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.