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New York City Estate Accounting – Don’t Get it to a Challenge, But if You Do, Win it.

The personal representative of a New York estate has the responsibilities of compiling an inventory of estate assets and may be called upon to prepare an accounting. The accounting is used to determine the total value of the estate for estate tax purposes and to make sure there are sufficient assets to pay creditor’s claims and other claims filed against the estate. A beneficiary, heir or other interested party to a New York estate has the right to request, review and challenge an estate accounting and/or a personal representative’s decisions to prevent financial losses or recover losses to the estate, beneficiary or interested party.

The personal representative makes all decisions regarding which assets to sell when there are not enough assets to pay claims or when the personal representative determines that the sale of an asset is in the best interests of the estate and the beneficiaries. However, it is best to obtain waivers from all beneficiaries for any substantial transaction in the estate. Otherwise, an administrator may find that beneficiaries disagree with a decision, and an accounting fight might ensue.

Winning an Accounting Dispute
If the accounting does get to a dispute, make sure you win it. In order to win an accounting challenge with the New York Surrogate’s Court, the party filing the litigation action must have sufficient grounds such as the fiduciary/personal representative mismanaged an estate asset or made a bad business decision. Under New York estate laws, a fiduciary of an estate can be held personally liable for any financial losses caused to the estate or the beneficiaries. The court could order the fiduciary to pay restitution to the estate, remove the fiduciary and appoint a new personal representative if the find the fiduciary breached a fiduciary duty.

Example:
A beneficiary to a New York estate, disagrees with the accounting the personal representative prepared reflecting the fair market value of the estate’s house at $1,000,000. You obtain an independent appraisal reflecting the house is worth $1,500,000. You are concerned that the personal representative is mismanaging the estate’s assets by not providing you with an adequate appraisal of the property. Therefore, you consult with a New York probate and estate attorney and instruct the attorney to file a litigation matter with the New York Surrogate’s Court challenging the accounting and the fiduciary’s actions.

Since accounting challenges typically require the detailed review and analysis of financial and legal documents as well as a clear understanding of the New York estate litigation process, the expertise of a New York probate and estate attorney is generally required. If you are involved in a New York estate accounting challenge, an attorney can review the accounting to determine if there are legal grounds to challenge the accounting and represent you in connection with an estate litigation matter.

We represent estates, personal representatives, beneficiaries, creditors and interested parties involved in estate litigation disputes, including will contests and accounting challenges as well as routine estate administration matters. If you wish to speak to a New York estate attorney, call the Law Offices of Albert Gurevich at (212) 233-1233.