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Thursday, November 25, 2021

Court is tough on trustee who failed to keep receipts. Really tough.

Today I'm referring you to an article written by David Freidman, a law professor in Ontario. The article appeared on the blog of the law firm of Wagner Sidlofsky. The article discusses the 2010 case of Zimmerman v. McMichael estate in Ontario where a trustee failed to properly account for the money and other assets he was holding in trust. You can read the details in the article, which you can see here

The reason I want to bring up the case is that many readers of this blog are executors or are acting as attorney under an Enduring Power of Attorney. All of you are trustees of other people's assets. You are all responsible for properly keeping records and accounting to beneficiaries or the court at different times. I would prefer that none of you find yourself in hot water because of it. The case we are discussing today involved a person who was in a similar position. However, when the beneficiary could not get a proper accounting, she asked the court for help.

This did not go well for the trustee.

In this case, the trustee did not keep receipts and did not answer reasonable objections to his accounts. In the end, he had to personally repay about half a million dollars that he could not account for. 

It's a worthwhile lesson for all trustees. KEEP RECEIPTS. Keep detailed records so that you can explain cash withdrawals and expenses. 

To read the full case, click here

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