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A New York Compulsory Accounting May Be Requested By An Estate Creditor

The Executor or Administrator of an estate owes a duty of fair dealing to all of the estate beneficiaries.  A New York Estate Lawyer who represents the estate fiduciary is aware that there must be a full accounting in order to finally settle the estate affairs.

In most cases, the estate fiduciary will prepare an estate accounting which specifies all of the assets and income that was collected by the estate. The accounting also lists all of the debts and administration expenses which were paid out of estate funds. The New York Probate Lawyer Blog has posted a number of articles discussing accountings in an estate. When the account is prepared, all of the estate beneficiaries have an opportunity to review the various schedules and to inquire as to any matters that might be questionable. This process is usually done on an informal basis. Once all of the interested parties are satisfied with the accounting, they typically sign a Release form that provides that they have no objection to the information in the accounting and thereby release the fiduciary from any claims they have regarding the fiduciary’s conduct in administering the estate.When the parties cannot reach an informal agreement, the fiduciary, such as an Executor or Administrator, must file his accounting with the Surrogate’s Court for approval. This is known as a formal accounting proceeding. In some instances, a fiduciary will fail or refuse to file an accounting or provide an informal accounting to the parties. When this occurs, Surrogate’s Court Procedure Act (SCPA) Section 2205, entitled “Compulsory account and related relief on a court’s own initiative or on petition; who may petition”, allows interested parties to bring a Court case to compel a formal accounting. Among the interested parties that may bring this proceeding is a creditor of the estate.

In a recent case decided by Bronx Surrogate Nelida Malave-Gonzalez on June 1, 2016 entitled Estate of Bullard, a creditor commenced a compulsory accounting proceeding. The creditor wanted the estate executor to file an accounting. In Bullard, the executor tried to have the proceeding dismissed. However, the Court refused to dismiss the proceeding and directed the executor to file the account with the Court by a certain date. Generally, the Surrogate’s Courts require a fiduciary to file an account within a 30 to 60 day time frame. This is because it is a fundamental fiduciary duty to prepare and provide an accounting.

I have represented many beneficiaries and fiduciaries in connection with Surrogate’s Court accounting proceedings.  Fiduciary accounts can be very complex and it can take a long time to review and analyze the financial information contained in the many schedules.  When a beneficiary determines that there is information in an accounting that is questionable or improper, the beneficiary can file Objections to the Accounting.

New York Trusts and Estates Attorney Jules Martin Haas has helped many clients over the past 30 years resolve issues relating to estate accounting issues throughout New York City including Manhattan and Brooklyn. If you have any questions or concerns regarding a fiduciary accounting, please contact me at (212) 355-2575 for a free consultation.

Jules Martin Haas provides his clients and members of the community with a free monthly e-newsletter which contains articles covering a variety of legal topics including estate planning, financial matters and real estate. If you wish to be placed on the e-newslist, simply e-mail me at jules.haas@verizon.net. You can cancel receiving the newsletter at anytime.

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