Estates & Wills & Trusts

Not every issue is worthy of a passing of accounts: Kirsh

By AdvocateDaily.com Staff

While anyone with a financial interest in an estate may trigger a formal court application to scrutinize the estate trustee’s accounts, Toronto trust and estate litigator Felice Kirsh says it’s not a right to be exercised casually.

“Forcing estate trustees to pass accounts is not always in the interest of beneficiaries. You have to perform a cost-benefit analysis,” says Kirsh, a partner with Schnurr Kirsh Oelbaum Tator LLP. “You should really focus on what the issue is from a monetary point of view, and think about whether it’s worth it.”

The law requires executors to account for their activities as part of the fiduciary duty they owe to beneficiaries, she tells AdvocateDaily.com.

Estate trustees will typically ask for a release before making a final distribution, but Kirsh recommends beneficiaries think long and hard before withholding approval and forcing a court application to pass accounts.

Even if an individual beneficiary has concerns about the amount of money raised by the sale of certain assets or the level of compensation claimed by a trustee, Kirsh says they need to be considered in the context of the overall size of the estate, as well as that person’s share.

“People do not usually stand to inherit 100 per cent of an estate. If you’re one of four siblings sharing a parent’s estate, and the executor’s $40,000 compensation seems high to you, then you need to remember that your personal exposure is only 25 per cent of that, or $10,000,” she says.

In addition, any legal fees incurred by the executor during estate administration are usually paid out of the estate itself, further depleting the size of each person’s share.

“In a sense, you’re paying twice by objecting — once for your own lawyer, and again for a portion of the trustee’s lawyer,” Kirsh says. “It can seem momentarily worthwhile, but not every issue is really worthy of a passing of accounts, particularly if the estate is on the smaller size.

“You need to think about how far you’re willing to go to make a point, and what you can actually accomplish,” she adds.

This is the final instalment of Kirsh’s two-part mini-series on the passing of accounts in estates disputes. To read part one, click here.

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