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Thursday, March 25, 2021

Can beneficiaries insist on seeing an accounting of the deceased for the time prior to death?

Today I want to answer a question posted on this blog recently by a reader. It's one of those questions that I have heard dozens of times, so I know it affects many of you. Here is the question followed by my comments:

"Can a Beneficiary ask to see bank statements of the deceased prior to their death? We have presented an account of informal accounting of the deceased but now they are asking for accounting records of the deceased prior to death."

The thing about this sort of question is that the answer is never a simple "yes" or "no". When answering this type of question, I like to start with what the law gives parties in terms of rights, and then talk about how it plays out in real life.

Beneficiaries who share in the residue of the estate are entitled to a full accounting of the executor's treatment of the estate. They are entitled to ask for supporting documents and to insist that the accounting is accurate and complete. If the beneficiaries do not find the accounting to be satisfactory (within reason, of course), they can raise objections during a passing of accounts so that a judge becomes aware of any shortcomings.

The question is: does an accounting include things that happened before the executor took control of the estate?

On the face of it, the answer is "no". An executor should not have to justify or explain transactions that happened before he or she was involved. 

But of course, it's not that easy, is it? An executor is responsible for obtaining a full accounting from anyone who acted under an Enduring Power of Attorney for the deceased. So in a roundabout way, the executor, while not responsible for the transactions, is responsible for finding out on behalf of the beneficiaries what those transactions were. This becomes part of the accounting. In addition, an executor is responsible for producing an accurate inventory of what is in the estate, so beneficiaries who do not believe that inventory is accurate are entitled to question it.

Whenever I am asked whether a beneficiary can demand to see transactions that happened before the deceased's passing, I know one of two situations has arisen (or possibly both). One is that the person who is the executor was also the POA and the beneficiaries suspect that not everything that the POA did has been accounted for. The second scenario is that the beneficiaries believe there should be significantly more assets in the estate than are shown by the executors.

When the executor in this question is my client, I will of course talk about rights and the law, but more importantly, I will want to talk about what the executor is going to do. I try to keep my clients out of court if possible and I want my client to take action that will protect himself, but still keep the estate out of court and on an even track. So I'll ask my client, as I would like to ask the reader who posed this question, if there is any reason why the pre-death records cannot be produced. Are the records not available? Will they cost money to obtain? Do they show something incriminating? Or is it all about not buckling under to beneficiaries because you don't like the insinuation that you've done something wrong?

If providing a bank statement can prevent a lawsuit, I will most likely recommend that the statement be produced. Can the beneficiary insist upon it? Probably not, if the executor was not the POA. Can the beneficiary cause delays and costs by asking the court to compel production of the statement? Yes.

It's really not unusual to see beneficiaries surprised or shocked that there is less in an estate than they had expected, as I mentioned above. They don't always take into account that a parent was paying for long-term care or that the house fetched less than expected when it was sold. Unfortunately, this very often results in the beneficiaries immediately becoming suspicious - even if there is no concrete reason for that - and the target is the executor because he is the one in control. So sometimes producing those bank records is the easiest way of showing that there is absolutely nothing wrong in the estate other than unrealistic expectations by the beneficiaries. 

I realize that this is more of a discussion than an outright answer but that's how it is with legal questions. There is a lot to consider, and every single action you take as executor or beneficiary is the result of weighing rights against practicalities. 


  1. Lynne,

    Another excellent post. 'Everyone' should read this.....INCLUDING -ALL ESTATE LAWYERS.


    1. Lawyers and law students tell me all the time that they read this blog, just as I read many of theirs!


  2. Lynne,
    I would also add that Executors are often Benficiaries as well.


    1. Yes, that's true because people tend to appoint close family members as POA, executor, and beneficiaries.



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