Whether you are a beneficiary or an executor of an estate, you may be wondering does an executor have to show accounting to beneficiaries. An executor of an estate does not have an automatic obligation to file an accounting of the estate. But once the beneficiaries request an accounting, the executor has to provide one.
You can ask for an informal accounting first
If a beneficiary and the executor agree to an informal accounting, it might work, as long as the beneficiary is satisfied, they have all the information. When an executor files an informal accounting, they don’t have to file it with the court. They can just provide it to the beneficiaries. An executor may ask a beneficiary to approve an informal accounting before the executor makes distributions of estate funds.
If not satisfied, demand that an executor show a formal accounting
If the beneficiary is not satisfied with an informal accounting, they can ask for a formal accounting. If the executor fails to provide one, the beneficiaries can compel the executor to provide one. If the executor is ordered by the court to provide an accounting, they usually do or get removed by the court. Sometimes they provide an incomplete or fraudulent accounting. Beneficiaries can sue to challenge those accountings and get the money that the executor may be keeping from the beneficiaries.
Requirements of a valid estate accounting
An estate accounting is a document that details every transaction that occurred in the estate and provides some summaries and explanations of the transactions. The document consists of various schedules in a court-approved format and complying with general accounting standards. At a minimum, the estate accounting includes schedules listing line by line all of the assets that are a part of the estate, all of the expenses of the estate, all income of the estate, and proposed distributions of the estate.
The accounting is a set of schedules where an executor has to show all possible information about the estate, such as
- an itemized list of the assets that are in the estate
- the funds or property received by the estate
- the expenses of the estate
- the beneficiary distributions already disbursed and
- the beneficiary distributions yet to be disbursed
Beneficiaries and their estate attorney can review the schedules and decide that they are satisfied with the information. Or the beneficiaries can compel the executor to show all of the documents associated with the estate as well as the executor’s personal documents. Beneficiaries are entitled to have the executor show documentation such as
- account statements
- closing statements
- copies of checks
- tax returns
- loan applications
Accounting vs. Inventory of the estate
Beneficiaries have the right to have the executor show an inventory of the estate (not to be confused with a formal accounting) within nine months of the appointment of the executor of the estate. An Inventory is something that should just be filed – the beneficiary should not have to ask for it. Some executors make a mistake of just filing the Inventory with the Court and not automatically sending a copy to the beneficiaries. It’s always a good idea to ask the executor for an inventory before deciding whether or not to proceed to the next step.
To sum up, does an executor have to show an accounting to beneficiaries? Yes, if they ask for it.
If you are looking for a New York estate attorney who has experience with executor accountings in New York estate, we at the Law Offices of Albert Goodwin are here for you. You can call us at 718-509-9774 or email at firstname.lastname@example.org.