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Tuesday, October 2, 2012

I disagree with the executor's accounting - now what?


I hear a lot of questions from both executors and beneficiaries about the process of reviewing an executor's accounts and signing a Release. I recently received the following letter from a reader, which echoes what many others of you have asked:
"Can you tell me what happens if all heirs do not agree with the statement of accounts? Who looks at that and would the person(s) be contacted regarding why they do not agree with a statment of accounts? I disagreed with the stmt of accounts over a year ago and nothing has happened with the will since. The executor is not co-operative."

The beneficiaries of an estate are given the statement of accounts along with a Release. If all looks fine with the accounts, the beneficiaries sign the Releases and return them to the executor. Once all Releases have been received, the executor pays out the distribution that was outlined in the statement of accounts. The purpose of all of this is to get the beneficiaries to state that they approve of what the executor has done with the estate so far. This indemnifies the executor.

You asked who looks at the fact that a beneficiary doesn't agree with the accounting. This would be the executor. If the executor is using a lawyer to help with the estate, no doubt the executor would consult with the lawyer as to what to do next.

If the executor is trying to do the estate without the help of a lawyer and prepared the accounts without help from a lawyer or accountant, he or she may have no idea what to do now that a beneficiary has disagreed with the accounting. The next logical step from a legal point of view is for the executor to apply to the court to have the accounts passed by the court, but I would hope that before spending the time and money to do that, the executor would try to find out what the problem is, and rectify it.

Beneficiaries have the right to ask for more information on an accounting if something is unclear, or to ask about items that appear to have been omitted. And if the whole thing just seems out of whack, the beneficiary has the right to refuse to sign the Release.

Unfortunately, our system is based on the premise that an executor will want to take care of the estate properly and will make every effort to move the estate along as best he can. As it happens, plenty of executors don't really care if the estate drags on for years, as they aren't the ones waiting for an inheritance. Therefore, even if the executor is aware of the next steps, he or she may not wish to proceed without prodding.

You need to write a letter. If the accounting was sent to you by a lawyer, write to the lawyer, otherwise write directly to the executor. State your objections to the accounting, giving facts or figures if at all possible. Saying something like "I just don't like what you did"  or "I think you're hiding something" isn't useful and won't bring anything to a conclusion. You should be able to specifically refer to an item or a figure, and state, for example, "Mom's house was listed for $450,000 but the accounting only shows $325,000 going into the bank. What happened to the rest?"

Your responsibility to the procedure is to police the executor's actions, but keep in mind that the executor is human and can make mistakes. Give him or her the chance to explain the numbers in the accounting. Realize that most of us have never provided an accounting for anything in our lives and perhaps aren't that good at it, so your detailed questions should allow the executor to understand what is required. Don't nit-pick for the sake of nit-picking, and try to stick to real issues.

Refer to the fact that the accounting was provided a year ago, and that you want the matter cleared up.

If you receive satisfactory answers to your questions, you should sign the Release and return it to the executor. As you've said that the executor isn't co-operative, I don't expect this to happen, but perhaps after a year he or she is more motivated to wrap it up. Don't sit and wait any longer; there is a common law concept of the executor's year that says an estate without legal complications should be wrapped up in a year, and obviously the executor has exceeded that.

If the executor simply won't move on it, you will likely have to hire a lawyer to help you resolve it or push it through court. Perhaps the other beneficiaries would pool their resources with you since everyone would stand to benefit.


9 comments:

  1. Hi Lynne, Can someone request to see the accountings of an estate if they are not a beneficiary of the estate? As per the will my Mom is the sole beneficiary of her dad's estate and her sister wants documents of the accounting. My mom didn't go through a lawyer since there was no property, no debt and only $170 in his bank account. There were 2 insurance policies one for only her and one with both their names (they both know about the policy with both their names). Also the death occurred over a year ago and was not probated (because of the small assets) was it wrong not to probate it?

    Thanks so much for your help!

    ReplyDelete
    Replies
    1. No. Only beneficiaries are entitled to see the accounting.

      Lynne

      Delete
  2. What if th lawyer has sent 100 pages of accounting for us to review and wants an indemnity and release document signed immediately so that an interim disbursement of funds can be made. Can I say that I need time to go over every document and that I won't sign now. I would agree that they can give everyone some money now, but I won't indemnify the Executors that it's all right because with that many pages it will take time to go over everything. Can I hold this up?

    ReplyDelete
    Replies
    1. There is nothing wrong with asking for enough time to digest 100 pages of information. But it should be a reasonable time. It's important information, so take your time, but don't delay it beyond what is necessary.

      Lynne

      Delete
  3. My father died 22 years ago. The executrix was/is his ex-wife. She just sent us the accounting recently after 22 years! We wrote down and sent our objections many months ago and received no response. Now what?? 22 years!!!

    ReplyDelete
    Replies
    1. Normally when beneficiaries object to an executor's accounting or lack of response from an executor, I would suggest that they enforce their rights through the courts. However, this 22-year gap is going against you just as much as it's going against the executor. The fact that none of you did anything for 22 years to force an accounting may amount to what the court calls "beneficiary acquiescence". In other words, you allowed this delay to go on well past the time that any ordinary beneficiary would. So, if you don't get satisfactory answers from her, you obviously have recourse to the courts to ask her to pass her accounts. However, if there are problems with the accounting, you may not get a lot of sympathy from the court.

      Lynne

      Delete
  4. money as been given to family that was not named in the will, a insurance policy as been cashed, we have tryed through a lawyer to get statement of accounts and see what happened to all of moms stuff/furniture etc but only garbage replys come back to the lawyer we have copy of the will and people that were paid out were not mentioned in the will ? please advise

    ReplyDelete
    Replies
    1. It sounds as if you've got one of those executors who thinks they have the right to do whatever the hell they want, no matter what the will says.

      If you cannot get co-operation and answers from the executor, your recourse is to get your lawyer to get it into court for a passing of accounts.

      If it turns out that the executor is paying people that he or she should not be paying, part of your request might be that the executor be removed, and that any amounts that have been improperly paid out be reimbursed by the executor personally.

      Lynne

      Delete
  5. The lawyer failed to protct the estate and 293k was awarded against the estate direct result of lawyer executer and realestate agent ther is likely fraud involved .The lawyer acted as agent on one occassion and took a deposit from one of the benificiaries promised to give accounting there was agreed price but the lawyer stated the value was rising so he relisted the property failing to provide language that was previosly written before probate had passed and lost our family home and caused substantial damages The most recent sale he sold the home for less than 100k under market value had account s passed and now wants me to sign a release when there is pending litigation against the lawyer is this legal for him to force a release while ther is pending litigation?

    Regards
    Anonymous

    ReplyDelete

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