When Do You Need a Passing of Accounts in Ontario?

 

A passing of accounts is one of the most important court processes in Ontario estate administration, yet many executors and beneficiaries do not understand when it is required or how it arises. Executors may believe they can administer an estate privately without court involvement. Beneficiaries may assume they are entitled to full financial disclosure automatically. The reality lies somewhere in between. A passing of accounts is the formal process by which an executor or trustee asks the court to review and approve their administration of the estate. Understanding when this process becomes necessary helps both executors and beneficiaries protect themselves.

What Is a Passing of Accounts?

 

A passing of accounts is a court application in which the executor presents detailed financial records showing:

• Assets received

• Expenses paid

• Investments handled

• Compensation claimed

• Proposed distributions

 

The court reviews these records and determines whether the executor has acted properly. Once accounts are passed, the executor receives court approval of their administration and is generally protected from later complaints regarding the period covered.

 

When a Passing of Accounts Is Mandatory

 

In Ontario, a passing of accounts is not automatically required in every estate. However, it becomes mandatory in several common situations.

 

When Beneficiaries Do Not Approve the Accounts

 

If beneficiaries do not consent to the executor’s accounting, the executor may be required to seek court approval through a passing of accounts. Without beneficiary approval, informal accounting is often insufficient.

 

When the Court Orders It

 

The court may order a passing of accounts if concerns arise about delays, missing information, lack of transparency, or allegations of mismanagement. Court-ordered passings often occur in disputed estates.

 

When an Executor Seeks Compensation Without Agreement

 

If an executor wishes to be paid and the beneficiaries do not agree on the amount, the executor must usually have their compensation assessed as part of a passing of accounts.

 

When Required by a Will or Trust

 

Some wills or trusts expressly require a passing of accounts at certain stages of administration.

 

When a Passing of Accounts Is Often Advisable

 

Even when not strictly required, a passing of accounts may be advisable where the estate is large or complex, there are multiple beneficiaries, family relationships are strained, or the executor anticipates future complaints. Seeking court approval can provide closure and protection.

 

What Triggers Beneficiaries to Seek a Passing

 

Beneficiaries often pursue a passing of accounts when the executor is not responding, information is incomplete, distributions are delayed, records appear inconsistent, or trust has broken down. A passing of accounts gives beneficiaries access to formal disclosure and court oversight.

 

What the Process Looks Like

 

A passing of accounts involves preparing detailed financial statements, serving beneficiaries with the materials, allowing beneficiaries to file objections, and court review and potential hearing. The process can be time-consuming and costly, particularly if disputes arise.

 

Consequences of a Passing of Accounts

 

For executors, court approval provides protection, errors may be corrected, and compensation may be reduced or denied if conduct is improper. For beneficiaries, the process provides transparency, an opportunity to challenge transactions, and court-supervised resolution.

 

A Practical Perspective

 

A passing of accounts is not a punishment. It is a mechanism for accountability. Executors who keep good records and communicate openly are far less likely to face this process. Beneficiaries who raise concerns early often avoid prolonged disputes. Understanding when a passing of accounts becomes necessary allows both sides to navigate estate administration with greater clarity and fewer surprises.