Adult trusteeship: what is a passing of accounts all about?

"Passing of accounts" involves a trustee showing the courts what he or she has done with the money and property he or she handles for an incapacitated adult. If the judge is satisfied with the transactions ("accounts") for a set period of time, then they are said to have been "passed" by the judge. In some jurisdictions the process takes place in an open courtroom, and in others it is all dealt with by way of paperwork.

A passing of accounts may take place for various reasons. In some places, the law states that a trustee will automatically have the responsibility of passing his or her accounts on a regular basis. In all parts of Canada, a trustee must pass his accounts if he no longer wants to be the trustee and wants to hand matters over to another person. In fact a trustee is not permitted to quit until he has passed them.

A judge can order at any time that a trustee bring his accounts to court for passing. The judge might do this, for example, if a concerned relative of the incapacited person has asked the court for help. While most passing of accounts applications go through smoothly and without problems, others are hotly contested.

When looking at a trustee's accounts, the judge is looking for several items of information, including:

• the over-all financial situation of the incapacitated person, particularly in relation to the financial situation when the trustee first took over
• whether the incapacitated adult is being properly provided for
• whether money is missing, or everything is accounted for
• whether the trustee is maximizing the incapacitated adult's finances, for example by applying for all pensions and benefits available and by investing wisely
• how the incapacitated adult's property is being held, for example, whether the trustee has wrongly put the property in someone else's name
• whether the trustee has stayed within his authority, which means not doing things like giving away the incapacitated adult's money or making loans with that money to family members

The court wants to know that the trustee is managing the money properly. Knowing that one day he or she might be called upon to pass accounts, trustees should keep very good records.