An informal accounting is an accounting delivered to the beneficiaries instead of being filed with the court. The executor, administrator or trustee prepares the account, sends it to each beneficiary with the records behind it, and asks each of them to sign a receipt and release. If everyone signs, the fiduciary distributes what remains and the estate or trust is closed without a court proceeding. Most New York estates that account at all account this way.
The release is what gives the informal accounting its force. It is a contract. A beneficiary who signs gives up the right to object later to anything the account disclosed. A fiduciary who obtains releases from everyone has most of the protection a court decree would give, without the cost or the delay. That bargain is fair only if the beneficiary was shown enough to know what they were releasing, which is why this page covers both what a fiduciary should deliver and what a beneficiary should check before signing. It is part of our section on trust and estate accountings. Call 212-233-1233 or email [email protected].
When an Informal Accounting Is Enough
A fiduciary is not required to account on their own initiative. An accounting is called for when a beneficiary asks, when the fiduciary wants a formal discharge, or when the court requires it. The informal route works when the beneficiaries are adults, competent, reachable, and willing to sign once they have seen the figures. It does not work when someone cannot sign or will not.
Enough
All beneficiaries are competent adults who can be found. The administration was ordinary: assets collected, debts paid, a house sold at a market price, commissions computed correctly. The beneficiaries may have questions, but they are questions the records answer.
Not enough
A beneficiary is a minor, under a disability, unknown or missing, or a charity, or the Public Administrator serves. No one can sign a release on that beneficiary’s behalf, so the account must be settled judicially. See judicial accountings.
Not enough after all
A beneficiary reviews the account and refuses to sign, or does not respond. The fiduciary may negotiate, amend the account, or file it. A beneficiary who will not sign cannot be forced to; they can only be cited in a judicial proceeding, where their objections are decided by the court.
The informal accounting is also the usual answer to a demand. When a beneficiary asks to see the figures, and especially once a petition to compel an accounting under SCPA 2205 is possible seven months after letters, delivering an informal account in the court’s format with the backup is the fastest way to satisfy the demand and, if it is not satisfied, the account is ready to file. See whether an executor has to show an accounting.
What to Deliver
An informal accounting need not use the court’s schedules, but it should. A summary of receipts and disbursements on two pages invites the question “what is behind this?”; the SCPA 2208 schedules answer it, and they can be filed without being redone if the informal route fails. The package a beneficiary should receive is set out below.
| Item | What it should contain |
|---|---|
| The account | in the schedule format described on our page on preparing a New York estate accounting: principal received at date-of-death values, gains and losses on sales, income, funeral and administration expenses, claims paid, distributions made, commissions computed, assets on hand, and the proposed distribution. |
| The records | bank and brokerage statements for the period, the closing statement on any real estate sale, invoices for the significant expenses, the estate’s tax returns, and the appraisal that supports any valuation. Either send them with the account or make them available on request, and say so in the cover letter. |
| The commission computation | under SCPA 2307 for executors and administrators or SCPA 2309 for trustees, shown in full. |
| The attorney’s fees | with enough detail to show what was done. Fees paid from an estate are subject to review under SCPA 2110, and a beneficiary is entitled to ask. |
| The receipt, release and waiver | for signature, and a plain statement of what the beneficiary will receive on signing. |
A beneficiary is entitled to the records before signing, and an account that cannot be verified should not be approved. See whether a beneficiary can see the bank statements.
Receipts, Releases and Waivers
The closing document goes by several names and usually does three things.
- 1
Receipt
The beneficiary acknowledges the distribution they have received or will receive on signing: the amount, or the specific property, and that it is in full satisfaction of their interest.
- 2
Release
The beneficiary releases the fiduciary from any claim arising out of the administration for the period covered by the account: the investments, the sale, the expenses, the commissions, the fees. Most releases also contain a refunding agreement, under which the beneficiary agrees to return a proportionate share of the distribution if a debt or tax later surfaces that the estate cannot pay.
- 3
Waiver
The beneficiary waives a formal accounting and the issuance and service of a citation, and consents to a decree if the fiduciary later files. The waiver means the beneficiary cannot later insist on a judicial accounting for the same period.
The release is signed before a notary. The fiduciary keeps the originals; they are not filed unless a judicial proceeding follows, in which case they are submitted with the petition so that the signers need not be cited. A fiduciary should not distribute a beneficiary’s share before receiving that beneficiary’s release, but a fiduciary may not withhold what a beneficiary is already entitled to, such as a specific bequest that has long been payable, as leverage for a release broader than is customary.
