Being an executor of an estate and a trustee of a trust comes with significant responsibilities. One is providing an accounting to the beneficiaries of the estate or trust. Our trust and estate lawyers can guide you through this process as part of our New York estate administration and trust administration services.

Executors and trustees are fiduciaries, meaning they owe a duty of care to the estate’s beneficiaries or trust. To confirm that the executor or trustee has satisfied fiduciary duties in New York, it’s important to provide an accounting at certain times during the administration of the estate or trust.

Usually, the executor or trustee will provide an accounting to the beneficiaries prior to either a partial or final distribution. First, they request the beneficiaries execute a Receipt, Release, Refunding, and Waiver Agreement designed to protect the executor or trustee from liability resulting from their fiduciary duties in New York.

Beneficiaries May Request an Accounting

There are situations when a beneficiary will request that the executor or trustee provide an accounting. This may be a formal or informal accounting, depending on the request. Regardless, the fiduciary has a responsibility to provide an accounting when requested. It’s preferable to provide an informal accounting. However, sometimes the beneficiary will request a formal judicial accounting, which can be more involved, costly, and subject the fiduciary to a court proceeding. Our trust and estate lawyers can step in for support during estate and trust administration in New York.

Other Interested Parties May Request an Accounting

During New York estate administration and trust administration, creditors and a surety company (if a fiduciary bond is involved) may also request an accounting. These requests will likely be a formal judicial accounting.

The Court May Demand an Accounting

In certain cases, the court can even demand an accounting from the fiduciary. This is typically the case when the fiduciary is requesting to resign, when there’s a request for the fiduciary to be removed from their executor or trustee role, or when the term of the fiduciary duties in New York has ended, such as when there is a preliminary executor or temporary administrator.

If the fiduciary fails to provide an accounting to a beneficiary or an interested party, then the beneficiary or interested party can petition the court to compel the fiduciary to provide a judicial accounting.

If the fiduciary fails to provide an accounting demanded by the court, then the fiduciary can be held in contempt of court and suffer significant legal ramifications.

A Fiduciary May Provide an Accounting Even if None is Requested

In some cases, no one has requested an accounting, and beneficiaries are willing to execute the appropriate Receipt, Release, Refunding, and Waiver Agreements. In these circumstances, it may seem that no accounting is necessary. However, in some cases, it may be wise for the fiduciary to petition the court for a decree from the court judicially settling the accounts of the estate or trust.

This kind of judicial decree is like a stamp of approval from the court and could help avoid or defend accusations of wrongdoing of the fiduciary.

Additionally, if a fiduciary bond has been issued, you may need to get a final decree from the court settling the estate to have the bond discharged.

The bottom line is that there are a number of circumstances during New York estate administration and trust administration in which a fiduciary should provide an accounting. It’s important to seek the advice of qualified estate and trust lawyers whenever an accounting is involved.

If you are an executor or trustee with fiduciary duties in New York, it’s important to consult with and retain experienced trust and estate lawyers. The knowledgeable and compassionate team at Russo Law Group, P.C., provides professional services and advice regarding estate planning, estate and trust administration in New York, as well as long-term care expenses, asset transfers, gifting, penalty periods, pooled trusts, and more. Take advantage of our comprehensive website as well as our free seminars and webinars to learn more about how Russo Law Group, P.C. provides peace of mind.

Please contact our law firm to speak with one of our experienced elder law and estate planning attorneys today at 1 (800) 680-1717.