Administration of Property Held for Others Under Statutory Authority
By Nizam Shajani. CPA, CA, MBA
October 30, 2020
As your parents and grandparents age, you may find yourself in a position where you need to assist them with the management of their financial affairs. Taking on this responsibility requires an understanding of what is or may become involved in financial reporting.
Passing of accounts is the process by which formal accounting records for the assets of a trust or estate, including the “estate” of a living person, are submitted by the trustee, attorney, guardian, or other person in charge of managing the financial affairs and property on behalf of another person to the court for approval. As such, you should always be prepared to pass accounts should you be called upon to do so.
The public trustee is a government official who is charged with the responsibility of protecting the interests of the vulnerable and incapable persons under provincial law. Public trustee may have a prima facie authority to manage the financial affairs of an individual found to be incapable. The public trustee will defer to an attorney under a power of attorney or a court appointed guardian.
A guardian is the person appointed by the court to manage the financial affairs of an incapable person. If power of attorney for property has been granted, the person appointed will have the authority to act. If no arrangements have been made to manage the financial affairs of an incapable person, the courts will appoint a guardian (or public trustee). Application for guardianship require notice to interested parties. This application may also require a posting a bond, management plan, regular reporting and accounting to the public trustee, assessment of capacity of the individual who’s assets are being managed, notice to and consent of relatives and discloser of the relationship to the incapable person and reason for appointment.
Court appointed guardians have a fiduciary duty to act in the best interest of the incapable person and to account for their management of property. There is no duty to preserve the capital of the estate for the benefit of potential estate beneficiaries.
Shajani is well position to provide support to guardians, including annual statements and the compilation of passing of accounts.
This information is for discussion purposes only and should not be considered professional advice. There is no guarantee or warrant of information on this site and it should be noted that rules and laws change regularly. You should consult a professional before considering implementing or taking any action based on information on this site. Call our team for a consultation before taking any action. © 2020 Shajani LLP