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Passing of Accounts by an Estate Trustee

Reviewed September 2012

This How-To Brief is an outline of how to determine (1) whether it is necessary to pass accounts, and (2) the steps that need to be taken to pass accounts.

1Gather what you will need at the court hearing

  • Accounts in "proper form"
  • A copy of the last order made on prior passing (if applicable)
  • A copy of the certificate of appointment of estate trustee
  • Consult the following forms under the Rules of Civil Procedure  
    • Form 74.43, Affidavit Verifying Estate Accounts
    • Form 74.44, Notice of Application to Pass Accounts
  • (See the link to the Rules of Civil Procedure Forms in the Resources section of this How-To Brief)

2Determine if it is necessary to pass accounts

  • There is a general legal obligation for an estate trustee (like any trustee) to keep a complete and accurate set of accounts of the assets under the estate trustee's administration. Passing of accounts refers to the process of obtaining the court's approval of the accounts.
  • It is not always necessary to pass accounts.
  • An estate trustee must have the estate accounts approved by the court where
    • there are minor beneficiaries
    • there are mentally incapable beneficiaries
    • there are unascertained or contingent beneficiaries
    • a beneficiary challenges the actions of the estate trustee, or
    • a beneficiary challenges the handling of the estate accounts by the estate trustee
  • A beneficiary can force the passing of accounts by obtaining a court order or an estate trustee can voluntarily apply to court for a passing of accounts.

3Prepare and file the necessary documents

  • An estate trustee must file the following documents with the Superior Court of Justice
    • accounts in proper court format
    • Form 74.43, Affidavit of the Estate Trustee Verifying Estate Accounts
    • a copy of the certificate of appointment of estate trustee
    • a copy of the last order made on the passing of accounts (if there has been a prior passing of accounts)
    • Form 74.44, Notice of Application to Pass Accounts
    • a filing fee of $322.00 (Superior Court of Justice and Court of Appeal – Fees, O. Reg. 293/92, made under the Administration of Justice Act) made payable to the Minister of Finance
  • For accounts to be in proper form, they must contain the following (r. 74.17):
    1. on the first passing of accounts, a statement of the assets at the date of death, cross-referenced to entries in the accounts that show the disposition or partial disposition of the assets
    2. on any subsequent passing of accounts, a statement of the assets on the date the accounts for the period were opened, cross-referenced to entries in the accounts that show the disposition or partial disposition of the assets, and a statement of the investments, if any, on the date the accounts for the period were opened
    3. an account of all money received, excluding investment transactions
    4. an account of all money disbursed, including payment for trustee's compensation and payments made under a court order, excluding investment transactions
    5. where the estate trustee has made investments, an account setting out
      • all money paid out to purchase investments
      • all money received by way of repayments or realization on the investments in whole or in part, and
      • the balance of all the investments in the estate at the closing date of the accounts
    1. a statement of all assets in the estate that are unrealized at the closing date of the accounts
    2. a statement of all money and investments in the estate at the closing date of the accounts
    3. a statement of all the liabilities of the estate, contingent or otherwise, at the closing date of the accounts
    4. a statement of the compensation claimed by the estate trustee and, where the statement of compensation includes a management fee based on the value of the assets of the estate, a statement setting out the method of determining the value of the assets
    5. such other statements and information as the court requires.

4Serve the required documents on all of the beneficiaries

  • The notice of application to pass accounts, a draft notice of objection to accounts (Form 74.45) and a draft judgment must be served on each person who has a contingent or vested interest at least 45 days prior to the appointment for persons in Ontario and at least 60 days for persons outside of Ontario.
  • Service may be by regular mail.
  • The Office of the Children's Lawyer must be served when there are minor beneficiaries, and the Office of the Public Guardian and Trustee must be served when there are charities or mentally incapable beneficiaries.
  • When the Children's Lawyer and the Public Guardian and Trustee are to be served, in addition to the aforementioned documents, they must also be served with a copy of the will, certificate of appointment of the estate trustee, the name and interest of the minor, mentally incapable individual or charity, and the address of any person with whom the minor or mentally incapable individual resides.
  • Once the notice of application to pass accounts has been served on all parties, an affidavit of service (Form 16B) must be filed as part of the court record.

5Determine if you need to attend the hearing

  • If no notices of objection (Form 74.45) have been filed by the beneficiaries, or if such notices have been subsequently withdrawn by notices of withdrawal of objection (Form 74.48), and the Office of the Children's Lawyer and Public Guardian and Trustee have filed notices of no objection or non-participation (Forms 74.46 and 74.46.1), the estate trustee does not need to attend court.
  • Regardless of whether the estate trustee must attend a hearing, a court record must be filed, no less than 10 days before the hearing date, containing:
    1. an affidavit of service of the documents required in a passing
    2. notice of no objection to accounts from the Office of the Public Guardian and Trustee and from the Office of the Children's Lawyer, if served
    3. an affidavit from the estate trustee or the solicitor of the estate stating that a copy of the accounts was provided to each person who was served with the application and requested a copy, that the time for filing notices of objection has expired and that no notices of objection were received or, if received, that they were withdrawn by notices of withdrawal as evidenced by a notice of withdrawal of objection attached to the affidavit
    4. notices of withdrawal, as applicable
    5. copies of all notices that have been filed
    6. requests, if any, for costs of the persons served
    7. a certificate of a solicitor stating that all of the required documents have been included in the record
    8. a draft judgment in duplicate setting out all closing balances in the accounts and the compensation to be allowed, including legal accounts
    9. the draft judgment approved by the Children's Lawyer or the Public Guardian and Trustee, as the case may be, if after being served with the notice of application, they did not serve a notice of non-participation
  • If nothing further is filed by the court date, the judge may sign the judgment, without the need for the estate trustee to attend. However, if the judge declines granting judgment or a request for increased costs has been filed, the hearing will proceed on the date specified in the notice of application.

6Attend the hearing, if required*

  • At the hearing, the court will limit the objections to those raised in the notices of objection to accounts.
  • Counsel should be prepared to present legal argument dealing with disputed aspects of the passing.
  • The estate trustee will be required to give evidence regarding the matters in dispute. Counsel for the estate trustee may examine the estate trustee in chief.
  • The parties who take issue with the accounts may cross-examine the estate trustee.
  • The estate trustee and beneficiaries may call witnesses to give evidence.
  • Beneficiaries may also give evidence.
  • The court may render its decision immediately or it may reserve.
  • If specific issues are highly contentious or complex, the judge may adjourn the passing of accounts and order a trial of issues. The court will make an order declaring the issue(s) to be tried and the parties who will participate, ordering that there be examinations for discovery and production of documents and specifying when the matter will proceed to trial.

* In most contentious passings of accounts, there is at the first court date an order giving directions setting out the issues and procedure. For example, an order for mediation may be included in the order giving directions.

7Prepare the judgment in the contentious proceedings

  • After the judge has endorsed the judgment on record, counsel for the estate trustee must prepare the judgment, have it approved for form and content by all parties appearing at the passing and then have it signed, issued and entered by the registrar of the court.

Resources

Statutes and Rules