Passing of Accounts
in Ontario
Estate Trustees and Attorneys for Property have a legal obligation to account for their management of estate or trust assets. When beneficiaries raise concerns or court approval is required, a formal Passing of Accounts ensures transparency and accountability.
What Is a Passing of Accounts?
A passing of accounts is a formal court proceeding in which an Estate Trustee (also known as an executor or administrator) submits a detailed financial record of their management of an estate to the Ontario Superior Court of Justice for review and approval. The accounts must show all money and assets received, all expenses paid, all distributions made, and any compensation the Estate Trustee is claiming for their services.
This process is governed by Rule 74.18 of the Ontario Rules of Civil Procedure, the Estates Act, R.S.O. 1990, and the Trustee Act, R.S.O. 1990. It also applies to Attorneys for Property acting under a Continuing Power of Attorney and Guardians of Property appointed under the Substitute Decisions Act, 1992—all of whom are fiduciaries with a legal duty to maintain accurate records and account for their management of another person's assets.
At Diamond and Diamond, we represent both Estate Trustees seeking to pass their accounts and beneficiaries who have concerns about how an estate has been managed. We guide our clients through this process with precision and clarity, whether the accounting is straightforward or contested.
Questions about an estate accounting? The initial conversation is completely free.
Call NowWhen Is a Passing of Accounts Necessary?
A passing of accounts is not automatically required for every estate. However, it becomes mandatory or strongly advisable in several common situations.
Beneficiary Disputes
When one or more beneficiaries refuse to approve the Estate Trustee's accounts or sign a release, a formal court process is needed to resolve the matter.
Persons Under Disability
If beneficiaries include minors or persons who lack mental capacity, the accounts must be formally passed to protect their interests.
Compensation Disputes
If the Estate Trustee's claimed compensation is challenged by beneficiaries, the court will assess the fees as part of the passing of accounts.
Allegations of Mismanagement
When beneficiaries allege that estate funds have been improperly spent, lost, or mismanaged, the court can order a passing of accounts.
The Duty to Account
Under Ontario law, every Estate Trustee is a fiduciary who owes a duty of care, honesty, and good faith to the beneficiaries of the estate. One of the most fundamental fiduciary obligations is the duty to account—the responsibility to maintain complete and accurate records of every transaction involving estate assets.
When an Estate Trustee obtains a Certificate of Appointment (commonly known as probate), they take an oath to render a just and full account of their administration when lawfully required to do so. This means keeping the deceased's funds in a separate account, maintaining receipts and documentation, and being prepared to show exactly how every dollar was received and spent.
The same duty applies to Attorneys for Property acting under a Continuing Power of Attorney and Guardians of Property appointed under the Substitute Decisions Act, 1992. These fiduciaries must keep detailed records and may be required to pass their accounts before the court if concerns are raised.
What the Accounts Must Include
The accounts submitted to the court must be prepared in the specific format required by Ontario's Rules of Civil Procedure and must cover all financial activity for the period under review. Specifically, the accounts must detail:
- All capital and income receipts—money and assets received by the estate
- All capital and income disbursements—every payment made from the estate
- The value of remaining assets under the Estate Trustee's control
- Any compensation the Estate Trustee is claiming for their services
- A proposed distribution plan for the remaining estate assets
- Supporting documentation, including a sworn affidavit verifying the accounts
How the Passing of Accounts Process Works
The passing of accounts follows a structured legal process with defined timelines. Whether initiated by the Estate Trustee or compelled by a beneficiary, the steps are as follows.
Preparing the Accounts
The Estate Trustee must prepare the estate accounts in the formal court format prescribed by the Rules of Civil Procedure. This includes a complete statement of all receipts, disbursements, and assets remaining, along with a sworn affidavit verifying the accuracy of the accounts. The accounts must also include a copy of the Certificate of Appointment and any previous court orders relating to the estate.
Filing the Application
The Estate Trustee files an Application to Pass Accounts with the Ontario Superior Court of Justice. This is a formal court application that begins the process and puts all interested parties on notice that the accounts are being submitted for judicial review.
Serving the Beneficiaries
The application and the accounts must be served on all persons who have a contingent or vested interest in the estate. In Ontario, service must occur at least 45 days before the hearing date for persons served within the province and at least 60 days for those served outside Ontario. If beneficiaries include minors or persons who lack capacity, the Public Guardian and Trustee or the Children's Lawyer must also be served.
Objections (If Any)
Beneficiaries who wish to challenge the accounts must file a Notice of Objection with the court and serve it on the Estate Trustee. Objections may relate to specific transactions, the Estate Trustee's compensation, unexplained expenses, or broader concerns about how the estate was managed. The parties then have an opportunity to resolve the objections. If no objections are filed, or if all objections are resolved, the court can approve the accounts without a hearing.
