A. Executor’s Duty
The executor must account to all persons who have an interest in the estate. At common law, the executor is required to keep proper books and be ready at all times to account. In many cases, no formal passing of accounts ever takes place because the beneficiaries are satisfied to receive their share and waive their right to a formal passing of accounts.
Personal representatives must give anyone whom they owe a duty to account such information as that party reasonably requires. For example, a residual beneficiary is entitled to a complete accounting because the residue of the estate is affected by all financial activities of the estate while a legatee (someone who is entitled to a cash gift before the residual estate is distributed) is only entitled to know that there are sufficient assets to pay their legacy.
B. Requirement to Pass Accounts
Section 99 of the Trustee Act provides that a trustee must pass accounts within two years from the date of the grant and thereafter as instructed by the court unless all beneficiaries consent. A person beneficially interested in the estate may require passing annually and if personal representatives fail to account, they may be required to attend court to show why they have not passed the accounts.
The personal representative can avoid the necessity of passing accounts if all beneficiaries consent. However, this option may not be available to the personal representative if any beneficiary is under a legal disability or is an infant. In that case the accounts must be passed in court. Rule 25-13 describes the application process and the directions the court may give on such an application.
Rule 25-13(6) sets out the prescribed form for estate accounts (see Form P40). This includes statements of assets and liabilities, capital transactions, income transactions, proposed remuneration, and distribution of the estate.