Passing of Accounts Issues

Today’s blog discusses key issues surrounding the duty to account and passing of accounts.  On April 21st, 2022, Ian Hull explored this topic in eState Planner Academy’s webinar on Passing of Account Issues.

When acting as fiduciary or advising a fiduciary, the duty to account is paramount.  Be aware that:

  1. Estate litigation is growing, in large part due inadequate accounting by Executors and Trustees.

  1. An Estate Trustee and an Attorney for Property are fiduciaries and can’t delegate their fiduciary duties, but they can delegate administrative tasks. 

  1. Where a lawyer acts as Estate Trustee, they must clearly delineate between these two roles when undertaking a task as Estate Trustee or lawyer to the estate. For example, the lawyer can charge for a real estate transaction as a lawyer, but for administrative tasks like depositing cheques as fiduciary.

  1. A lawyer as Executor is covered by lawpro insurance for acting as both lawyer and Executor, but this may not be sufficient so it may be appropriate to get additional Executor insurance coverage.

  1. Accounting obligations begin on the date of death for an Executor.

  1. Accounting obligations begin for an Attorney for Property on the date that the Attorney starts acting in this role.

  1. Consider investments held in the context of the prudent investor rule and the Trustee Act, which should often be liquidated in the case of immediately distributable assets, but held in a balanced portfolio in the context of trust assets. 

  1. A fiduciary should be using a proper spreadsheet tool or other fulsome accounting tool as record keeping is crucial, saving receipts is not always sufficient.  Couts have come down on both sides of how diligent the fiduciary must be in accounting, so it is advisable to keep the best accounting records possible.

  1. There is no limitation periods on a passing of accounts, but there are some defenses available (ie. doctrine of laches & acquiescence).

  1. Trust companies can offer certainty and protection. 

eState Planner Academy hosts advanced topic webinars every Thursday at 12:30 (ET). You can sign up for free CPD credits here:  

https://landing.e-stateplanner.com/en-ca/e-state-webinar

To watch a recording of this webinar, you can register here: https://landing.e-stateplanner.com/joint-accounts

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