Tag: executor compensation
Although beneficiaries have a right to compel an accounting from an Estate Trustee, it is not always advisable to do so. The decision of Pochopsky Estate provides an example of such a situation.
Here, practically all of the deceased’s assets passed outside of the estate. Although, there was some concern as to whether a joint account held between the deceased and his sister was an estate asset, subsequent evidence was given to the Estate Trustee, including an affidavit from the bank, indicating that the account was not an estate asset. Accordingly, the Estate Trustee, a friend of the deceased, concluded that there was no money that passed through the estate.
The residuary beneficiaries nevertheless requested that the Estate Trustee proceed against the sister for the joint account and obtain a Certificate of Appointment. In addition, a formal passing of accounts was sought.
The Estate Trustee thought none of these steps were appropriate given the size of the Estate, and indicated that if forced to formally pass his accounts, he would seek his costs from the residuary beneficiaries.
The residuary beneficiaries obtained an ex-parte Order for the Estate Trustee to pass his accounts. Although not mentioned in the decision, for an interesting read on the appropriateness of ex-parte motions, Justice Brown’s decision in Ignagni Estate (Re), is a good one.
On the passing, the Court found that the objections raised by the residuary beneficiaries were ‘ill-founded’, and that they fell into a pattern of aggressively criticizing the Estate Trustee no matter what he did. Given the size of the estate, the Court ordered that the residuary beneficiaries personally pay the costs of the Estate Trustee in the amount of $17,445.60, and that no costs would be payable to these beneficiaries.
Please consider these other interesting Passing of Accounts related blogs:
Sekulich v. Sekulich, 2012 ONSC 1594 is an interesting instance in which the Applicants were denied relief but nonetheless were entitled to their costs. The Application, brought by jaded beneficiaries, sought inter alia removal of the estate trustee and a declaration that he not be entitled to any compensation. This latter objective was sought prior to the estate trustee having produced any accounts.
The Court considered Re Jeffery Estate,  O.J. No. 1852 (Surr Ct.) and the oft-quoted five factors which are determinative in assessing compensation:
(a) the size of the trust;
(b) the care and responsibility involved;
(c) the time occupied in performing the duties;
(d) the skill and ability shown; and,
(e) the success resulting from the administration
The Court went on to note that "..the audit judge should first test the compensation claims using the percentages approach and then…cross-check or confirm the mathematical result against the five-factors approach….Hence, it is necessary to have the Accounts of the estate and the compensation sought by the Estate Trustee before the court in order to determine the amount of compensation sought by the Estate Trustee. Therefore the motion to deny the Estate Trustee any compensation is dismissed but strictly without prejudice to the right of the applicants to argue that he is not entitled to compensation for the reasons urged upon this court, in the event he should seek compensation."
Notwithstanding that the relief was not granted, the Court was sympathetic to the plight of the applicants (they were young, in need, and there had been excessive delay) and ordered costs against the estate trustee.
David Morgan Smith – Click here for more information on David Smith.