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New York Estate Accounting

When you draft your will, you will name someone as your executor. Your executor's responsibilities begin once you pass away. At that point your will will be submitted to the New York Surrogate's Court to be probated and your estate administered. Administration is the process during which the executor will wind up your estate and eventually distribute your assets to the beneficiaries you designate. The probate process, which can be complicated and lengthy, is overseen by a Surrogate's Court judge. The executor must keep accurate records as to all of the activities that he or she completes on behalf of the estate, and must keep accurate records of all money coming into the estate and all money distributed from the estate. The Surrogate's Court judge will review the records and ensure that the executor handled the estate assets properly. If the judge finds that the executor mismanaged estate assets, then the consequences to the executor will be severe. In order to properly manage an estate, if you are an executor it is important you contact an experienced New York estate accounting lawyer who will help ensure that you properly fulfill your duties, including providing an accurate accounting.

Duties of the Executor

One of the first jobs of the executor is to take control over the decedent's assets. Estates assets may include real estate, vehicles, artwork, collectibles, stocks, bonds, bank accounts, furniture, and other personal property. Taking control means to locate them and assume management over the property. For example, if the asset is a home, the executor would have to get the keys to the house, possibly change the locks, and maintain homeowner’s insurance.

The executor must inventory your assets and have them appraised. The executor will then have an understanding of where the estates stands from the beginning and his or her records should reflect this. An accurate inventory and appraisal of estate assets is a necessary in order for the executor to understand what assets are available to pay estate debts and to distribute to beneficiaries.

Another major responsibility for the executor is to pay estate debts. This may involve paying every day bills such as the mortgage, insurance, utilities and credit card bills. It may also involve paying other legitimate estate debts such as the testator's funeral expenses and estate taxes. The executor must keep accurate records of each of these transactions including receipts. As an experienced New York estate accounting lawyer will explain, such records will be needed for the estate accounting.

In addition to paying debts, the estate may receive income. For example, if the estate includes rental property then the executor has a duty to collect rent. Similarly, if the estate has claims against others, then it is the executor's job to pursue those claims and secure payment. Just like money that is paid out of the estate, money that is paid into the estate must be accounted for by the executor.

Once debts are paid and claims are resolved, the executor will submit a final accounting to the court and request permission to close the estate and distribute its assets to the beneficiaries named in the will.

Estate accounting

The executor's accounting must be accurate, complete and supported by documentation. This means that there must be a receipt for each disbursement. Examples of disbursements include payment of expenses and fees related to management of the estate such as attorney's fees and taxes. Likewise, there must be receipts or supporting documentation for money received by the estate. Other important documentation that should be included with the accounting are bank and brokerage account statements that can verify balances, debits and credits. For more details about what transactions should be including in the accounting and the required documentation, contact a skilled New York estate accounting lawyer.

There are three general types of estate accountings: judicial, consent, and voluntary.

  • Judicial accounting. A judicial accounting occurs when the Surrogate’s Court issues an order directing an executor or administrator to file an estate accounting. This typically only happens when an executor fails to submit an accounting that was requested by a beneficiary. Under Surrogate's Court Procedure Act - SCP § 2205, not only may a beneficiary petition the court to compel the executor to account, a creditor, a public administrator or county treasurer, any person in behalf of an infant or child born after the making of the will when interested in the estate, the fiduciary of a deceased person interested, a surety on the bond of the fiduciary required to account, or successor executor. If an executor or other fiduciary fails to file an accounting as directed by a Surrogate’s Court judge, the fiduciary’s authority can be suspended. For example, in the Matter of Hortensia R. Allen Irrevocable Grantor Trust, one of the trustees failed to file an account with the Surrogate’s Court as directed by a court order. Because the trustee violated the court order as well as other questionable actions, the Surrogate’s Court decided to suspend the trustee’s appointment.
  • Decree upon the filing of instruments approving the accounting. The executor may voluntarily submit an accounting to the beneficiaries and ask that they sign a form approving the accounting. If the beneficiaries do sign off on the accounting, the executor can this submit the accounting, the approval form signed by the beneficiaries, and a petition with the Surrogate’s Court. The Surrogate’s Court can then issue a decree releasing the executor from further liability to the interested parties.
  • Voluntary accounting. An executor may file his account with the Surrogate’s Court. Such an accounting may be filed only after 7 months or the time period for creditors to file claims against the estate has expired, if the executor’s letters testamentary have been revoked, or if the executor’s account has not been judicially settled within 1 year preceding the application therefor and the application is entertained.
Contested accounting

The mere filing of a final accounting by an executor does not mean that it will be accepted by the court and that the court will release the executor. There are some instances in which there are objections to an accounting. However, the court will dismiss an objection if the objectant is not specific about what the additional information requested. In the 2017 case of Estate of Dutton that was decided by the Suffolk County Surrogate’s Court, multiple objections were made to the accounting filed by the fiduciary. The objectant demanded that the fiduciary produce a number of documents to support information in the accounting. However, the Court disallowed the document demands because the demands were either not relevant or over-broad. If you are involved in a matter related to a contested estate accounting, discuss the matter with an experienced estate accounting attorney in New York.

Contact the Law Offices of Stephen Bilkis & Associates

Because of the fiduciary relationship that an executor has with respect to the estate and the testator's beneficiaries, it is critical that the executor handle estate property with the utmost care. Accurate records are necessary to support that the executor fulfilled his or her duties properly. Whether you are an executor, estate administrator, beneficiary, or other interested party, if you have questions or concerns related to the accuracy of an estate accounting or you need assistance in preparing an estate accounting, contact an estate accounting attorney serving New York at the Law Offices of Stephen Bilkis & Associates. We have years of experience representing clients in complex estate matters before the New York Surrogate’s Court. We can help. Contact us at 1-800-NY-NY-LAW (1-800-696-9529) to schedule a free, no obligation consultation regarding your case. We represent clients in the following locations: Westchester County, Queens, Bronx, Nassau County, Staten Island, Suffolk County, Brooklyn, Long Island, and Manhattan.

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Mr. Bilkis handled both my father and mother's estate issues through very difficult times he was compassionate kind and understanding. In fact the whole firm showed great empathy. Despite the emotional hard time we were having that quickly and efficiently handle all the matters that were necessary to get us the result we desired. Can't recommend them enough. B.B.
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