Accounting 101 for Executors

Accounting 101 for Executors: Informal vs. Judicial Accounting (and What Beneficiaries Can Demand)

Estate administration is stressful even in the best families—especially when money, timing, and “I haven’t heard anything” collide. The good news: New York has a well-established accounting process, and most disputes calm down once everyone understands what information beneficiaries are entitled to, when it’s reasonable to expect it, and what happens if transparency breaks down.

This post is a practical roadmap—designed to reduce conflict—so executors can administer efficiently and beneficiaries can ask for information without immediately escalating to litigation.

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Accounting 101 for Executors: Key takeaways (the “conflict-reducing” version)

• An “accounting” is more than bank statements. It’s a structured record of what came in, what went out, and what’s left to distribute.
• Most estates close with an informal accounting: beneficiaries review the numbers and sign a receipt and release to wrap things up without court.
• Judicial accounting is the court-supervised version—often used when someone won’t sign, there’s a dispute, or there are minors/individuals under a disability involved.
• Timing matters. Many executors are cautious about final distributions until the seven-month creditor claim window has run.
• If an executor won’t provide meaningful disclosure, eligible parties can petition the Surrogate’s Court to compel an accounting.

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Accounting 101 for Executors: What is an “accounting,” really?

Think of an estate accounting as the estate’s “financial story,” told in a structured way:

• Opening inventory (what the estate owned when the executor took over)
• Receipts (what came in: bank funds, sale proceeds, refunds, income)
• Disbursements (what went out: bills, taxes, funeral costs, maintenance, professional fees)
• Distributions (who got paid, how much, and when)
• Proposed closing distribution (what remains and how it will be divided)

A helpful accounting is one that a beneficiary can actually follow without guessing: clear categories, dates, descriptions, and totals that tie out.

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Accounting 101 for Executors: Informal accounting: the “most common” path (and why it reduces conflict)

An informal accounting is the practical, out-of-court path: the executor (or the estate’s attorney/accountant) prepares an accounting, shares it with beneficiaries, answers reasonable questions, and asks beneficiaries to sign documents to close the estate.

What beneficiaries typically receive in an informal accounting

A strong informal package often includes:

• A clear accounting (often using court-style schedules, even if not filed)
• Supporting documentation for major transactions (e.g., closing statement for a home sale, large invoices)
• A proposed distribution schedule
• A receipt and release (and sometimes a refunding agreement, described below)

When informal accounting is usually appropriate

Informal closing is most realistic when:

• The major assets have been collected and valued
• Creditor issues are resolved (or a sensible reserve is being held)
• All residuary beneficiaries are adults and competent, and there are no special court-oversight issues

The “release” is not a trick—here’s what it is

A receipt and release is usually the executor’s protection against later disputes over matters that were disclosed: “I reviewed the accounting, I received my distribution, and I’m not bringing claims later about items shown here.”

That said, beneficiaries should read releases carefully, ask questions, and request clarification where something doesn’t make sense. If a release is presented with no meaningful accounting, that’s a red flag.

What is a “refunding agreement”?

A refunding agreement is a promise that if the estate later faces a legitimate expense (like a tax adjustment or a late-discovered claim), the beneficiary will return their pro-rata share up to a stated amount. Executors often use this when they want to distribute but still need a safety net.

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Accounting 101 for Executors: Judicial accounting: the court-supervised version

A judicial accounting is an accounting filed (or submitted) in Surrogate’s Court, on notice to interested parties, and ultimately resolved by a court order (“decree”) settling the account.

There are two common ways it gets there:

1) Voluntary judicial settlement (executor-initiated)

Executors may choose court settlement when:

• A beneficiary refuses to sign a release
• There are complex assets or unusual transactions
• The executor wants the added protection of a court decree
• There are beneficiaries whose interests require extra safeguards (for example, minors)

2) Compulsory accounting (beneficiary-initiated)

If an executor won’t account voluntarily, eligible parties can petition the court to compel an accounting. This is often a last resort after written requests and attempts to resolve disclosure issues informally.

Accounting 101 for Executors: What beneficiaries can do in the judicial process

In a judicial accounting, parties can raise objections to specific entries, request clarifying information through the legal process, and have the court resolve disputed issues.

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Accounting 101 for Executors: The timeline roadmap: what beneficiaries are entitled to see, and when

Every estate is different, but here’s a practical expectations map that prevents unnecessary fights.

Stage 1: Appointment and early administration (first weeks to ~2–3 months)

Reasonable beneficiary expectations:

• Confirmation the executor has been appointed
• A copy of the will (and a basic explanation of next steps)
• A high-level description of what assets are being gathered and valued

Executor reality check: Early work is often behind-the-scenes: securing property, locating accounts, appraisals, dealing with mail, gathering date-of-death values, and lining up professionals where needed.

Stage 2: Information gathering + creditor window (~3–7+ months)

This is where tension often rises: beneficiaries want distributions; executors want to avoid personal liability.

Reasonable beneficiary expectations:

• Periodic status updates
• A rough timeline (“We expect to circulate a draft accounting after taxes / after the home sale / after the creditor period”)
• Explanations for major delays

Executor best practice: A short written update every 30–60 days prevents suspicion and reduces the “radio silence” problem that often triggers conflict.

Stage 3: Pre-distribution transparency (often after major steps are complete)

This is the sweet spot for reducing conflict.

What beneficiaries should be able to review:

• A draft accounting (even if not final)
• A summary of any proposed commissions and professional fees
• A proposed distribution schedule and explanation of any reserve/holdback

Stage 4: Closing (informal vs. judicial)

Option A: Informal closing (most common)
Executor circulates final numbers + receipt/release package; beneficiaries sign; distributions are made.

Option B: Judicial closing
If informal efforts break down—or court oversight is needed—the executor may file for a judicial accounting, on notice to interested parties, and the court settles the account.

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Accounting 101 for Executors – What beneficiaries can demand (and what’s better framed as a request)

Words matter. “Demand” language escalates quickly. Most of the time, a specific, calm written request works better—and produces a faster, cleaner response.

Usually reasonable to ask for

• A written status update and expected timeline
• A summary of estate assets identified and steps taken
• A draft accounting or interim ledger of receipts/disbursements
• Support for major transactions (e.g., real estate closing statement, large invoices)
• Explanation of holdbacks/reserves and when they’ll be released

Common boundaries (why some things won’t be produced)

• Attorney-client privileged communications may not be shared simply because a beneficiary asks
• Overbroad requests (“every email with every vendor”) can create unnecessary cost and delay
• Some documents make more sense once an accounting is drafted (so the paperwork has context)

When “asking” isn’t working

If you’re being ignored or stonewalled, a petition to compel an accounting may be appropriate—especially where there’s prolonged delay, unexplained transactions, or refusal to provide meaningful financial disclosure.

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Accounting 101 for Executors FAQs

Accounting 101 for Executors: Need help getting to “yes” without litigation?

At RK Law, we help executors prepare clear accountings beneficiaries can actually understand—and we help beneficiaries obtain appropriate disclosure without unnecessary escalation. When court involvement is necessary, we handle judicial accountings and objections in New York Surrogate’s Court.To discuss the best path (informal resolution vs. judicial protection), contact us through rklawny.com.

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For more information, please contact NYC Probate Litigation, Guardianship, Probate, and Estate Planning attorney Regina Kiperman:

Phone: 917-261-4514
Fax: 929-556-2089
Email: rkiperman@rklawny.com

Or visit her at:
40 Wall Street
Suite 2508
New York, NY 10005
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