Estate Accounts-Passing of Accounts
August 29, 2017
Many Estates require a Passing of Accounts through a Court hearing. Such “Accounts” may be required for the granting of “Power of Attorney”, Executor of Estate or Trustee of a Trust. In these comments, I concentrate on the requirements of the Executor of an Estate, however the rules and issues raised generally apply to the other two noted categories.
A Court hearing occurs when no Executor was appointed in a Will, or as a result of contention between beneficiaries or between beneficiaries and Executor. The Executor is responsible for the Accounts and their supporting data, which include invoices, cancelled cheques, bank statements, deposits arising from realization of assets and payments of liabilities of the deceased, and of the Estate itself.
In a Passing of Accounts for a sizeable Estate, the Accounts need professional presentation, and cross-referencing to support documents. Overall, the Accounts need be balanced, that is that the sum of the receipts and disbursements need agree to the funds in the Bank account. This gives a smack of Integrity to the data. A Passing of Accounts engagement is similar to what a Company does to maintaining its set of books. However the presentation is in a unique form, with many identifiable schedules dictated by judges to the Solicitors presenting to the Court.
To create a set of Accounts, the writer uses licensed software, “Do Process”, which follows the format of various statement off Accounts required by Ontario Courts. I am a senior Chartered Accountant, CPA with depth of experience in Canadian taxation, and specializing in taxation for deceased persons and their Estates. In support of clients who need to respond to CRA regards the realization of deceased assets, I have put together many packages of data for CRA. The Passing of Accounts is a more formal report which ultimately is presented via solicitors at court.
The effective preparation of the Accounts requires careful organization of receipts and similar documentation in an order matching the Bank statement flow of entries, throughout the period of the Estate.
Often, family disputes arise from how a Power of Attorney for an elder parent granted to one family member was handled, and that was followed by similar doubts and litigation respecting the Estate Accounts.
The solution is much clearer to dispute or defend when the mass of data is boiled-down into a understandable set of facts. And that is how I believe I offer my strength and experience