New York Estate Accountings Require Disclosure by a Fiduciary

The settlement of a decedent’s estate can be viewed as encompassing three stages. Estate Lawyers in New York City are familiar with this process. The first step involves the appointment of the estate representative. When a decedent leaves a Last Will and Testament the Will is filed with the Court and submitted for probate. Once the Will is admitted to probate, the Court appoints an Executor. In situations where the decedent dies intestate (without a Will), a proceeding for Letters of Administration is presented to the Court and the Court then appoints an estate Administrator.

After a fiduciary is appointed, the second stage of the estate settlement process involves the collection of estate assets and the payment debts, taxes and other obligations. As discussed in earlier posts in the New York Probate Lawyer Blog, both of the above stages can be filled with complex issues such as Will Contests and Surrogate’s Court Litigation regarding the assets and obligations of a decedent.The third and final stage of an estate concerns itself with the distribution of the assets to the estate beneficiaries. This stage typically involves an Accounting by the fiduciary of the transactions that occurred during the course of the executor or administrator’s tenure. In most cases, the fiduciary will prepare a financial accounting which details the various estate items such as principal assets, income, payments and obligations and shows the amount of the distribution that the beneficiary is to receive. When an estate is settled informally, the estate beneficiary is usually requested to sign a Release form that releases the estate fiduciary from any liability in return for the payment of the beneficiaries’ share of the estate.

When a beneficiary does not agree with the Account provided by the fiduciary, then a formal Accounting proceeding can be filed with the Surrogate’s Court to resolve all issues regarding the administration of the estate.

Sometimes the executor or administrator refuses to provide an estate beneficiary with an accounting. In this situation, the beneficiary can file a proceeding with the Surrogate’s Court to compel the fiduciary to prepare and file an Account. SCPA Section 2205 entitled “Compulsory account and related relief on a court’s own initiative or on petition; who may petition” provides for this process.

An interesting issue sometimes arises when an estate beneficiary, who is eager to receive his estate share, signs a Release for the fiduciary and agrees not to ask for an accounting.  While these situations are not common, questions can arise as to whether the beneficiary can still ask the Court to compel the fiduciary to provide an Accounting even though the beneficiary had signed a Release and appeared to have waived his right to obtain the Accounting.

In a recent case decided by Manhattan Surrogate Rita Mella on January 15, 2016 entitled Petition for Bronner, the Court was called upon to consider this issue. In Bronner, a trust beneficiary had signed release forms in which she had also waived her right to receive an Accounting. The beneficiary then filed a petition with the Court to compel the trustee to account. In turn, the trustee had sought to dismiss the proceedings based upon the signed releases. In its decision, which involved the denial of the beneficiary’s motion for summary judgment, the Court pointed out that the effectiveness of the releases would depend upon whether the releases were fairly obtained by the fiduciary. The Court noted that fiduciaries must show that a beneficiary was adequately made aware of the nature and legal effect of release transactions. Ultimately, the Court decided that a hearing was needed to determine the circumstances regarding the execution of the releases.

I have represented estate fiduciaries and beneficiaries in Surrogate’s Court Accounting proceedings. If you have a question regarding an accounting or other estate matters, call me now to discuss your issue.

New York Probate Attorney Jules Martin Haas has helped many clients over the past 30 years resolve issues relating to estate accountings and estate settlement in Manhattan and Queens County and other New York Counties. If you or someone you know have any questions regarding these matters, please contact me at (212) 355-2575 for an initial consultation.

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