Court Approval for Probate Accounts

Court Approval for Probate Accounts is no mere formality; it is an extremely important component of estate administration.

A ‘passing of accounts’ is what brings administration of an estate to an end.  If you want closure for the estate, a passing of accounts may be the only way to get it (the alternative is a clearance certificate from CRA, releases from all beneficiaries, and the final distribution by the trustee).

When required

Most estate trustees will not make a final distribution of the estate unless all beneficiaries consent to their handling of the estate and agree to release the estate trustee of all claims and waive the right to demand a passing of accounts.

If any beneficiary is ‘under disability’ and cannot consent to the trustee’s accounts and sign a release:  Minors (under 18) are unable to enter into binding contracts, so a passing of accounts will usually be required where a child is a beneficiary of an estate.  Similarly, if a beneficiary is incapable of managing their finances and represented by a guardian of property or attorney for property, a passing of accounts may be required.

If a beneficiary does not agree with the trustee:  If a beneficiary refuses to sign a release – whether they object to the trustee’s accounts, or the beneficiary simply refuses to respond or correspond with the trustee – a passing of accounts is the only way for the estate trustee to get closure.  In these circumstances, we encourage estate trustees to move to pass their accounts without extended delay or correspondence with the non-responsive beneficiary.

If the trustee has acted improperly: When beneficiaries disagree with the action (or inaction) of the estate trustee, then often the beneficiaries should force a passing of accounts as quickly as possible.  

It is common for estate trustees to threaten that a passing of accounts will costs thousands of dollars and take months to complete.  This is not correct.  A passing of accounts is only extremely expensive and slow if the parties dispute the accounts.  In our experience, many estates would benefit from faster preparation of accounts and faster submission to the Court of an application to pass accounts, as the process must be initiated in order to resolve the disputes between the parties.

The Process 

A passing of accounts has the following steps –

• Preparation of the estate accounts in Court form.  This is often one of the most difficult steps in the process.
• Preparation, service and filing of the Application to Pass Accounts (this is an Application to the Court, which will ultimately lead to a Court order).
• Handling any objections, resolution of the dispute if any (see below)
• Having the final order approving the Accounts and ordering a distribution of the estate issued and entered by the Court.

Contested v. uncontested accounts

Once the estate trustee submits the Application to Pass Accounts, there is a detailed Court process to follow.  This process draws a clear distinction between applications which are contested and applications which are uncontested.  Applications that are uncontested are considered by a judge in writing  (no hearing is necessary) and if the Accounts and application are in properly prepared, the Order will be signed in due course.  Uncontested passings of accounts are not particularily slow or expensive.

If a beneficiary contests any aspect of the accounts (including date of death balances, the administration of the estate, or compensation claimed) the process becomes more like conventional litigation for identification of the disputed items, response from the trustee, disclosure of additional facts (including ‘receipts’) and the like.  Normally most (sometimes all) issues are resolved by the parties including by way of negotiations.  Ultimately, any issues that remain unresolved will be decided by a judge after an appropriate hearing.  It is this last step that can be very expensive, and thus, the cost of a passing of accounts is largely dependent on the conduct and positions of the parties after the Application to Pass Accounts is filed with the Court.

We can assist.  Contact us for more information.

Miltons Estate Lawyers – Probate, Wills, Trusts and Estate