An accounting is the fiduciary’s full statement of what came into the estate or trust and what went out: what the assets were worth, what was sold and for how much, what was paid to whom, what was taken as commission and paid to the lawyers, and what is left. New York has a fixed set of schedules for it. But nothing requires a fiduciary to prepare one on their own initiative. In most estates the beneficiaries are satisfied with the distribution, sign receipts and releases, and no accounting is ever drawn up. The accounting becomes an issue when a beneficiary is not satisfied and asks for one, when the fiduciary wants a decree that ends all claims, or when the court insists because a beneficiary is a minor, unknown, or a charity.
When an accounting is called for, it takes one of two forms. An informal accounting is delivered to the beneficiaries with the records behind it, and if they are satisfied they sign receipts and releases. A judicial accounting is filed with the court, everyone with an interest is cited, objections are heard, and a decree settles the account. Which one an estate needs depends on the beneficiaries and the history. Call 212-233-1233 or email [email protected].
Where Does the Accounting Stand?
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Accounting Matters We Handle
Preparing the Accounting
When one is demanded or needed: the schedules, the backup, the commission computation, and the reconciliation that has to balance to the penny. An accounting prepared in the court’s format can go to the beneficiaries informally and, if it comes to that, to the court without being redone. See informal accountings.
Compelling an Accounting
A fiduciary does not have to account until asked. Once asked, they must, and seven months after letters issue a beneficiary can petition to compel it; the court will order it. A fiduciary who ignores the order can be held in contempt and removed. See when an executor refuses to account and SCPA 2205.
Objecting to an Accounting
Objections identify the specific entries in dispute, the grounds, and the relief sought: a surcharge, a disallowed expense, a recomputed commission, an asset added. They are due by the return date of the citation. Discovery and, if necessary, a hearing follow.
Defending an Accounting
Objections are answered with the records: the appraisal that supports the sale price, the invoices behind the expenses, the reasons for the investment decisions. A well-documented account survives most objections, and the estate pays for its defense.
Surcharge
When an objection is sustained, the court orders the fiduciary to make the estate whole personally: the loss on an imprudent investment, the shortfall on a below-market sale, interest on money held too long, fees and commissions returned. See breach of fiduciary duty.
Commissions and Fees
Executors and administrators are paid on a statutory sliding scale; trustees on a different one. Attorney’s fees paid from an estate are subject to the court’s review under SCPA 2110. Both are common objections and both are computed on the accounting.
Trust Accountings
Trusts run for years and separate principal from income, so their accountings are longer and the Prudent Investor Act governs what the trustee did with the money. See whether a trustee must account and beneficiaries’ rights to trust information.
Receipts and Releases
The document that closes an informal accounting. A beneficiary who signs gives up later claims; one who will not sign can be cited in a judicial accounting instead. What the release should say, and what to check before signing it.
How a Judicial Accounting Proceeds
- 1
The account is prepared
In the court’s schedule format, covering the period from the fiduciary’s appointment, or the last settled account, to the date of the accounting. Every asset, every receipt, every payment, with the supporting records organized to match.
- 2
The petition is filed
The fiduciary petitions for judicial settlement, asking the court to approve the account, fix commissions and attorney’s fees, confirm the proposed distribution, and discharge the fiduciary. Where the heirs are uncertain, kinship is decided in the same proceeding.
- 3
Everyone is cited
Beneficiaries, unpaid creditors, the Attorney General when a charity is involved, and the Public Administrator or a guardian ad litem for unknown or disabled parties. The citation sets a return date. Objections are due by then.
- 4
Objections and discovery
Objections must be specific: which entries, on what grounds, for what relief. The parties then exchange records and take depositions of the fiduciary, accountants, brokers and appraisers. Long administrations produce voluminous records and the analysis takes time.
- 5
Settlement or hearing
Most objections settle once the records are on the table, often at a conference before the court attorney. Those that do not are tried before the Surrogate, who rules on each objection and fixes any surcharge.
- 6
Decree
The decree settles the account, directs the distribution, and discharges the fiduciary. It binds everyone who was cited, which is why fiduciaries with difficult beneficiaries seek one, and why beneficiaries must object in time or be bound.
The Schedules in a New York Accounting
Every Surrogate’s Court accounting uses the same schedules. Together they reconcile from what the fiduciary received to what remains, and each is where a particular kind of objection lives.
| Schedule | What it shows | What gets questioned |
|---|---|---|
| A | Principal received: the assets at the start and anything received later | Assets left off, or valued too low |
| A-1, A-2, B | Sales and realizations, with gains and losses against the opening values | Below-market sales, sales to insiders |
| C, C-1 | Funeral and administration expenses, paid and unpaid | Personal expenses charged to the estate, excessive fees |
| C-2 and I | Commissions taken and how they were computed | Commissions on assets not received, or taken early |
| D | Creditors’ claims paid | Claims paid without proof, or to relatives |
| E | Distributions already made | Unequal or premature distributions |
| F | New investments and exchanges | Imprudent investments, or none at all |
| G | Principal remaining on hand | Whether it reconciles |
| H | Interested parties and their shares | Who was left out |
| J | Other pertinent facts and the cash reconciliation | Unexplained transactions |
Trust accountings add parallel income schedules, because trust beneficiaries often have different rights to income and to principal. See how to prepare a New York estate accounting.
