This month's SlideShare presentation provides an in-depth review of the basics of passing accounts

1. Passing of
Accounts
1

2. 2
The Basics of Passings of Accounts
• One of the most fundamental duties of an estate trustee and
attorney for property is the duty to account for his or her actions
• Fiduciaries are expected to maintain complete records of each and
every action taken within the course of the administration of an
incapable person's assets or the administration of an estate
• If a person fails to satisfy beneficiaries that assets have been
prudently managed, courts may compel the fiduciary to commence
an application to pass accounts

3. 3
Applications to Pass Accounts
• Sometimes an estate trustee or attorney for property may choose
to voluntarily pass his or her accounts to protect him or her from
personal liability related to an administration
• For example, an estate trustee who is seeking compensation may
apply to pass accounts in the event that estate beneficiaries will
not sign a release approving of draft or informal accounts that have
been circulated
• The goal of a passing of accounts is to obtain a Judgment passing
accounts, which is recognition by a court that the assets have been
properly managed and that there has been no related misconduct
for which the fiduciary will be held liable

4. 4
Court-Passing Format of Accounts
• To apply to a court to pass accounts, the accounts must appear in
court-passing format, rather than in some other, informal format
• Accounts in court-passing format will include the following:
– A statement of original assets at the beginning of the accounting
period (usually the date of death or date on which an attorney for
property began acting)
– Details of all funds disbursed
– Details of all funds received
– A statement of assets at the end of the accounting period

5. 5
The Objections Process
• If an application to pass accounts is not opposed, courts will typically
issue a Judgment approving the accounts without the need for a
hearing
• However, if one or more of the respondents is dissatisfied with the
accounting provided, he or she may file a Notice of Objection to
Accounts, a document that outlines any concerns regarding the
management of assets reflected by the accounting
• In Ontario, the Rules of Civil Procedure provide deadlines for service
of materials within a contested application to pass accounts
• Beneficiaries now also have the option of filing a Request for Further
Notice in Passing of Accounts to remain up-to-date following any
developments in the application

6. 6
Take-Home Points
• When acting in a fiduciary role, it is best to maintain records and
supporting documentation for all transactions, whether it is
anticipated that a passing of accounts will be necessary or not
• The advice of a lawyer may be helpful in determining whether an
application to pass accounts ought to be commenced and, if so, to
assist in preparing accounts in court-passing format

7. 7
Thank you for reading!