The fiduciary of the estate must account to the other interested parties and to the Surrogate’s Court to obtain a final order closing out the estate. The estate may be settled through an informal accounting when everyone agrees to settle the estate. However, when a dispute arises, a formal accounting proceeding must be commenced in the Surrogate’s Court.
The informal accounting avoids the timely and costly accounting proceeding and is favored by the Surrogate’s Court. If all parties agree, an attorney will draft an informal accounting that discloses the fiduciary’s dealings of the estate to all parties. Each party will then sign the necessary documents that acknowledge the informal accounting is acceptable, agreeing to settle the estate, and consenting to be bound by it. Upon distribution of the estate’s assets, the fiduciary must obtain a Receipt and Release from each distributee, in which each distributee acknowledges that the fiduciary fully and satisfactorily accounted for the estate, receipt of money paid or property transferred, said payment/transfer is in full distribution, and the fiduciary is released from liability.
In the event there is a dispute and a formal accounting proceeding is required, the fiduciary must disclose his/her dealings of the estate to all parties and, in addition, must prove that he/she properly managed the estate/trust. This requires review of the financial records of the estate/trust. Complex estates/trusts would require an understanding of accounting and may require review of years of financial records, sometimes requiring a forensic accountant.
It is important to have attorneys who understand estate accountings and can work with the Surrogate’s Court to arrive at a resolution and final judicial settlement of the account. If your estate requires an informal accounting, we will work closely with you to ensure that you properly distribute estate assets and accurately account. Should your estate matter require a formal judicial accounting and involves numerous and complex financial records, we will work with your accountant to draft an account that will be acceptable by the Surrogate’s Court.
The attorneys at James G. Dibbini & Associates, P.C. have over 20 years of experience in Wills, Trusts & Estates.
In order to learn more about estate accountings or you have a Wills, Trusts & Estates matter you would like to discuss, please feel free to contact our office directly.
