ACCOUNTING DUTIES OF THE EXECUTOR AND TRUSTEE - THE FORM OF THE ACCOUNTS - PART II
In Ontario, Rule 74.17 of the Rules of Civil Procedure sets out the specific expectations of this relatively precise art of accounting. It can be seen, therefore, that any accounting by Executors and Trustees has both a broad and a narrow aspect to it.
In the broad sense, it is an obligation whereby the Executor or the Trustee furnishes information to interested parties on an ongoing basis concerning the administration of the Estate or Trust.
In the narrow sense, the Trustee's accounting relates to the accounts prepared by him or her at the close of his or her administration (or some appropriate intermediate stage) so as to reflect the transactions that have occurred, with a view to discharging the trustee from liability for his or her stewardship.
Usually, a Trustee informs the beneficiaries of the results of his or her administration on an interim basis. This statement usually sets out the income or revenue received, the expenses incurred and the net result of investments, together with a list of assets.
Interim reporting statements vary widely in the manner of their presentation and the detail of the information they contain. To a greater or lesser degree they are designed to demonstrate the performance of the trust and frequently resemble the form of corporate financial statements.
However helpful these statements may be in assessing the skill of the Trustee in administering or managing the Estate or Trust, the format is not to be confused with the simple accounting of past transactions required by Rule 74.17 which is fundamentally different in purpose.
For example, the simple format contemplated by the Rule is strictly a record of each transaction which has in fact occurred. It does not contemplate usual business accounting concepts, such as depreciation, accounts receivable, accounts payable, provision for doubtful accounts or reserves, all of which are concepts applicable to performance or business accounting.
The purpose of the type of accounting contemplated by the Rule is to record all transactions in the Estate, with a view to extinguishing the Trustee's obligation to further account in the administration of the Estate. Once the accounts have been passed, the Executor or Trustee is relieved of any further accounting for that period, except for items arising as a result of fraud or mistake.
We will further discuss the form of the accounts in tomorrow's blog.
Here are some more social media thoughts:
Podcatcher Programs: A list is available at: Wikipedia - List of Podcatchers
Finding Podsafe Content:
- Creative Commons
- Audio feeds Podshow (the podsafe music network)
- Podsafe Ipod Army (how-to article)
- Magnatune
Websites with Legal Information:
- Stanford
- Harvard
- Electronic Frontier Foundation
- Chilling Effects
- Public Knowledge
- Copyright
- USPTO
- Schwimmer Legal
All the best, Suzana and Ian. --------
