. Beneficiaries can object to the compensation claimed.
If a lawyer is acting as estate trustee and has provided necessary professional services to the estate, the allowance is increased by an amount considered fair and reasonable for those services.
If you made a mistake, the court may relieve a trustee who is personally liable for a breach of trust, wholly or partly, if the trustee acted honestly and reasonably and ought fairly to be excused for the breach and for not obtaining the court's directions. Similar relief may be available to a personal representative who overpays a creditor or claimant while acting honestly and reasonably to protect or conserve the estate's assets. Relief is not automatic.
What to do next
- Gather bank statements, receipts and invoices into one organized set
- Prepare a statement of assets at the date of death
- List all money received and paid out
- Identify every beneficiary, including any minors or unborn or unascertained interests
- Decide whether you will claim compensation and keep a record of your time
- Talk to an estate lawyer about whether a formal passing suits your estate and about the current rules
Frequently asked questions
What does passing the accounts of an estate involve?
A passing involves notice to the beneficiaries and other interested persons, and an affidavit from the estate trustee verifying the accounts, and whether it applies to your estate depends on your situation. A lawyer can tell you whether it makes sense for yours.
What happens if nobody objects?
Judgment can be given unopposed once the objection period has expired and no notice of objection to the accounts or to the compensation claimed has been received.
Can I be paid for being an executor?
An estate trustee is entitled to a fair and reasonable allowance for care, pains, trouble and time spent on the estate, as allowed by a judge of the Superior Court of Justice. The amount is not automatic, and beneficiaries can object to it.
When must the Office of the Children's Lawyer be involved?
It must be served with an application to pass estate accounts under rule 74.18(3) where a beneficiary is a minor, and it should also be served where there is an unborn or unascertained interest.
Sources
- Trustee Act, R.S.O. 1990, c. T.23 (e-Laws) — Ontario e-Laws
- R.R.O. 1990, Reg. 194: Rules of Civil Procedure (e-Laws) — Ontario e-Laws
- Ontario.ca – The Office of the Children's Lawyer and estates and trusts matters — ontario.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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