Part of an executor’s duties in Ontario is to provide an accounting to beneficiaries. This happens after all debts and expenses are paid, including income taxes, and before any remaining assets are distributed. These are the types of responsibilities of an executor during estate administration.
Most people think of beneficiaries as those named in a will who are known as vested beneficiaries, but what about those who are secondary or contingent beneficiaries? Do they have the right to ask an executor for an accounting of the estate? What does a trustee or executor do in such cases?
What an executor or trustee should consider
There is no obligation to provide a contingent beneficiary with an accounting; however, he or she could apply to have an executor or trustee do so if accounts aren’t provided. When making a decision whether to provide an accounting to a secondary beneficiary, an executor might want to consider the following:
- Anyone having a financial interest in the estate could apply to the court for an accounting of the estate by proving there is a good reason for doing so.
- Even if a court deems a person does not have enough of an interest in the estate, the estate trustee may feel the person may have a legitimate interest — at which time, an order may be granted.
- An estate trustee who doesn’t want to provide an accounting may show he or she has already provided that accounting.
- There may be other reasons an estate trustee brings about an account application, which all beneficiaries must receive including secondary ones.
Some trust agreements provide a separate right for contingent beneficiaries to be included on trust administration information standard beneficiaries are entitled to receive. Any trust agreement must be scrutinized carefully to determine one’s rights. Having an Ontario lawyer with experience with estate administration matters for help and support during this process can prevent missteps from happening and allow for a much smoother transition.