CLOSING MATTERS

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Accounts

Unless you are the sole beneficiary, as executor you must keep accurate accounts summarizing the administration of the estate. Before you distribute the estate among the beneficiaries, you must give them an accounting of your administration of the estate. Your accounting will set out the payments made by the estate and also your expenses and any executor’s fee you are charging (up to 5% of the estate value).

The accounts will generally include an inventory of the original estate assets, details of all money received and disbursed, and a summary of the assets on hand. The supporting books and records should be maintained until all clearance certificates have been issued.

The accounting should include:

  1. details of the assets and liabilities of the estate at the date of the deceased’s death,
  2. details of each receipt and disbursement during your administration of the estate,
  3. a list of the assets that you now have on hand,
  4. a calculation of the remuneration you intend to seek, if any, as executor (up to 5% of the estate value), and
  5. a statement of the distribution that you propose making.

You should provide beneficiaries with a form of release for their signature.

Please note that if any beneficiary is a minor, additional steps must be taken before you can distribute the estate.

The executor will have a duty to account[1] to beneficiaries and also to creditors. Executors who fail to account completely or accurately may face personal liability.

Check Limitation Periods

Before you finally distribute the assets, check that you gave enough time

  • for any Notice of Dispute to have lapsed (1 year) or been withdrawn (in Form P30),
  • for creditors to contact you about debts or claims on the estate (30 days after publication of a Notice to Creditors), and
  • for beneficiaries to bring wills variation claims (180 days from the date of grant).

Releases

You may have already had beneficiaries sign releases. A release is a contract promising that, in consideration for receiving a gift from the estate, the person signing promises not to make any claims against you. If you have not yet received the releases, do so before distributing the estate.

Closing Accounts and Paying Final Fees

You may have already closed all the deceased’s existing accounts and transferred the assets into the name of the estate or the name of the beneficiary entitled to receive the asset. If not, do so now, or before distributing the residue of the estate.

You should have received any necessary clearance certificates concerning outstanding taxes and any required certificates of compliance for taxation of non-resident beneficiaries before distributing the estate assets.

Passing of Accounts

You prepare a final statement identifying your expenses and any fees you are charging for administering the estate. This statement has to be approved by the beneficiaries in a process called “passing of accounts.”[2]

If the beneficiaries do not approve, you will need to apply to the court[3] (with an affidavit in Form P38[4]) and your accounts will need to be passed by the court. It may require the registrar to prepare and file a [TERMS AND DEFINITIONS | certificate] in Form 39. Even if the beneficiaries consent, you may decide to apply for passing the accounts to protect yourself against possible liability.

Passing of accounts is governed by the Trustee Act[5] and Rule 25-13[6] “Remuneration and Passing of Accounts”

The executor applies and submits an affidavit in Form P38.[7]

As a final check, when these things have been completed, the executor’s work is finished:

  • a Notice to Creditors was published (f necessary), and the time for creditors to come forward elapsed,
  • all debts and claims have been paid,
  • a clearance certificate was obtained from Canada Revenue Agency,
  • the beneficiaries provided releases,
  • if security or a bond was required, it has been cancelled,
  • all estate assets have been distributed to the beneficiaries,
  • an accounting has been provided to beneficiaries and some creditors.

As executor you can apply (by requisition[8] in Form P41)[9] to the court to formally discharge you. The advantage of being [[formally discharged][10] is that it protects against further claims for liability.

Resources

Online Resources

Legislation

Regulations and Forms

References

  1. WESA, s. 142 [full text: http://canlii.ca/t/8mhj]
  2. CLE, “Passing of Accounts and the New Probate Rules” [1]
  3. Rule 25-13, Supreme Court Civil Rules, BC Reg. 168/2009 [2]
  4. Supreme Court Civil Rules, BC Reg. 168/2009 [3]
  5. Trustee Act, R.S.B.C. 1996, c. 464, s. 99 [4]
  6. Supreme Court Civil Rules, BC Reg. 168/2009 [5]
  7. www.ag.gov.bc.ca [6]
  8. In Requisition Form P41, following Supreme Court Civil Rules, Rule 25-14.
  9. www.ag.gov.bc.ca [7]
  10. WESA, s. 157 [8]
  11. www.cle.bc.ca Passing of Accounts and the New Probate Rules
  12. www.bcheritagelaw.com [9]
  13. www.lawsociety.bc.ca [10]
  14. www.lawsociety.bc.ca [11]
  15. www.canlii.ca[12]
  16. canlii.ca [13]
  17. www.ag.gov.bc.ca[14]