Does an Executor Have to Show an Accounting to Beneficiaries in New York City

Not on their own initiative. A New York executor is not required to prepare an accounting simply because the estate is being administered or because it is being closed. Most estates are distributed against receipts and releases with, at most, a summary of what came in and what went out. An executor has to account in three situations: when a beneficiary or another interested person asks for one; when the executor wants a court decree discharging them from liability; and when the court requires it because someone with an interest cannot sign a release, such as a minor, a person under disability, an unknown or missing heir, or a charity. Once a beneficiary asks, the executor must account, and seven months after letters issued the beneficiary can have the Surrogate’s Court compel it.

Everything on this page applies equally to an administrator. An administrator is appointed when there is no will, or when the will names no executor who can serve, and holds letters of administration instead of letters testamentary. The duty to keep records, the duty to account when asked, the seven-month rule, the petition to compel and the consequences of refusing are the same for both. The Public Administrator, who serves when no relative is available, is treated the same way, with one difference explained below. This page is part of our trust and estate accounting section.

What a Beneficiary Is Entitled To Before Any Accounting

An accounting is the last and largest thing a beneficiary can ask for. Well before that, a beneficiary is entitled to know the basics, and an executor who provides them usually never gets asked for more.

• The will. Once the will is filed for probate it is a public court record. Any beneficiary can get a copy from the executor’s lawyer or from the Surrogate’s Court. Read it to see what kind of beneficiary you are: a specific legatee who is left a particular item or sum, or a residuary beneficiary who takes a share of what remains after everything else is paid.
• The inventory. The court’s rules require the executor or administrator to file a short inventory of the estate’s assets within six months of letters. It is a list with values, not a record of transactions, and it is filed whether or not anyone asks. Some fiduciaries file it and forget to send it to the beneficiaries; ask for a copy.
• The status of administration and the values. What has been collected and sold, the date-of-death values and appraisals, the sale price of the house, whether the estate tax return has been filed, and roughly when a distribution can be expected. None of this requires schedules; a letter answers it.

What a beneficiary is not entitled to is a running commentary. An executor need not clear each bill with the beneficiaries or consult them before selling the apartment. The beneficiary’s protection is the accounting, where every one of those decisions can be examined. See what information a beneficiary is entitled to.

How to Ask for an Accounting

Ask in writing. A letter or email to the executor, or to the executor’s lawyer, that says you are a beneficiary and that you request an accounting of the estate is enough. It need not cite a statute or threaten anything. If you are not on speaking terms with the executor, that is what the executor’s lawyer is for. Keep a copy, because the written request and the date it was sent are what a court will look at if the request is ignored.

A request from a lawyer carries more weight, because it tells the executor that the next step, if nothing happens, is a petition. Most are answered.

The Seven Months

Creditors have seven months from the issuance of letters to present claims, and an executor who distributes before then does so at their own risk. That is why beneficiaries are usually not paid, and rarely given an accounting, in the first seven months. The executor may be marshaling assets, waiting for the estate tax closing letter, or waiting to see what claims come in. None of that is a refusal to account.

The seven months are also the point at which the law expects an executor to be able to answer. A petition to compel an accounting under SCPA § 2205 is ordinarily entertained once seven months have passed since letters issued. Before then, the court will generally want a reason: assets being dissipated, a fiduciary who has vanished, or a sale that looks wrong. After then, a beneficiary who has asked and been ignored can file, and the court will order the account. See SCPA 2205.

Litigation lengthens the wait: a will contest, a kinship dispute or a lawsuit the decedent was party to can add a year or more. It does not suspend the duty to account. The court can order an intermediate account under SCPA § 2210 for the period to date.

Informal or Judicial

When an executor accounts, it takes one of two forms.

An informal accounting is delivered to the beneficiaries with the records behind it: the bank and brokerage statements, the closing statement on any real estate, the invoices for the expenses, the commission computation. If the beneficiaries are satisfied, they sign receipts and releases, often with a waiver of a formal accounting, and the executor distributes. The release is a contract. It bars the signer’s later objections except for fraud or where the executor withheld something material. Nothing is filed with the court. See informal accountings.

A judicial accounting is filed in Surrogate’s Court in the court’s schedule format under SCPA § 2208. Everyone with an interest is cited, objections may be filed by the return date under SCPA § 2209, the fiduciary can be examined under oath under SCPA § 2211, and a decree settles the account and binds everyone who was cited. It costs more and takes longer, and it is what a beneficiary gets when the executor is compelled to account, and what an executor chooses when a beneficiary will not sign a release or the executor wants the finality of a decree. See judicial accountings.

