Fiduciaries in New York such as executors, administrators and trustees are obligated to account to the beneficiaries. This means that estate and trust beneficiaries can request that they be provided with a financial accounting of the fiduciary’s activities. An account typically has specific information contained in various schedules showing the assets and income received, the investments made, the expenses and debts that are charged against the assets and the balance of funds or assets remaining on hand.
Depending upon the nature of the trust or estate, the accounting may be simple or complicated and encompass dozens or more pages. Most often, a beneficiary will receive an informal accounting meaning that the accounting will not be part of a formal accounting proceeding in the Surrogate’s Court. In this context, the fiduciary and beneficiary can discuss the issues and information presented in the account and reach an accommodation and settlement which approves the account.
In other situations, a formal accounting proceeding may be needed. These matters involve extensive estate litigation such as discovery in the form of document production and witness testimony. Objections to the account must be filed by the beneficiary. These can be based upon breach of fiduciary duty such as misappropriation of assets or other improper acts.
Accounting proceedings in the Surrogate’s Court can be complicated and consultation with a New York trust and estate lawyer can be essential. A recent Manhattan accounting case decided by Manhattan Surrogate Nora Anderson on November 23, 2020 entitled Matter of de Sanchez, provides an interesting example of issues presented in accounting matters.
In de Sanchez, a personal representative of a decedent’s estate brought a compulsory accounting proceeding against a trustee of the decedent’s lifetime or living revocable trust. These types of trusts are created by a grantor while alive with provisions that allow the grantor to revoke them at any time. The trustee in this case opposed any liability for an accounting. The trustee claimed that the decedent had revoked the trust prior to her death and the trustee had at that time sufficiently accounted to the grantor thus relieving the trustee of any further duty or obligation to maintain records or financial responsibility. The Court reviewed all of the evidence which dated back many decades. It was found that the trust was revoked and the trustee satisfied any need to account during the grantor’s lifetime. As a result, the objections to the trustee’s limited responsive accounting were dismissed.
I have represented both fiduciaries and beneficiaries in accounting cases. If you have a question or concern about an estate or trust or guardianship matter, Call Me Now for a free confidential review. We provide reasonable and flexible fee arrangements and personal representation.
New York Trusts and Estates Attorney Jules Martin Haas has helped many clients over the past 40 years resolve issues relating to guardianship and probate and estate settlement throughout New York City including the Bronx, Queens, Brooklyn, Manhattan, Nassau and Suffolk County. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial free consultation.