Court Hearing and Judgment
If objections remain unresolved, the matter proceeds to a hearing. The judge will review the accounts, hear evidence from both sides, and make a determination. The court may approve the accounts as submitted, order adjustments, reduce or increase the Estate Trustee's compensation, or—in serious cases—order the Estate Trustee to repay funds to the estate. The court's judgment is final and binding on all parties.
How Executor Fees Are Determined in Ontario
One of the most common issues addressed in a passing of accounts is the Estate Trustee's compensation. Ontario law entitles Estate Trustees to fair and reasonable payment for their work, but the amount is subject to scrutiny.
Under section 61(1) of the Trustee Act, an Estate Trustee is entitled to "such fair and reasonable allowance for the care, pains and trouble, and the time expended in and about the estate." In practice, Ontario courts use a percentage-based guideline as a starting point: 2.5% on all capital and revenue receipts, plus 2.5% on all capital and revenue disbursements, plus a care and management fee of two-fifths of 1% of the average annual value of assets for estates that require ongoing administration over several years. This commonly totals approximately 5% of the estate's value.
However, this percentage is a guideline—not a fixed entitlement. The court will cross-check the result against five well-established factors to determine whether the amount is truly fair and reasonable.
The Five Factors for Estate Trustee Compensation
Established in Toronto General Trusts Corp. v. Central Ontario Railway (1905) and applied by Ontario courts ever since, these factors determine whether the claimed compensation is appropriate.
- 1 Size of the estateA larger estate does not automatically justify higher compensation. Simple estates with significant value may require less work than smaller, complex estates.
- 2 Care and responsibilityThe degree of difficulty in administering the estate, including tax complexity, creditor claims, and the nature of the assets involved.
- 3 Time spentThe actual hours devoted to administering the estate. Estate Trustees are encouraged to keep detailed time records.
- 4 Skill and abilityWhether the Estate Trustee demonstrated competence, including their ability to manage investments, deal with complex legal matters, and navigate family dynamics.
- 5 Success of the administrationWhether the estate was administered efficiently, debts were paid, taxes were filed on time, and the estate achieved favourable outcomes for the beneficiaries.
Whether You Are an Estate Trustee or a Beneficiary
For Estate Trustees
If you are an Estate Trustee who needs to pass your accounts—whether voluntarily or because a beneficiary has demanded it—we help you prepare your accounts in the proper court format, ensure compliance with the Rules of Civil Procedure, and guide you through the application process. If objections are raised, we represent you at the hearing and work to protect your interests, including your right to fair compensation for the work you have performed.
An Estate Trustee who proactively initiates a passing of accounts can often resolve disputes with beneficiaries more efficiently than allowing the matter to escalate. We help you take the right step at the right time.
For Beneficiaries
If you are a beneficiary who has concerns about how an estate is being managed—whether the Estate Trustee has been unresponsive, provided inadequate records, delayed distribution, or claimed fees that seem unreasonable—you have the right to demand a formal accounting. If the Estate Trustee refuses to provide one, we can help you apply to the court to compel a passing of accounts.
It is important to focus objections on issues of genuine significance. Beneficiaries who raise valid, substantive concerns are more likely to have their costs covered by the estate, while frivolous or trivial objections may result in personal cost consequences.
Who Pays for a Passing of Accounts?
The costs of a passing of accounts are an important consideration for both Estate Trustees and beneficiaries. Understanding how costs are allocated can help you make informed decisions about whether and how to proceed.
In general, the initial cost of preparing the accounts and filing the application is borne by the estate. However, the costs of responding to objections—and the costs of the hearing itself—are allocated based on the outcome.
Ontario courts are increasingly applying a "loser pays" approach to contested passings of accounts. If objections are found to be unfounded, the Estate Trustee's costs of responding will usually be paid by the estate, and the court may order the objecting beneficiary to personally pay a portion of those costs. Conversely, if objections are upheld, the Estate Trustee may be responsible for their own legal fees and may also be ordered to contribute to the successful beneficiary's costs.
Key Cost Considerations
- The cost of preparing accounts in court format is generally deducted from the Estate Trustee's compensation or paid by the estate
- Estate Trustees are not automatically entitled to recover all legal fees from the estate—the merit of their position matters
- Beneficiaries who raise meritorious objections may recover some or all of their legal fees from the estate or the Estate Trustee personally
- Beneficiaries who raise trivial or unfounded objections risk being ordered to pay costs personally
- If the court finds an Estate Trustee has mismanaged funds, it may draw an adverse inference and order the trustee to repay the estate
- In serious cases of breach of fiduciary duty, the Estate Trustee may be removed from their role entirely
Need advice about costs and strategy? We provide clear, upfront guidance.
Speak to a LawyerPassing of Accounts FAQs
Common questions about the passing of accounts process in Ontario.
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