When the executor of an estate has finished cashing in assets and paying bills, has filed the tax returns and is ready to pay the beneficiaries, he or she will send the residuary beneficiaries a set of financial statements. Along with the statements will be a Release. If the executor is doing things properly, no residuary beneficiaries get their money until all of them have signed and returned the Release to the executor.
So what is the legal effect of that Release? What is the beneficiary really doing by signing it?
The financial statements that come with the Release are intended to give a full, accurate picture of all of the financial transactions the executor has done on behalf of the estate. The beneficiary should be able to tell from the statements what happened with every asset of the estate (e.g. the deceased's home was sold for $x and the money was put into the executor's account). The statements should show what was spent on the funeral, legal fees, accounting fees and other expenses. The beneficiary is entitled to ask for more detail if he or she believes that to be necessary.
By signing the Release, the beneficiary is approving of the financial statements and all that they contain. Releases will often refer to a time period, usually beginning on the date of death and continuing up until the day the Release was sent to the beneficiary. In those cases, the beneficiary is approving of everything the executor did during that time period. Sometimes in more complicated estates there will be more than one set of financials, perhaps with the second set a year or so after the first, but in most estates there is only one.
By signing the Release, the beneficiary is saying that he or she is satisfied with everything the executor has done. He or she is agreeing in writing that everything is fine. The beneficiary can not later come back and find fault with the accounting, for example by saying that money is missing or that the house was sold for too little. The beneficiary is signing off on it and can't later change his or her mind.
This protects the executor from anyone coming back later and beginning a legal battle over something in the estate. Beneficiaries also benefit from it because the executor, who wants the Release to be signed, will usually provide a thorough accounting that answers all of the beneficiaries' questions.
A beneficiary does have the right to have the accounting looked at by an accountant or a lawyer before signing the Release, though most do not. Every case is different and the beneficiary should take his or her time to read the accounting thoroughly before signing the Release and returning it to the executor.