When an Accounting Is Needed, and Which Kind
Usually, none is filed
When the beneficiaries trust the fiduciary and the numbers make sense, the estate is distributed against receipts and releases, often with a simple summary of receipts and disbursements rather than formal schedules. The releases close the estate as to everyone who signs. A fiduciary should still keep the records that would support a full accounting, because the right to demand one does not expire with the distribution.
When a beneficiary demands one
Any beneficiary can ask, and a fiduciary who is asked must account. Seven months after letters issue, the beneficiary can have the court compel it. At that point the informal accounting, in the court’s format with the backup, is usually the fastest way to answer and to close.
When the fiduciary wants a discharge
A judicial accounting ends in a decree that binds everyone cited and discharges the fiduciary. Fiduciaries choose it after a difficult administration, when a beneficiary will not sign a release, or when they want the protection of the court’s approval of a sale, a commission or a fee.
When the court requires it
A minor or disabled beneficiary, unknown or missing heirs, a charitable beneficiary, or the Public Administrator as fiduciary means the account must be settled judicially, because there is no one who can sign a release on that beneficiary’s behalf.
Trusts
A trustee, too, accounts when a beneficiary asks or the trust ends, and the duty covers the whole term of the trust however long it has run. Some trusts require periodic accountings by their terms. See whether a trust accounting is required.
Guardianships
Guardians are the exception: Article 81 guardians and guardians of a minor’s property must file annual reports and a final account with the court, reviewed by a court examiner, whether or not anyone asks. See guardianship.
Why Clients Choose Us for Accountings
We prepare them ourselves
Many estate lawyers send accountings out to be prepared and cannot explain the schedules. We build them in-house, in the court’s format, so that an informal account can be filed judicially without being redone.
We know where the problems hide
Having objected to many accountings, we know which schedules to test first and what records to demand. Having defended many, we know what a clean account needs behind it before it goes out.
Fees that fit the estate
An uncontested accounting is done for a flat fee. Objections and contested proceedings are billed hourly at $600, and where the estate is large enough we take objectants’ cases on contingency.
The courts of the region
Manhattan, Brooklyn, Queens, the Bronx, Staten Island, Nassau, Suffolk and Westchester, before the Surrogates and court attorneys who review these accounts every day.
Questions People Ask Us
Do I have to give the beneficiaries an accounting?
Not unless a beneficiary asks or the court requires it. Most estates are closed on receipts and releases without one. Once a beneficiary asks, you must account, and after seven months the court will compel it. What you can then control is whether it is informal, closed by releases, or judicial, closed by decree. See does an executor have to show an accounting.
The executor sent me a release to sign. Should I?
Not until you have seen the accounting and the records behind it. The release ends your right to object. You are entitled to the account, the bank and brokerage statements, the closing statement on any sale, and the invoices for the expenses, before you decide. See can a beneficiary see the bank statements.
What can I object to?
Anything in the schedules: an asset that is missing or undervalued, a sale below market or to an insider, an expense that was personal, a commission computed wrong, an investment that was imprudent, a distribution that was unequal, or delay that cost the estate money. Objections have to be specific and filed by the return date.
How is a surcharge calculated?
By the loss to the estate: what a prudent sale or investment would have produced against what this one did, interest on money held too long, the expense that should not have been paid. Commissions can be reduced or denied, and in cases of bad faith the fiduciary can be charged with the cost of the proceeding. See fiduciary surcharge.
How long does a judicial accounting take?
Uncontested, six months to a year from filing to decree, depending on the court. With objections, a year to two, most of it in discovery. Settlement is possible at any point, and most contested accountings do settle.
The trust has been running for twenty years and no one has accounted. Is it too late?
No. A trustee’s duty to account continues until the trust is settled, and a beneficiary can compel an accounting for the whole period. Reconstructing twenty years of records is a project, but it is done regularly. See when a trustee refuses to account.
Read More
How to Prepare a New York Estate Accounting
The schedules, the backup and the reconciliation, step by step.
Judicial Accounting in New York
The court proceeding from petition to decree.
The Prudent Investor Act
The standard that governs how a fiduciary invests, and how investment objections are decided.
A Beneficiary’s Right to Information
What you can ask for before the accounting, and how to get it.
Kinship at the Accounting
How heirs are proved when the estate is distributed by intestacy and the family tree is in doubt.
What Can Be Paid From an Estate Account
The expenses that belong on Schedule C and the ones that do not.
Talk to Us About the Accounting
Call 212-233-1233 or email [email protected]. If you have an accounting, a release, or a citation in hand, send it along. We will tell you what it means, what the deadlines are, and what it would take to prepare, settle or contest it.
