Forcing an Executor to Report Income of the Estate’s Business
When there is a family business as part of the estate, it is likely that the beneficiaries are due to inherit part or all of it in order to keep the business ownership within the family. However, when the executor of the estate has total control over the family business and is not sharing information about that business with the heirs of the estate, those heirs can become frustrated by not knowing what the status of the business is. With the help of a New York estate attorney, beneficiaries or other interested parties that need to know what is happening with a business that belongs to the estate do have legal options to get the information about that business that they need.
New York law allows for any interested party, such as creditors or beneficiaries, to demand an accounting from the executor as to what the financial state of the estate is. At that point, it is the executor’s responsibility to turn over the financial information to the interested party.
However, there will be times where the executor does not do what is necessary when it comes to an accounting. At this point, the beneficiary or other interested party can file a petition with the Surrogate’s Court to compel the executor to turn over an accounting or other information about the estate.
Beneficiaries of the estate are not limited to only asking about assets of the estate but are also allowed to demand an accounting of the state of a family business that is part of the estate. If, after requesting information about the estate, the beneficiary or other interested party has the right to ask the court to force the executor to turn over information about a business belonging to the estate. The information that an executor has to turn over is not limited to regular estate assets, such as bank accounts, but also includes information about the operations of a business held by the estate. This is because it is likely that information about the family business is likely going to affect the beneficiary’s interest in the estate and the business.
For an Executor who do not comply, they can be compelled to provide an accounting. If an accounting is incomplete, that’s a fact that will need to be brought to the court’s attention and the court will then compel the Executor to provide the full and complete information to the beneficiaries.
Some businesses are cash-heavy, making it difficult for beneficiaries to prove to the court what the income of the business is. There are many methods that a New York estate attorney might use, sometimes in conjunction with a private investigator and an accountant, to determine what the proper income is that should be going to the estate. If that income is not coming into the estate, the executor can be personally surcharged with the income.
Hiring a New York estate attorney is your best option when the executor is not turning over the information that you are owed about the estate. If you are dealing with an executor who is not turning over an accounting you asked for, or is otherwise keeping you in the dark about the family business, it is important to correctly handle the situation, within any time limitations or special procedures required, so that you can protect your rights as a beneficiary.
Call the Law Offices of Albert Goodwin at (212) 233-1233, New York estate, guardianship, wills, trust, medicaid and probate lawyer, and make an appointment to discuss.