To pass the accounts of an estate in New Brunswick, an executor must prepare a detailed financial ledger of all income and expenses and present it to the beneficiaries. If a beneficiary objects, the Probate Court will hold a hearing to approve the spending and finalize the executor’s compensation.
Being named as an executor is a massive responsibility. You are legally required to manage someone else’s money, pay their final bills, and distribute their life savings. If a beneficiary feels shortchanged, they can sue you personally. To protect yourself from future lawsuits, you must prove that you managed the estate perfectly. 🔍
In New Brunswick, this process of proving your financial management is called the “passing of accounts.” Whether you are handling a small family estate in Bathurst or a complex corporate trust in Saint John, this procedure ensures transparency. By having your accounts formally reviewed and approved by the beneficiaries or the Probate Court, you secure your legal release and finalize your executor fee.
Step-by-Step Process in New Brunswick
Passing the accounts is essentially a massive bookkeeping audit. While it sounds intimidating, following a strict process ensures that the court will approve your actions. 📍
Step 1: Prepare the Estate Financial Statements
The foundation of this process is absolute financial accuracy. You, or an accountant you hire on behalf of the estate, must prepare a formal ledger. This document must clearly list the total value of the inventory at the date of death, all income received (like rent or dividends), all capital receipts from selling property, and every single expense paid out (including funeral costs, CRA tax bills, and legal fees).
Step 2: Seek Beneficiary Consent and Releases
Going to court is expensive and time-consuming, so the preferred route is an informal passing of accounts. 👥 You send the detailed financial statements to all the “residuary beneficiaries” (the people inheriting the bulk of the estate). If they agree with your math and the executor fee you are claiming, they will sign a legal document called a Release. Once all Releases are signed, you can distribute the money without needing a judge’s approval.
Step 3: Apply for a Formal Court Hearing
If a beneficiary refuses to sign the Release, or if there are minor children involved who cannot legally sign, you must pass the accounts formally. Your lawyer will file an application with the New Brunswick Probate Court. A judge will review your ledgers, listen to the objections from the unhappy beneficiary, and ultimately issue a court order declaring that your accounts are correct and approving your compensation.
How Much Does it Cost in New Brunswick?
The cost of passing accounts depends entirely on whether the beneficiaries cooperate or fight you. 💰
- Accounting Fees: Hiring an estate accountant to properly format your ledgers typically costs between $1,500 and $3,500 CAD, depending on the complexity of the assets.
- Court Filing Fees: Applying for a formal passing of accounts at the Probate Court carries a standard filing fee, generally around $75 to $150 CAD.
- Lawyer Fees: If the accounts must be defended in court against hostile beneficiaries, legal fees can range from $3,000 to $10,000+ CAD. These reasonable costs are generally paid out of the estate funds, not your own pocket.
- Executor Compensation: In New Brunswick, an executor is generally entitled to a fee of up to 5% of the total value of the estate, depending on the time and effort required.
How Long Does the Process Take?
Preparing the paperwork takes time, and court schedules can add several months to the final distribution. ⌚
| Phase of the Process | Typical Timeline in NB |
|---|---|
| Preparing the Financial Ledgers | 2 to 4 weeks after final taxes are paid |
| Waiting for Beneficiary Signatures | 30 to 60 days |
| Formal Court Hearing (if required) | 3 to 6 months to secure a date |
Frequently Asked Questions (FAQ)
Is a formal passing of accounts mandatory?
No. If every single beneficiary is an adult of sound mind, and they all review the financial statements and sign a legal Release, you can bypass the Probate Court entirely and distribute the funds immediately.
What happens if I lose some receipts?
Missing receipts can be a major problem. A beneficiary could demand that you repay the estate out of your own pocket for any undocumented expenses. Always keep a strict, organized file of every single cheque and invoice.
How much can I charge as my executor fee?
In New Brunswick, the standard guideline allows up to 5% of the estate’s gross value. However, the exact percentage depends on the “care, pains, and trouble” you endured. If the estate was very simple (just one bank account), the court or beneficiaries may only agree to 2% or 3%.
Who pays for the lawyer when passing the accounts?
Generally, the cost of hiring a lawyer and an accountant to prepare and pass the accounts is considered a valid estate expense. The money comes out of the inheritance pool before it is distributed to the beneficiaries.
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