We are attorneys who compel trustees and executors to account and represent beneficiaries in contesting accountings. This happens when beneficiaries believe that the executors or trustees are omitting assets from the accounting or are inflating expenses.
The fiduciary’s lawyer first presents an informal account to the beneficiaries or heirs. When there are no issues with the accounting, the beneficiaries or heirs sign a receipt and release agreement in exchange for receiving their distribution.
However, there are times when these beneficiaries or heirs have issues or objections with the accounting. In this case, an accounting lawyer for the beneficiaries can contest an accounting by sending the objections to the fiduciary’s lawyer.
The most common objections relate to:
When there are objections, the beneficiaries’ lawyer sends the reasons for the objection to the fiduciary’s lawyer. This begins the procedure for settlement negotiations, where the parties hopefully ultimately agree on how the estate should be distributed.
It is more beneficial for the beneficiaries and fiduciary to agree on an informal account than to go through the more expensive process of filing a formal account with the court. Filing a formal account with the court will cost legal and court fees, which will be taken from the estate. These additional costs will reduce the beneficiaries’ distribution. For this reason, if the objective is to maximize the beneficiaries’ distribution, entering into a settlement may be more cost-effective than compelling the accounting, depending on the amount of net estate involved.
When the parties cannot arrive at a settlement to the objections, the beneficiaries might have no other option but to file a petition to compel the fiduciary to account with the court for the account’s approval.
Here, a citation is issued to the fiduciary to submit to the court an accounting that is in accordance with the court’s accounting standards. It involves a detailed presentation of schedules, accounting for all money flowing in and out of the estate account. This includes the itemized accounts for the principal received, income, funeral and administrative expense, unpaid claims, unpaid administrative expenses, distributions, new investments, or executor, administrator or trustee commissions.
Most informal accounts we have seen do not observe the accounting schedules mandated by the court. For this reason, preparing this accounting schedule can take time, which could lead the fiduciary to accept a settlement rather than go through a more rigorous process of having the account approved by the court.
Once the fiduciary submits an accounting to the court, the beneficiaries can submit to the court their written objections to the account.
This court procedure takes time and expenses in terms of legal and court fees, which are taken from the estate. This additional cost reduces the beneficiaries’ shares in the distribution of the estate. For this reason, even if a petition to compel an accounting is filed, the fiduciary, especially when also a beneficiary, will attempt to arrive at a settlement to maximize the distributions.
Contesting and compelling an accounting can be a complex matter, requiring the expertise of an accounting lawyer. An experienced accounting lawyer can successfully raise objections and efficiently represent the beneficiaries’ interests to arrive at the best possible settlement for the client. Should you need legal representation, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York City, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].