Passing of Accounts (WA)
An executor named in a person’s will has the responsibility of carrying out the wishes of the deceased. Executors are required to act in the best interests of the estate and the beneficiaries. They must not act in their own personal interest if this conflicts with that of the estate and beneficiaries. Executors are accountable to the beneficiaries and the Supreme Court of Western Australia, and this is why it is important that they carry out the role correctly, as they will be personally liable if they fail to do so.
Executors are responsible for managing, calling in and protecting all of the deceased’s assets until they are distributed. It is also important that the executor arranges for all of the deceased’s liabilities to be paid. Depending on the assets in the estate, an executor may also need to apply to the Western Australia Probate Registry for a Grant of Probate. It cannot be forgotten that the executor is also responsible for lodging the deceased’s and the estate’s final tax returns. In WA, an executor is also responsible for the passing of accounts, which means filing all financial records relating to the deceased estate in the Supreme Court.
What is the passing of accounts?
An extremely important role of an executor is that they should keep complete records of the financial position of the estate and how it has been distributed, which should be provided to the beneficiaries. In Western Australia, under the Non-Contentious Probate Rules 1967, every executor and administrator (excluding the Public Trustee of Western Australia) has a duty to file their accounts relating to a deceased estate in the Supreme Court of Western Australia. This is known as passing of accounts.
Often circumstances will arise where a beneficiary feels as though an executor is not communicating with them and has failed to provide them with proper accounting of the estate. Where a beneficiary has exhausted avenues to seek this information from an executor on multiple occasions and the executor has failed to provide it, a beneficiary does have recourse to obtain this information.
What if the executor is not keeping proper records or has failed to pass accounts?
In Western Australia, under the Non-Contentious Probate Rules 1967 an executor must pass accounts within 12 months of the date probate was granted or within further time that the court allows. If a beneficiary is concerned that the executor and/or administrator has failed to pass accounts within the timeframe prescribed it will often be in the best interests of the beneficiary to force the executor and/or administrator to pass accounts.
A beneficiary can compel the executor and/or administrator to file and pass accounts under section 44 of the Administration Act 1903 by filing an Application in the Supreme Court of Western Australia. To complete this application, the plaintiff must swear an Affidavit of Verification which includes the following:
- A copy of the will and Grant;
- The Applicant’s interest set out clearly;
- A clear statement of any distributions made to the beneficiaries to date; and
- All correspondence that requests these accounts or explanations for the delays, and responses from the executor.
Whether or not the Supreme Court of Western Australia does make an order for the executor to file and pass accounts, will depend on any accounts provided to the beneficiary by the executor to date, the simplicity of the estate and whether any reason for the delay has been appropriately explained to the beneficiary by the executor.
The account to be filed by the executor will have to contain full particulars of receipts, disbursements, assets, liabilities and the distribution of all of the estate assets. The executor cannot resist this application to file the account unless they are able to provide evidence that the estate was simple and adequate information has been provided to date. If the Executor fails to file the account, the Registrar of the Supreme Court of Western Australia can apply by summons to remove the executor or make other such order they deem appropriate.
Other beneficiaries of the estate who are not compelling the executor to pass accounts and believe their interests will be affected by this separate application to pass accounts, have the right to file a Notice of Intended Objection to the passing of the accounts.
It is important to note that the passing of accounts under the Non-Contentious Probate Rules does not provide a remedy to the beneficiary who has lodged the application if an item in the account is incorrect or not allowed. If there are breaches of executor’s duties apparent in the account or items that are incorrect, the only remedy a beneficiary has is to commence a civil action.
If you are a beneficiary of an estate in Western Australia where the executor has failed to pass or provide accounts, or there has been an unreasonable delay in the executor doing so, Armstrong Legal can assist you.
If you require legal advice or representation in any legal matter, please contact Armstrong Legal.