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Tuesday, November 5, 2019

Is threatening to take a beneficiary to court to pass accounts really a threat?

Lately I've noticed a lot of questions on this blog about Releases. I also hear a lot of questions about them in my daily work. In particular, I note that many beneficiaries are being "threatened" by the executor that if they don't sign a Release, the executor will go to court for a passing of accounts. In some cases, the executor even says that he/she will ask for costs against the beneficiary who didn't sign the Release.

Of course this is concerning to beneficiaries. Nobody likes being threatened with a lawsuit. I have seen for myself the way some executors employ bullying tactics to try to scare beneficiaries into signing Releases. But let's just slow down and take a closer look at this whole business of passing of accounts.

The truth of the matter is that if an executor wants to be released from his duties with approval and assurance that he won't be sued in the future, he is supposed to pass accounts with the court. That's actually the procedure that is set down in the Rules of Court in the various provinces. So where does the Release come in? It is nothing more than a shortcut. If the beneficiaries are willing to sign Releases voluntarily, it saves everyone the time and cost of going to court and keeps a bit more money in the estate. Because a Release is an efficient, cost-efficient, and generally amicable workaround, it has developed into common practice to ask beneficiaries to sign one, but a Release is not required by law.

So an executor who threatens a beneficiary with going to court to pass accounts is really not making any threat at all. Passing of accounts is a normal estate procedure.

Having said that, I must caution all parties - executors and beneficiaries alike - that the court does not appreciate people wasting expensive court resources. They especially do not like being used as a means of carrying out someone's personal vendetta against other people. Everyone involved is expected to act like mature, reasonable adults. A beneficiary who withholds a Release out of spite most likely will find the passing of accounts application to be an unpleasant experience.

The requirement to be mature adults means that if a beneficiary doesn't want to sign a Release, he should have a good reason. He should have made honest, reasonable efforts to find out the answers to his questions about the accounting without success. He should not withhold his consent arbitrarily. He should not make outrageous demands but should limit his questions to relevant queries about the executor's actions on the estate. The passing of accounts is not the time to raise objections about the will or the court system or your hatred of the executor.

And the executor, for his part, should produce an accounting that is accurate and complete. He should not provide a shoddy mess of numbers with no helpful details and expect anyone to be alright with that. He should answer all reasonable questions regarding the accounting. He should produce back-up paperwork such as receipts or statements if someone who is entitled to those documents asks him for them.

Everyone should try to make it work before they resort to the courts.

You'll notice the word "reasonable" has been applied to both executors and beneficiaries. If you go in front of a judge and cannot justify to that judge's satisfaction why you acted as you did, then  you could end up with costs against you. So perhaps I should amend my original statement and say that an executor who threatens a beneficiary who has acted reasonably is making no real threat at all.


  1. Thar may be true for most cases but it's quite out of the ordinary as in my case people jump to conclusions. Never letting anyone answer.
    I have now been on both sides.
    Lost all my inheritance.

    1. Hi Curious,
      That sounds like a very negative experience.


  2. Lynn, your blog is great reading. I have a question, hypothetical situation.

    What happens if someone dies intestate in Ontario, there are only five living next of kin cousins alive, one cousin is selected to apply to be Estate Trustee, and this ultimately leads to satisfactory settlement of the estate over a period of a couple of years.

    No will was found after a thorough search, nor did the decedent's lifestyle suggest a will ever existed.

    If later after all assets distributed equally and clearance certificate obtained, in the very unlikely situation, someone comes forward (e.g. a charity, or a long lost cousin of equal kinship) who claims they have a right to inherit all or some of the estate -- what could or would happen under these two scenarios below?
    (a) if a will was presented by the claimant.
    (b) no will is ever found or existed.



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