Today’s blog is a continuation of my series[1] on bringing an application to pass accounts (the “Passing Application”).[2]  After the hearing date is set with the court office and the notice of application issued, the next step is to serve the beneficiaries.  The beneficiaries then have an opportunity to review the accounts and respond.

What documents must you serve on the beneficiaries?

The Ontario Rules only require that you serve the notice of application and the draft judgment sought on each person who has a contingent or vested interest in the estate.[3]  If you are required to serve the Public Guardian and Trustee or the Children’s Lawyer, in addition to the above documents, you must also serve them with the accounts, the affidavit verifying the accounts, the certificate of appointment and the latest judgment if there has been a prior passing of accounts,[4] i.e. all the documents contained in the application record.  Similarly, if a beneficiary has an attorney acting for them under a continuing power of attorney for property or a guardian of property, you must serve them with the application record documents.[5]

What documents may you want to provide to the beneficiaries?

Practically speaking, you may decide to serve some or all of the beneficiaries with the application record, rather than just the notice of application and the draft judgment required by the Ontario Rules.  Some factors to consider when making this decision are (i) the beneficiary’s interest in the estate; (ii) the number of beneficiaries; and (iii) the size of the accounts.  For example, if you have a large class of beneficiaries with a very remote contingent interest, it may be expensive to serve them with the application record and they may not have any desire to see these materials.  But, if you have beneficiaries who you know or anticipate will be interested in the Passing Application, it may save time and money to initially provide them with the complete materials.

You may also consider providing the beneficiaries with a letter summarizing the salient aspects of the estate/trust and the accounts, and which outlines the steps taken by the executor/trustee during the accounting period.  The goal is to facilitate reviewing the accounts by the beneficiaries.  The accounts in court passing format are not a familiar form of accounting to most people and it may help to “tell the story” in a letter.  If there has not been ongoing communication between the executor/trustee and beneficiaries during the accounting period, this may be advisable rather than simply dropping the Passing Application materials on the beneficiaries without any explanation.

How does a beneficiary respond?

The notice of application form sets out the different ways in which a beneficiary may respond to the Passing Application, how to claim costs for having a lawyer review the accounts for them, and the relevant timetables to take the various steps.

A beneficiary has the following options available, depending on how they wish to participate in the Passing Application:

• No action is required if a beneficiary is satisfied with the executor’s/trustee’s accounting and claim for compensation and if they do not wish to be involved any further in the passing of accounts process.[6]
• If a beneficiary does not object to the accounts or the claim for compensation, but they wish to receive notice of any further steps in the Passing Application, they would serve a request for further notice in passing of accounts (Form 74.45.1). This form must be served on the executor/trustee or their lawyer and be filed with proof of service in the court office at least 35 days before the hearing date specified in the notice of application.[7]
• If a beneficiary wishes to object to the accounts and/or the claim for compensation, they would serve a notice of objection to accounts (Form 74.45). The time period to serve and file this document is at least 35 days before the hearing date.[8]

In my next blog I will set out some things to consider when preparing or responding to a notice of objection to accounts.  Thanks for reading.

[1] https://www.allaboutestates.ca/tips-on-bringing-a-passing-of-accounts-application/ and https://www.allaboutestates.ca/tips-on-bringing-a-passing-of-accounts-application-part-2/

[2] The court rules regarding passing of accounts are set out in rules 74.16, 74.17 and 74.18 of the Rules of Civil Procedure (Ontario) (the “Ontario Rules”).

[3] Rule 74.18(3).

[4] Rule 74.18(3.1).

[5] Rule 74.18(3.2).

[6] Rule 74.18(8.2).

[7] Rule 74.18(8).

[8] Rule 74.18(7).