Fiduciaries' Accounts
Estate/Capacity litigators tend to come into situations after the administration has become contentious. I am often struck by fiduciaries’ lack of knowledge, at the outset, of the extent of their duties to keep records and documentation of their administration, and the troubles this can cause.
Rule 74.17 of Ontario’s Rules of Civil Procedure provides a very clear description of the form of Estate Trustees’ accounts, and Attorneys for Property or Guardians of the Property of incapable persons must account in an analogous fashion.
When asked to place these duties into context, I often use blunt language such as “You have to be able to provide the value of all the assets before you took control over them, every penny or asset paid to you, every penny or asset you pay out, how you invest the money in the meantime, and why you do it. Once you provide all that information, you then need to justify every payment and provide proof of the transaction.”
No doubt the vast majority of fiduciaries are told the same thing in writing by their solicitors. Nevertheless, it seems to me that in the desire to gather in the assets, and perhaps more to the point to pay it out, there is a natural tendency to neglect to keep records and protect oneself for many fiduciaries. In those cases, attempting to collect the information and documents after the fact can be a monumental proposition.
A fiduciary spending time on record-keeping at the outset and in an ongoing basis is protecting against what could be a terrible ordeal later on, and is unlikely to regret doing so.
Thanks for reading.
Sean Graham
