The Quebec Court of Appeal took the case of Guy Turcotte under deliberation but did not specify when it would hand down its ruling.
Turcotte was granted bail two months ago pending his trial in September 2015 on two counts of first-degree murder in the stabbing deaths of Olivier, 5, and Anne-Sophie, 3, in 2009.
The appeals court agreed last month to hear the Crown's case against the bail decision handed down by Superior Court Justice Andre Vincent.
Vincent argued that Turcotte does not represent a danger to society and is entitled to the presumption of innocence as he awaits the new criminal proceedings.
The Crown believes Vincent erred when he said releasing Turcotte would not undermine the public's faith in the judicial system.
A jury found Turcotte not criminally responsible in 2011 and he was released from a psychiatric institution the following year.
The appeals court overturned that verdict last November and ordered a new trial.
On Monday, the mother of the slain children spoke to reporters before and after the court hearing and said she is afraid of her ex-partner.
"I dream at night that he will attack me, that he will come to our house," Isabelle Gaston said before the proceedings. "I moved, I made the (phone) number confidential. I hear sounds and I'm afraid and when people come to visit, I jump."
After the hearing, Gaston made a plea with Turcotte, who was not at the courthouse.
"Guy, if you're watching TV, I hope you can savour the freedom to look at the sun and the clouds and think of your children, if only for them," she said.
"I beg you to look for the reasons that made you commit these gestures, even though it won't bring back the beautiful kids I had."
Vincent laid out several bail conditions for Turcotte, including keeping the peace, respecting a 6 p.m.-6 a.m. curfew, reporting to provincial police twice a month and continuing his psychiatric treatment.
He must also stay with his uncle, while his brother had to post a $100,000 bond. Turcotte is also prohibited from being within 100 metres of Gaston's residence.