A New York Executor, Administrator or Trustee has many powers and obligations. As a fiduciary, such appointments require that a full record and account of activities be maintained so that an accounting can be provided to the estate or trust beneficiaries.
It is not uncommon for a beneficiary to complain that he did not receive either an accounting from a fiduciary or the full share of assets that he feels he was entitled to. The New York Probate Lawyer Blog has discussed in previous posts that the Surrogate's Court Procedure Act ("SCPA") provides a remedy when a beneficiary asserts that an accounting has not been provided. SCPA 2205 sets forth that the Court may issue an order that requires a fiduciary to file an account. Typically, the aggrieved beneficiary will prepare and file a Petition with the Court and a Citation is issued directing the fiduciary to appear in Court and state why he should not be required to file the account. Since the preparation of an accounting is fundamental to the completion of the fiduciary's job, the Surrogate will almost always require the filing. If the fiduciary fails to appear on the Court date or does not comply with the Order to file, the Court may suspend or remove the fiduciary.
A New York Estate Attorney will usually represent an Executor, Administrator or Trustee in an accounting proceeding. Very often, the services of a fiduciary accountant are used to prepare the detailed schedules that are part of the papers to be given to the beneficiary and the Court. The schedules must be in accordance with the requirements of the estate rules. SCPA contains an Official Form 12 which is an Account of Executors and Administrators. Official Form 13 is an Account for Trustees.
While the Surrogate usually directs a court filing of a formal accounting, the Court appears to have some leeway in its determination. A recent decision by New York Surrogate Nora Anderson entitled Estate of Jean Kennedy decided on June 12, 2013 and reported in the New York Law Journal on June 21, 2013 is instructive. In Kennedy, Surrogate Anderson declined to require an Executor/Trustee to file a formal judicial accounting. The Judge ruled that such filing would not be in the best interest of the estate at the present time since the fiduciary had provided an informal accounting, was willing to provide the beneficiary with all requested financial information and it appeared that the beneficiary's interests had already been satisfied with other assets.
I have found that a claim of breach of fiduciary duties and the failure to account to a beneficiary are very common aspect of Estate Litigation in the Surrogate's Courts. While the New York Estate laws are very helpful and protective of the interests of beneficiaries, the Kennedy case shows that judicial decisions often reflect the needs of the particular facts and circumstances of the case.
Therefore, consultation with a New York Trusts and Estate Lawyer regarding fiduciary breaches and accounting requirements is important in order to present a matter to the Court in an appropriate fashion. As they say, one size does not fit all.