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An Informal Accounting Can Settle a New York Estate and Preclude a Judicial Accounting

shutterstock_1554045275-300x185The settlement of a New York estate can be very complicated and involve many different issues.  In fact, due to various problems, some estates may take years for estate settlement.  However, there are three basic components to the process of administering an estate.

First, there are proceedings concerning the appointment of a fiduciary such as an Executor or an Administrator.  When a decedent leaves a Last Will and Testament, a probate proceeding is initiated to have an Executor appointed.  When a Will is admitted to probate the Court issues letters testamentary to the appointed fiduciary.

If a decedent dies intestate, then a petition for letters of administration is filed with the Surrogate’s Court.  Letters of Administration are granted to the appointed estate administrator.  The New York Probate Lawyer Blog contains numerous posts regarding probate and intestate estate administration.

The second phase of an estate concerns the collection of estate assets and the payment of liabilities, expenses and taxes.  There are countless issues that may arise during this phase, including Court actions to recover assets that may be withheld from the fiduciary or defending the estate against lawsuits for alleged debts or other claimed liabilities.  The estate may need to evict tenants from real property or recover a deed that was wrongfully transferred prior to a decedent’s death.

The third and final phase for an estate involves accounting for the activities of a fiduciary and distributing the estate net funds to beneficiaries.  This process usually involves the preparation of an accounting.  An accounting contains a written record of the various transactions engaged in by the fiduciary including the assets and income collected, the various expenses and payments made, and the net balance available for distribution.

Most estates are settled by having a fiduciary provide the beneficiaries with an informal written accounting which they can review and ask questions about.  When a beneficiary is satisfied that the accounting fairly and accurately reflects the actions of the executor or administrator, a receipt and release form can be signed.  This form essentially acknowledges that the account is accepted and releases the fiduciary from further liability.  It provides a simple and expeditious way for an estate to be settled.  If an informal settlement cannot be obtained from all interested parties, then a formal judicial accounting is needed.  This requires extensive Court proceedings lasting many months, if not longer.  Objections can be filed to a judicial account and the parties are entitled to discovery and a Court hearing.

In a recent Bronx estate case, estate beneficiaries had signed releases and waivers after having received and reviewed an informal accounting.  Based upon these release documents, the estate administrator had distributed the estate funds.  The case was entitled Estate of Advani, and was decided by Bronx Surrogate Nelida Malave-Gonzalez on July 12, 2021.  In Advani, the beneficiaries, after receiving their distribution, filed a proceeding for a compulsory judicial accounting with the Court.  The Surrogate noted that the parties had received an informal accounting and had a full opportunity to review it with an attorney and accountant.  Moreover, the parties seeking the judicial review failed to demonstrate any bad faith or other wrongdoing on behalf of the administrator.  As a result, the Court dismissed the petition for a compulsory accounting.

I have represented clients in many estate settlement cases involving probate of a Will or intestate administration.  The assistance of an experienced estate lawyer can be essential.  Call Me Now for a free confidential review of your estate or guardianship issue.  We offer 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.

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