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Useful Information About Accounting In New York Estates

An estate fiduciary can be an Executor, Administrator or Trustee. All fiduciaries have various duties and responsibilities. When a fiduciary fails to fulfill one of these obligations he may be found to have breached his fiduciary duty.

One of the most important duties of a fiduciary is to provide beneficiaries with an accounting of his financial activities. The New York Probate Lawyer Blog has discussed accounting proceedings in many earlier posts. In an accounting, there will be numerous schedules detailing the transactions that were engaged in. For instance, in Schedule A there will be a list of assets that were collected. Another Schedule provides details regarding income received during the time period of the account. Yet another Schedule will provide the items of expenses and payments that were made.During the course of his tenure, a fiduciary may be requested by a beneficiary to provide an accounting. The most common situation is when an estate is coming to an end and a final settlement is required. The estate executor or administrator may send an informal account to the estate beneficiaries for their approval. When the beneficiaries refuse to informally settle the estate and approve an accounting, then a formal accounting proceeding must be filed with the Surrogate’s Court. Formal accountings involve the filing of Objections, discovery of documents and depositions and a hearing by the Court. The settlement of an estate in these proceedings can be time consuming and costly.

When a fiduciary refuses to provide or file an accounting, the Court may suspend or revoke his letters of appointment. A proceeding in the Surrogate’s Court can be commenced by a beneficiary to compel a fiduciary to file an accounting.   Surrogate’s Court Procedure Act (SCPA) Section 2205 entitled “Compulsory account and related relief on a court’s own initiative or on a petition; who may petition” along with SCPA 2206 “Compulsory account and related relief; proceedings thereupon”, provide the procedure for these matters.

As noted above, a fiduciary’s appointment can be suspended or revoked if he fails to abide by a Court direction to account. This was the outcome in a Brooklyn Estate in the case of Matter of Hortensia R. Allen Irrevocable Grantor Trust, decided by Brooklyn Surrogate Margarita Lopez Torres on March 5, 2018. In Allen, one of the trustees failed to file an account with the Court as directed by a Court Order. After reviewing the trustee’s acts along with the violation of the Court Order, the Surrogate suspended the trustee’s appointment pending a full hearing to revoke his continued service as a trustee.

I have represented many individuals in commencing compulsory accounting cases. In other cases I have assisted fiduciaries in preparing accountings and filing them with the Court. If you have a question regarding an Estate or Trust accounting, call me now for a free review.

New York Probate Attorney Jules Martin Haas has helped many clients over the past 30 years resolve issues relating to Probate, Administration and estate settlement throughout New York City including Brooklyn and Queens. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial consultation.

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