An informal accounting prepared in the court’s format can be filed judicially without being redone if a beneficiary refuses to sign.

What Happens When the Executor Does Not Answer

If the written request goes nowhere and seven months have passed, the beneficiary petitions the Surrogate’s Court under SCPA § 2205 to compel the account. The court issues a citation; on the return date, unless the executor shows a good reason, the court orders the executor to file the account and a petition for its judicial settlement within a set time, commonly thirty to sixty days. An executor who ignores that order can be held in contempt and can be removed under SCPA § 711 for failing to account when ordered. What arrives is then a judicial accounting, with the right to examine the executor and object. The escalation is described in what to do when an executor refuses to account and compelling an accounting.

Compelling an accounting is not the same as compelling a distribution. A beneficiary who has waited well past seven months for a legacy can also petition for payment, and a legacy not paid within seven months of letters generally carries interest.

Administrators, Intestate Estates and the Public Administrator

An administrator accounts to distributees rather than to beneficiaries under a will. Distributees are the relatives who take under the intestacy statute: the spouse and children first, then parents, siblings, and more remote relatives. Their rights are the same as a beneficiary’s: the inventory, reasonable information, and an accounting on demand, enforceable by petition after seven months. An administrator is usually one of the distributees, so these are family disputes: the brother who was appointed is the fiduciary who must account to his siblings.

Two features of intestate estates change the accounting in practice. Where the distributees are uncertain, because the decedent had no close relatives or the family tree crosses borders and generations, the heirs are proved in a kinship hearing held in the accounting proceeding, and the account cannot be settled until the court knows who takes. See kinship proceedings. And where any distributee is unknown, missing, a minor or under disability, the account must be settled judicially, because no one can sign a release on that person’s behalf.

The Public Administrator of the county serves when no eligible relative is available to be appointed. The Public Administrator’s accounts are always settled judicially, with the Attorney General and any known or unknown distributees cited, and a person claiming to be a distributee proves the relationship in that proceeding. A relative who believes the Public Administrator is holding an estate in which they have a share can also petition to compel the account.

What the Executor Should Do When Asked

Answer. An executor who is asked has a choice that disappears once a petition is filed: to account informally, on their own timetable and at a fraction of the cost, and to close the estate on releases.

1. Acknowledge the request in writing and give a realistic date. If the seven months have not run, say so and say when they will.
2. Assemble the records from the date of letters forward: every estate bank and brokerage statement, the closing statement on any sale, the appraisals, the invoices, the tax returns, and receipts for distributions already made. Include expenses paid from the executor’s own funds; unreimbursed expenses that are not listed are lost.
3. Prepare the account in the court’s schedule format even if it is going out informally. It is the format beneficiaries’ lawyers expect, it computes the commission under SCPA § 2307 correctly, and it can be filed if a beneficiary will not sign. See how to prepare a New York estate accounting.
4. Send it with the backup and a receipt and release for each beneficiary. Do not condition a distribution the beneficiary is already entitled to on anything beyond the customary release.
5. If a beneficiary objects, answer the specific question with the specific record. Most objections to an informal account are resolved by a document.

An executor who has commingled funds, paid personal expenses from the estate, or taken commissions early should understand that the accounting will show it, and that it is better to correct it before the account goes out than to have an objectant find it. Commissions can be reduced or denied for misconduct, and losses are surcharged against the executor personally. See surcharge.

Pitfalls

• For beneficiaries: signing a release before seeing the account. A release sent with a check and no accounting is a request to give up your right to object in exchange for what the executor has decided you get. Ask for the account and the records first. See receipts and releases.
• For beneficiaries: stopping at the order. Once the account is filed, objections are due by the return date. An account that is not objected to is settled as filed, and the decree binds you.
• For executors: treating silence as an option. Ignoring a request converts a flat-fee informal accounting into a court proceeding, and ignoring the court’s order converts that into a contempt and removal problem.
• For executors: distributing without records. The right to demand an accounting does not expire when the money goes out. An executor who distributed years ago on a handshake can still be compelled to account.

Talk to Us

If you are a beneficiary or distributee who has asked and not been answered, or an executor or administrator who has been asked and wants to answer properly, we can tell you what the next step is and what it will cost. We prepare uncontested accountings for a flat fee and handle compelled and contested accountings in the Surrogate’s Courts of New York City, Long Island and Westchester. Call 212-233-1233 or email [email protected].