What a Beneficiary Should Check Before Signing
Once signed, the release ends the beneficiary’s right to object to anything the account disclosed. The time to ask questions is before, working through the account point by point.
| Check | What to look for |
|---|---|
| The starting assets | Does Schedule A list everything you know the decedent owned? Compare it with the inventory filed with the court and, if you have it, the estate tax return. A missing account or collection is the first thing to ask about. |
| Values | Was the house appraised, and by whom? Was it sold at or near the appraisal? Was the buyer a relative of the fiduciary? |
| Expenses | Is each significant expense supported by an invoice? Are there reimbursements to the fiduciary, cash withdrawals, or payments to family members without explanation? |
| Commissions | Is the computation shown? Is it on the amounts the fiduciary actually received and paid, and not on specifically devised real property, joint accounts or life insurance? If there are two fiduciaries, does the estate’s size support two commissions? |
| Attorney’s fees | Do they bear a reasonable relation to the work? A fee that is a round percentage of the estate deserves a question. |
| Distributions | Have other beneficiaries received advances that you have not? Does the proposed distribution match the will? |
| Delay | If the estate has been open for years, why? Did cash sit uninvested, or a house sit unsold, at the estate’s expense? |
| The release itself | Does it release only the period and matters the account covers, or everything? Does the refunding agreement cap your exposure at what you received? |
A fiduciary with a clean account answers these questions readily. Silence or pressure to sign quickly is itself information.
The Fiduciary’s Protection and Its Limits
A release bars the signer’s later objections to what the account disclosed. It does not bar a claim based on fraud, and it does not protect a fiduciary who withheld material information. A release obtained by presenting a two-line summary, or by omitting a sale to the fiduciary’s spouse, or by misstating what an asset sold for, can be set aside, and the beneficiary who signed it can then object as if they never had. The court looks at what the beneficiary was shown. A fiduciary who wants the release to hold should therefore disclose more rather than less: the full schedules, the records, and a plain explanation of anything unusual. The protection is only as broad as the disclosure.
Two further limits. A release binds only the person who signed it; a beneficiary who did not sign, and anyone who could not, is unaffected. And a release covers only the period and the matters the account addressed. A trustee who obtains releases on an intermediate account is protected for that period, not for what comes after. See what happens if a beneficiary refuses to sign a release.
When to Switch to a Judicial Accounting
The fiduciary switches when the informal route has stopped working: a beneficiary refuses to sign after seeing the records, a beneficiary cannot be found or cannot sign, or the beneficiaries’ questions have become objections that only a court can resolve. The account already prepared is filed with a petition under SCPA 2206, the non-signing parties are cited, and the court settles the account by decree. The releases already obtained are filed with it, so the signers need not be cited and the proceeding is narrowed to the parties who remain.
The beneficiary switches when the account cannot be trusted or is not forthcoming. A beneficiary who has asked and received nothing, or received a summary without records, can petition to compel an accounting under SCPA 2205 once seven months have passed from letters. A beneficiary who has received a full account and disagrees with it need not petition; they simply decline to sign and file objections when cited. See compelling an accounting and objecting to an accounting.
Informal and Judicial Accountings Compared
| Question | Informal accounting | Judicial accounting |
|---|---|---|
| Filed with the court? | No | Yes, with a petition under SCPA 2206 |
| How it closes | Receipts and releases from every beneficiary | A decree after citation and any objections |
| Who is bound | Only those who sign | Everyone cited, including those who default |
| Minors, charities, missing heirs | Cannot be used | Guardian ad litem, Attorney General or Public Administrator appears for them |
| Time | Weeks to a few months | Several months uncontested; a year or more contested |
| Cost | Preparing the account and the releases | Filing fee, guardian ad litem, and the cost of defending objections |
| Can it be reopened? | Yes, for fraud or withheld information | Rarely: fraud, newly discovered evidence, or a party not cited |
Pitfalls
On the fiduciary’s side, the informal route fails for predictable reasons. Beneficiaries who are handed totals without schedules or records tend not to sign, and if they do, the release is vulnerable. A fiduciary who pays a beneficiary in full before the release is signed has given up the only leverage they properly had. A fiduciary who distributes before the seven months creditors have to present claims under EPTL 11-1.5 does so at their own risk, refunding agreement or not. And commissions taken along the way, without the beneficiaries’ consent or the court’s approval, and disclosed only at the end, draw an objection to an account that was otherwise going to be signed.
On the beneficiary’s side, the mistakes are signing under pressure and signing too much. A beneficiary told that questions will delay everyone’s inheritance should take that as a reason to ask the questions. And a release of “all claims of any kind” against a fiduciary who is also a sibling may reach matters that have nothing to do with the estate; the release should cover the period and the matters the account covers, and no more.
Fees
We prepare informal accountings for a flat fee, quoted after we see the size of the estate and the state of the records. The fee covers the schedules, the reconciliation, the commission computation, the receipts and releases, and the correspondence with the beneficiaries. If the account has to be filed, it is already in the court’s format and the additional cost is the proceeding, not a second accounting. We review an informal accounting and its release for a beneficiary for a flat fee as well; contested matters are billed at $600 per hour, or on contingency in large estates where the objections are strong.
If you are a fiduciary who has been asked to account, or a beneficiary holding an accounting and a release you have been asked to sign, call 212-233-1233 or email [email protected]. We handle accountings in the Surrogate’s Courts of New York, Kings, Queens, Bronx, Richmond, Nassau, Suffolk and Westchester counties.
