Beneficiaries entitlement to financial information of an Estate
In most cases, when a person passes away they leave behind assets that form their estate. Usually, a personal representative (either an executor or trustee) is appointed to manage and distribute this estate. When receiving this role, the personal representative obtains a number of duties that they are legally required to follow. To acknowledge these duties they must swear in an affidavit that they will legally administer the deceased’s estate and be subject to these duties. This article will focus on the personal representative’s duty to account.
To account for an estate means providing information relating to two different stages, firstly about the status of the estate, and secondly about how the estate was administered and any work that was done. This information should include payments made by the estate and also any expenses and executor’s fees charged. A personal representative is required to retain detailed and accurate information of all transactions throughout their management of the contents of the estate. In some instances failing to keep accurate records can lead to the personal representative being held personally responsible for a transaction.
Specifically, there is a legal requirement that a personal representative must have their accounts approved by all beneficiaries or before a court every two years, unless it is otherwise agreed or ordered. The information that must be contained is:
- a statement of the assets and liabilities of the estate;
- a description of capital transactions, listed in chronological order;
- a description of income transactions, listed in chronological order;
- a statement showing the proposed fees that the executor or administrator is claiming for their work with respect to the estate; and
- a statement setting out any past and proposed distributions of the estate.
Additionally, there is a common law duty to be ready at all times to provide information about the progress of the administration of the estate. Although the amount of detail under the common law duty varies based on a person’s interest in an estate, the amount of disclosure owed to a beneficiary is at the highest level. A beneficiary is permitted to inspect accounts, and other documents relating to the estate, at any point in time. Additionally, failing to account to a beneficiary after being requested to do so may result in the personal representative being ordered to pay costs of the beneficiary when the accounts are passed.
As you can see the duty to account is an important duty for beneficiaries and others to be aware of in the event that they are confused as to the estates financial management or its distribution. If you are a beneficiary and the personal representative is not providing you with an accounting or adequate information, it is important to consult with an estates lawyer. One of our experienced associates would be happy to provide you with the necessary advice and information to make the financial management or distribution process one that is stress-free and easy for you; all you have to do is contact us to book your first consultation.
Jade grew up in Shawnigan Lake and is very proud to call Victoria her home. Before pursuing her education in law, she completed her undergraduate degree at the University of British Columbia obtaining a Bachelor of Science. After living in places such as Saudi Arabia and France, Jade gained a unique set of experiences which contributed to her decision to travel abroad in pursuit of her legal education. Jade is excited to be commencing her articles with Velletta & Company in August of 2017. Although her interests reside in family law, Velletta & Company offers a broad range of experience in many different areas of law which Jade will actively engage.