What is a Passing of Accounts
When someone takes on the role of an estate trustee or acts under a Power of Attorney (POA), they assume a significant responsibility — managing another person’s finances and ensuring that every action taken is in that person’s best interest. With that responsibility comes an obligation to account for how those funds have been handled. This formal process, known as the passing of accounts, is a cornerstone of transparency and trust in estate and incapacity administration.
Simply put, a passing of accounts is a detailed report that outlines all financial transactions carried out by an executor, trustee, or attorney. It includes information such as income received, expenses paid, investments made, and distributions to beneficiaries. These accounts must be accurate, complete, and supported by documentation such as receipts, bank statements, and investment records. The goal is to provide a clear and organized picture of how the assets were managed throughout the administration period.
When Is a Formal Passing of Accounts Required?
In many cases, accounts can be reviewed and approved informally by the beneficiaries or interested parties. However, when there are questions, concerns, or disagreements — or when the law requires it — a formal passing of accounts must be submitted to the Superior Court of Justice. This court-supervised process allows a judge to review and approve the accounts, ensuring that everything has been done properly and fairly. Once approved, the executor or attorney is released from further liability regarding those accounts, providing both accountability and closure.
For estate trustees, the passing of accounts serves as an important safeguard for beneficiaries. It reassures them that the estate has been administered properly and that the trustee has fulfilled their fiduciary duties. For attorneys under a POA, the process protects both the incapable person and the attorney. It provides a transparent record of how the attorney managed the incapable person’s assets, ensuring that funds were used appropriately and in the person’s best interest.
Why Proper Record-Keeping Matters
Failing to properly account can have serious consequences. Executors or attorneys who cannot provide adequate records may face legal challenges, removal from their role, or even personal financial liability. Properly preparing and maintaining accounts from the start of your appointment makes the process much smoother — and helps avoid disputes down the road.
Ultimately, the passing of accounts isn’t just about meeting legal requirements; it’s about maintaining trust, respect, and peace of mind among family members during what is often an emotional and challenging time. By being transparent and organized, executors and attorneys not only fulfill their legal duties but also honour the wishes of the person whose affairs they are managing.
If you’re acting as an executor or attorney and are unsure about your accounting obligations, professional guidance can make all the difference. Our team can help you understand your responsibilities, prepare your accounts properly, and navigate the process with confidence. If you are a beneficiary or interested party who is concerned that the Estate Trustee or the Power of Attorney is not complying with their fiduciary obligations, make sure to get in touch with our team!
Please book a FREE Case Assessment Call today to find out how we can help!
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