Estate Accounting Attorneys
An estate accounting is the formal record of everything an executor, administrator, or trustee received, spent, sold, and distributed during the administration, and what remains on hand. It is how beneficiaries learn what happened to the estate or trust, and it is how the fiduciary obtains a release from liability and closes the administration. Every fiduciary will account at some point, either informally to the beneficiaries or formally to the court, and a clear, well-supported accounting helps beneficiaries review the administration and resolve questions.
We prepare accountings for executors and trustees, review and object to accountings on behalf of beneficiaries, and handle the court proceedings in which contested accountings are settled. Because our attorneys administer estates and trusts as well as litigate over them, we know what a complete accounting looks like and how to identify gaps in its supporting records.
Milvidskiy Law Group P.C. handles accountings in the New York Surrogate’s Court, the New Jersey Superior Court, and the Connecticut Probate Court, and informal accountings settled by agreement in all three states.
Key Takeaways:
- An accounting is not a summary. It is a set of schedules, supported by documents, showing the assets on hand at the start, every receipt and disbursement, every sale with its gain or loss, every distribution, the fiduciary’s commissions, and the proposed final distribution.
- An accounting can be settled informally, by the beneficiaries’ receipts and releases, or judicially, by a court decree after notice to everyone interested. Informal settlement is faster and cheaper; judicial settlement binds people who will not sign and is required in some circumstances.
- Objections must be specific and must be raised in the accounting proceeding. A beneficiary who does not object, or who signs a release, generally cannot challenge the transaction later.
What an Accounting Contains
- Opening inventory: the assets that came into the fiduciary’s hands, at their date-of-death or date-of-funding values.
- Receipts: income, sale proceeds, refunds, and any assets discovered after the inventory.
- Gains and losses on sales, showing each asset’s value when received and what it brought.
- Disbursements: debts, taxes, funeral and administration expenses, professional fees, and every other payment, each with its purpose.
- Distributions already made to beneficiaries, and any advances.
- Commissions claimed by the fiduciary, computed as the statute or instrument allows.
- Assets on hand and the proposed plan for distributing them.
- Supporting documents: statements, closing statements, tax returns, receipts, and vouchers that substantiate each entry.
A trust accounting adds the separation of principal and income, because different beneficiaries may be entitled to each, and covers the period since the last settled account.
Informal and Judicial Settlement
Informal settlement
Where every beneficiary is an adult with capacity and willing to sign, the fiduciary delivers the accounting with the supporting documents, answers questions, and obtains from each beneficiary a receipt for the distribution and a release of the fiduciary. In New York the releases are filed with the court to close the estate; in New Jersey the beneficiaries sign refunding bonds and releases that are filed with the Surrogate; in Connecticut a final account is presented to the Probate Court, which may proceed on the parties’ written waivers of a hearing. Informal settlement is the goal of most administrations. It is fast, private, and inexpensive, and a properly documented accounting with releases protects the fiduciary nearly as well as a decree. The accounting and releases are key steps in closing an estate.
Judicial settlement
A court proceeding is required where a beneficiary will not sign, where a beneficiary is a minor or lacks capacity, where the fiduciary wants the finality of a decree, or where the court’s rules require it. The fiduciary files the accounting with a petition, the court issues process to everyone interested, a guardian ad litem may be appointed for anyone who cannot act, and beneficiaries file objections. Objections are litigated through discovery and, if necessary, a hearing, after which the court settles the account by decree, allows or disallows commissions and fees, and directs the final distribution. The decree binds everyone who was served.
When an Accounting Is Due
The timing differs by state and by the type of fiduciary. In New York, an executor may account voluntarily once the estate is ready to close, and a person interested in the estate, a creditor, a co-fiduciary, or a surety may petition the Surrogate’s Court to compel an accounting at any time; the court may order an intermediate or final account, suspend a fiduciary who ignores the citation, and appoint a successor. In New Jersey, an executor or administrator may settle an account in the Superior Court or be required to, but ordinarily not until a year after appointment unless special cause is shown. In Connecticut, the Probate Court has jurisdiction over the accounts of executors, administrators, conservators, guardians, and testamentary trustees; conservators, guardians, and testamentary trustees must file accounts at least every three years unless the will excuses it, a final account is required in any event, and a beneficiary of a lifetime trust may petition for an accounting by the trustee. An accounting is also the first step in trustee replacement.
For Fiduciaries: Preparing an Accounting That Ends the Administration
Clear records make an accounting easier to prepare and review. Keep estate funds separate, retain statements and receipts, and record the purpose of each payment from the start of administration. We prepare formal accountings in the format each court requires, review the administration for issues a beneficiary is likely to raise, and address them before the accounting is served. Where problems occurred during administration, we help the fiduciary disclose them and propose a resolution. Consistent record-keeping throughout probate and estate administration and trust administration supports this review.
For Beneficiaries: Reviewing and Objecting to an Accounting
A beneficiary who receives an accounting has a limited time to object, and objections that are not raised are generally waived. We review the accounting against the will or trust and the supporting documents, looking for the issues that most often appear: assets missing from the inventory, sales below value or to insiders, payments that were not proper estate expenses, commissions computed on the wrong base, professional fees out of proportion to the work, income not collected, and distributions that do not follow the instrument. Where the documents do not support an entry, we demand them; where they reveal a loss, we file objections that identify the transaction, the breach, and the amount. Objections that are established result in a surcharge against the fiduciary, disallowance of commissions or fees, and, where warranted, removal. We pursue these remedies through fiduciary litigation.
