Passing of accounts is the formal process by which a fiduciary, such as an estate trustee, attorney for property, guardian, or trustee, renders a complete, verifiable record of all receipts, disbursements, investments, compensation, and distributions for a defined period, so that beneficiaries and the court can assess whether the fiduciary has administered the property prudently and in accordance with the governing instrument. These processes matter because fiduciaries owe duties of loyalty, prudence, and transparency; structured accounting provides the evidentiary foundation for oversight, protects beneficiaries by surfacing issues early, and protects fiduciaries by obtaining approval for their decisions and compensation.

Estate trustees shoulder exacting fiduciary duties: act in the estate’s best interests, communicate, keep proper records, and avoid self‑dealing. Courts will give reasonable latitude for judgment calls, but they will also scrutinize decisions that diminish estate value or leave beneficiaries exposed. If a court finds that such actions occurred, this could be grounds for withholding executor’s compensation. The Ontario Superior Court of Justice’s decision in LaRush v. LaRush et al.[1] is a timely reminder that “good intentions” do not cure poor process, weak documentation, or tax blind spots.

Background

John LaRush (the “Deceased”) passed away in November of 2018. The Deceased had only 2 sons, Paul LaRush (the “Applicant” or “Paul”) and Mark LaRush (the “Respondent” or “Mark”). The Deceased had left a will dated September 15, 2010, (the “Will”) that named Mark and Paul as co-Estate Trustees and divided the residue of the Deceased’s estate (the “Estate”) equally between the two of them, following the payment of a few legacies.

In 2019, Paul resigned as Estate Trustee in order to begin an application for dependent’s relief and a passing of accounts. As such, Mark became the sole Estate Trustee. The Estate was comprised of the Deceased’s home, initially valued at $675,000 (the “Property”), and other assets valued at $324,858.

Rather than immediately selling the Property on an “as is” basis, Mark undertook a number of renovations on the Property in an attempt to increase its sale value. Mark’s administrative powers as an Estate Trustee under the Will permitted him to improve property for the benefit of the beneficiaries. In doing so, Mark hired out his own company to complete the renovations. The renovations ultimately increased the sale price of the Property to $1,055,000, with Mark paying himself and his company a total of $458,176.69 from the sale proceeds as reimbursement for labour and materials.

In addition, Mark claimed $72,000 in Executor’s compensation, and did so prior to the Estate being fully administered. Notably, this compensation was calculated as a percentage of the value of the Estate on an amount that included the renovation costs which Mark already reimbursed to himself.

Paul took specific issue with Mark’s claim for executor’s compensation based on a number of issues, including:

• Mark did not confirm whether all of the Estate related taxes had been paid;
• Mark did not keep adequate records in relation to the renovation of the Property; and
• Mark took a miscalculated compensatory amount prior to the administration of the Estate concluding.

Analysis

Justice Gilmore of the ONSC, in her decision, stated that the main issue in the circumstances was whether Mark fulfilled his fiduciary duties as Estate Trustee and was therefore entitled to reasonable compensation. Citing Toronto General Trusts Corporation v. Central Ontario R.W. Co,[2] Justice Gilmore held that the following five factors are to be considered in determining an Estate Trustee’s compensation:

1.    The magnitude of the trust;
2.    The care and responsibility required;
3.    The time occupied by the Trustee in performing his/her duties;
4.    The skill and ability displayed; and
5.    The success of the administration.

Justice Gilmore applied these factors in assessing whether the Respondent fulfilled his fiduciary duties.

(a) Magnitude of the trust

The Estate, comparatively, was not very large, consisting of a value of $814,874.00 after repayment of debts. As such, it did not require extensive management.

(b) Care and responsibility involved

Justice Gilmore found that Mark’s responsibilities were not significant, as all he had to do was pay out the legacies, sell the house, and pay the taxes. He did not do so in an exemplary manner. The renovation of the Property did not significantly improve the value received by the beneficiaries after the reimbursement, and the outstanding issue of the Estate’s unknown income tax remained.

(c) Time occupied by the trustee in performing duties

The renovations occurred over 14 months. As such, throughout that time, Mark was not spending a lot of time on the administration of the Estate, but rather, the renovation.

(d) Skill and ability displayed by the Estate Trustee

The renovations, while done competently, did not benefit the beneficiaries to the Estate. Additionally, Mark didn’t engage an accountant to ensure that the Estate tax liabilities were satisfied. As such, the Applicant was rightfully concerned that he could be personally liable for tax consequences arising from the Estate.

(e) Success of the Administration

Justice Gilmore concluded that the Respondent did not successfully administer the Estate for the following reasons:

1.    He engaged in a substantial renovation without a professional opinion and without fully informing his brother of the risks;
2.    He failed to pay taxes owing on the Estate’s unregistered investment;
3.    He is unable to provide evidence that funds paid to him by his brother in good faith for taxes ($48,000) were actually used to pay taxes;
4.    He paid out a mortgage on his home on the sale of Meadowvale and cannot provide evidence that those funds were used to benefit the Estate; and
5.    His recordkeeping was substandard.

Accordingly, the Court significantly reduced the claimed executor’s compensation and awarded costs on a partial indemnity basis against the Respondent.

Final Thoughts

In the end, LaRush v. LaRush et al is a timely reminder that estate trustees earn compensation, they do not assume it. It also underscores that renovations, even well‑intended and professionally executed, can diminish an estate if not grounded in sound valuation, clear beneficiary communication, and thorough documentation. Readers should ask themselves whether their own estate plans would withstand the same scrutiny, because diligence today is what prevents costly reckonings tomorrow.

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[1] LaRush v. LaRush et al., 2026 ONSC 2329

[2] Toronto General Trusts Corporation v. Central Ontario R.W. Co. (1905), 6 O.W.R. 350 (H.C.) at p.573