Did You Know New York Executors and Administrators Need to Prepare Estate Accountings

accounting-300x199A New York estate is administered by an Executor or Administrator.  An Executor is appointed when a Last Will is admitted to probate.  The appointment of an administrator occurs in a case when the decedent dies intestate without leaving a Will.

The job of the estate fiduciary encompasses many functions.  First and foremost, the decedent’s assets need to be discovered and collected.  This process may be time consuming but is very important.  If a fiduciary fails to properly protect and collect assets he may be held personally liable due to a breach of fiduciary duty.

Next, the estate fiduciary is responsible for handling all estate administration matters such as paying debts, claims, expenses and taxes.  This aspect of estate settlement can take a lot of time and effort.  Sometimes the settlement of debts and claims may involve estate litigation in the Surrogate’s Court.  Generally, the administrator or executor cannot settle an estate and make a distribution to estate beneficiaries prior to seven months after appointment without first resolving all estate claims.  If a distribution is made before the end of the seven-month time period, the fiduciary may be personally responsible to pay any open debts or claims.

The final stage in estate administration is the accounting process.  At the time an estate is ready to be finalized, the fiduciary must provide the beneficiaries of an estate with a written accounting.  This is a financial statement which contains lists of the assets and income collected and the items paid or due to be paid from the assets of the estate.  Depending upon the size and complexity of the decedent’s estate, an accounting may be only a few pages long or may report dozens of transactions stretching for 20 or more pages.  Article 22 of the Surrogate’s Court Procedure Act provides the procedure for accountings.

During the accounting phase, all parties interested in the estate have a right to review and, if needed, to object to various acts and transactions performed by the fiduciary.  A contested accounting case may delay the final settlement of an estate for months or even years.  There may be allegations that an administrator or executor breached a fiduciary duty by failing to properly collect assets, or did not prevent a loss of asset value or made improper payments.  There is seemingly an endless variety of issues that can be the subject of estate disputes during an accounting proceeding.  The resolution of claims against the estate and even kinship determination can be part of the accounting case.

A recent Manhattan estate case decided by Manhattan Surrogate Nora Anderson on March 11, 2020 entitled Matter of Estate of Dorsi, provides an example of issues that may be presented in an accounting case.  In Dorsi, there was a contested accounting where objections were filed to the executor’s accounting.  The executor requested that the Court dismiss some of the objections.  One of the objections alleged that the executor did not properly value the decedent’s assets.  The Court dismissed this objection since there was no evidence provided by the objectant to support the claim.  However, the Court refused to dismiss other objections relating to whether the executor improperly included other assets in the accounting.  There were also objections regarding creditors’ claims that the objectant asserted should have been chargeable against the estate.  The Court reviewed these matters and, to a large extent, dismissed these objections.

The important point of Dorsi is that all items reported in an accounting, as well as any objections that may be asserted in the case, must be closely analyzed so that an estate is properly settled.  I have represented executors, administrators, beneficiaries and objectants in accounting proceedings in the Surrogate’s Court.  These matters may be complicated and the assistance of a New York City accounting attorney may be essential.  Call Me Now for a free confidential review of your accounting or estate issue.  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.

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