Compelling an Accounting
A beneficiary who cannot get information has a remedy in each state: a petition to compel the fiduciary to account. The petition is straightforward, the fiduciary’s failure to respond has consequences that range from suspension to removal, and the accounting that follows is the vehicle for every other claim. Before filing, we send a written demand that gives the fiduciary a chance to respond, because a fiduciary who is merely disorganized often produces the information without a proceeding, and the estate is spared the cost.
What Our Estate Accounting Service Includes
- Preparation of formal and informal accountings for executors, administrators, and trustees, in the format each court requires.
- Review of the administration before the accounting is served, and resolution of issues that would draw objections.
- Receipts, releases, refunding bonds, and the filings that close an estate informally.
- Petitions for judicial settlement, service of process, and representation through the decree.
- Review of accountings on behalf of beneficiaries, demands for supporting documents, and preparation of objections.
- Petitions to compel an accounting, and defense of fiduciaries against them.
- Litigation of contested objections, including forensic accounting where warranted, and negotiation of settlements through our alternative dispute resolution practice.
- Professional executor services where the court or the family needs a neutral successor fiduciary.
When a Formal Accounting May Not Be Needed
Not every estate needs a court-settled accounting. A small estate with one or two adult beneficiaries who trust the fiduciary and have seen the statements can close on an informal accounting and releases. A trust that continues for decades may need only periodic informal reports unless the instrument or the court requires more. Where the beneficiaries are satisfied, insisting on a judicial settlement adds cost without adding protection. We recommend a court proceeding where a beneficiary will not sign, where a minor or incapacitated beneficiary is involved, where the administration had problems the fiduciary wants resolved by decree, or where the instrument or the court requires it.
Schedule a Consultation About an Estate Accounting
If you are a fiduciary ready to close an estate or trust, or a beneficiary who has received an accounting or cannot get one, bring the will or trust, the statements, and any correspondence. The time to object to an accounting is limited, and the time to address administration issues is before the accounting is served. Our attorneys practice in New York, New Jersey, and Connecticut. Contact Milvidskiy Law Group P.C. to schedule a consultation.
This page is provided for general informational purposes only and does not constitute legal advice. Laws differ by state and change over time. For advice about your situation, consult a qualified attorney.
Frequently Asked Questions
What is an estate accounting?
It is the formal record of everything an executor, administrator, or trustee received, spent, sold, and distributed during the administration, and what remains on hand, organized in schedules and supported by documents. Beneficiaries use it to learn what happened to the estate; the fiduciary uses it to obtain releases and close the administration.
Is an executor required to provide an accounting?
Yes, at the appropriate time. Every fiduciary must account, either informally to the beneficiaries or formally to the court. A beneficiary who cannot get one can petition the court to compel it. In New Jersey an executor ordinarily cannot be required to account until a year after appointment unless special cause is shown; in New York a petition to compel may be brought by a person interested in the estate, a creditor, a co-fiduciary, or a surety.
What is the difference between an informal and a judicial accounting?
An informal accounting is delivered to the beneficiaries, who sign receipts and releases if they are satisfied; no court proceeding is needed. A judicial accounting is filed with the court, served on everyone interested, and settled by decree after any objections are decided. Informal settlement is faster and cheaper; judicial settlement is required where a beneficiary will not sign, is a minor, or lacks capacity, or where the court’s rules require it.
How often must a trustee account?
It depends on the state and the instrument. In Connecticut, conservators, guardians, and testamentary trustees must file accounts with the Probate Court at least every three years unless the will excuses it, and a final account is required in any event. In New York and New Jersey the timing is governed by the instrument, the court, and the beneficiaries’ requests, and a trustee of a continuing trust typically provides periodic reports and a formal account at the end or when a trustee changes.
What should I look for when reviewing an accounting?
Assets missing from the inventory, sales below value or to insiders, payments that were not proper estate expenses, commissions computed on the wrong base, professional fees out of proportion to the work, income that was not collected, and distributions that do not follow the will or trust. Every entry should be supported by a statement, receipt, or closing document, and the absence of support is itself a reason to ask questions.
How do I object to an accounting?
By filing written objections in the accounting proceeding within the time the court sets, identifying each transaction challenged, the reason, and the amount. Objections are then litigated through discovery and, if necessary, a hearing. Objections not raised are generally waived, and a beneficiary who signs a release generally cannot later challenge the transactions it covers.
Can the fiduciary use estate funds to prepare the accounting?
Generally, yes. Preparing and settling an accounting is part of the administration, and reasonable attorney and accountant fees for it are ordinarily charged to the estate or trust. Fees incurred defending objections that are sustained may be treated differently, and the court reviews all fees in a judicial settlement.
What happens if the executor refuses to account?
A beneficiary petitions the court to compel an accounting. A fiduciary who ignores the court’s citation may be suspended, a successor may be appointed, and the matter may be set down for a hearing on removal. Refusal to account is also one of the statutory grounds for removal in each of our states.
Do I need a formal accounting for a small estate?
Often not. Where the beneficiaries are adults who trust the fiduciary and have seen the statements, an informal accounting with receipts and releases closes the estate at far lower cost. A court proceeding is recommended where a beneficiary will not sign, where a minor or incapacitated beneficiary is involved, or where the fiduciary wants a decree that resolves a problem in the administration.
What is a receipt and release?
A document a beneficiary signs acknowledging receipt of their distribution and releasing the fiduciary from further liability for the administration, usually after reviewing an informal accounting. In New Jersey the equivalent is a refunding bond and release filed with the Surrogate. Releases end the fiduciary’s exposure to the beneficiaries who sign them, which is why a beneficiary should review the accounting carefully before signing.
