Executors, Trustees and Committees all have a duty to inform the beneficiaries of an estate what they did with the money. That means they must show the beneficiaries what money they took in, how the money was spent, and how the balance will distributed.
The formal process for doing that is called a “Passing of Accounts”. Usually an executor or trustee presents an accounting to the beneficiaries and invites the beneficiaries to approve those accounts. The accounting will contain a proposal for payment to the trustee or executor for his or her remuneration and a plan as to how the balance will be distributed between the beneficiaries. The usual practice is to withhold a portion of the beneficiary’s share until all the beneficiaries approve the accounts.
If one or all of the beneficiaries and the trustee cannot agree on the accounts then they can be passed before a judicial officer called a Registrar. The Registrar will settle the issues on which the parties cannot agree.
The usual issues which arise on an accounting are these:
- What assets make up the estate? In some cases the deceased often when their capacity or judgement was impaired has advanced large sums of money to a particular relative, neighbour or acquaintance. If the beneficiaries have not yet raised this matter with the Trustee an accounting is the last opportunity to do so.
- The Trustee’s decisions as to payment of money. There are cases where Trustees charge expenses to the estate where those expenses cannot be justified. For example if the Deceased’s Committee was her daughter and during the Deceased’s lifetime the daughter charged all her travel expenses for monthly traveling from the Interior to the Coast including hotels and meals on the theory that she stopped in for half an hour to visit her mother at a facility those expenses will likely be disallowed.
- The amount of Trustee remuneration. The Trustee Act allows trustees, executors and other persons in positions of trust to charge up to “a maximum” of 5% of the capital of the estate on account of remuneration and an annual care and management fee of a maximum of 0.4% of the annual average value of the assets. These fees are maximums and only awarded in the most unusual circumstances.