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Monday, May 28, 2012

Passing accounts - what's worth objecting to?

Our friends at http://www.allaboutestates.ca/ have posted a really interesting entry summarizing two recent Ontario cases. Each of the cases dealt with estates in which beneficiaries objected to the executor's accounting. Because of the objections, the accounts were heard in court.

In these cases, the judge felt that the objections raised by the beneficiaries were book-keeping errors or small issues. In one case, the objections raised by the beneficiary were not really about the accounting; they were simply expressions of unhappiness with how the estate had been administered. The important thing, the judge said, is that all of the money was accounted for and it was possible to resolve the small issues in other ways (such as adjusting the executor's fee) without forcing the executor to pass accounts in court.

The beneficiaries had costs awarded against them.

The lesson to be learned from these cases is that the courts want executors and beneficiaries to work out small issues and errors in an accounting. The court should only be called on to deal with more serious issues. Click here to read the article.

5 comments:

  1. Hi, Lynne. I am an executor and a beneficiary of my late mother. There are 2 other beneficiaries. Both beneficiaries had signed an Interim Release and Approval of Accounts. When it came to the final release, one beneficiary had signed based on the advice of a lawyer, and the other had signed but then had the final release withdrawn. That lawyer sent a letter to the court questioning her capacity, and he also stated that no legal advice had been given.

    This disgrunted beneficiary then consulted with another lawyer regarding the final release, and the estate lawyer that I had hired sent that lawyer a copy of all the receipts, bank statements, and income tax that was filed on the remaining final accounting. This beneficiary's lawyer then stated he had everything he needed, and his client was going to sign another final release. That never happened, and no explanation was given as to what the problem was. The estate lawyer told me he made several attempts to contact this lawyer with no success.

    Thus, I decided to voluntarily pass accounts, and the paperwork was sent out to the beneficiaries and filed with the court about 5 months ago.

    Finally, the court appointment date was set. The unhappy beneficiary showed up at the court without her lawyer present and told the registrar that her lawyer had withdrawn his services because the other beneficiary had filed a complaint against him with the law society. The estate had not been notified of this withdrawal.

    This beneficiary also told the court registrar that her lawyer who had withdrawn his services had also failed to share any information with her regarding the estate, which I found difficult to believe because my lawyer had stated that he had sent all the information to her laywer, as well as, the paperwork that was filed with the court. This beneficiary had also signed an Interim Release and Approval of Accounts under her lawyer's "independent legal advice" as stated on that legal document.

    The court appointment date is now being rescheduled to allow this beneficiary to have her new legal counsel present, whom she stated she had not seen yet.

    Can this beneficiary be charged for lying to a court registrar?

    My laywer now has to send all the information, yet again, to this beneficiary's new lawyer, who is not yet familiar with the case. My lawyer is an articling lawyer who has never passed accounts before. He is very confident that this will not go to a formal court hearing.

    Is there a time limit set by the court in Saskatchewan in which a beneficiary can file a dispute against an estate? because the paperwork to pass accounts was filed 5 months ago.

    Also, can a beneficiary file a frivolous complaint against an estate?

    I think the lack of communications in this particular case is the fault of the recalcitrant beneficiary and her previous lawyer who failed to communicate with the estate.

    The other beneficiary who had signed the final release is upset and is talking now about seeing a lawyer because she feels victimized in that the unhappy beneficiary has held up the final disposition of this estate 11 months now, and used lawyers to do it. I also took no exectuor's fees, and the interim distribution was a proposed equal share for each of us, and that was what was proposed for the final remaining share. If this goes to a formal court hearing, all 3 of us beneficiaries stands to lose. I have done nothing wrong, and I stand on my accounting which proves that.

    Any advice? Thanks.




    November 16, 2012 7:03 AM

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  2. How much did it cost for just passing the accounts?
    DO all beneficiaries need lawyers?

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  3. I am in a dispute over executor fees. The release States the 2 executors are claiming 2 and a quarter percent EACH on the modest estate of 116071.25 . I called upon receipt of closure. And actually offered more. 2.5% split . Which would be 1.25%each.They refuse and are threatening court action at my expense. What can I do?

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  4. A judge can decide the fee. That would mean you obtaining a lawyer. Are the accounts sent out already to beneficiaries like yourself. It is best to find a compromise out of court of you can.

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  5. Hello Lynne,

    I am one of 3 beneficiaries and we have been asked to sign a Release in order to receive an Interim Distribution. The Executor has said that he will ask for a passing of accounts if we don't sign right now. I am trying to avoid the time and expense involved in a passing of accounts so even though I feel there are some questionable expenses charged to the Estate I am contemplating signing the release.

    My question is if I have signed my release and then he asks for a passing of accounts am I waiving my rights to object to the accounting during the passing of accounts?

    Thanks for any information that you can give me!

    ReplyDelete

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