Contested Accountings in Surrogate’s Court
An Executor or Administrator should keep diligent records of all income and assets received, investment gains or losses, estate expenses, and distributions made.
These records should be available to the beneficiaries (when there is a Will) or distributees (when there is no Will). A beneficiary or distributee can request an Accounting (or a reconciliation of all assets and expenses) as early as seven (7) months after Letters Testamentary (when there is a Will) or Letters of Administration (when there is no Will) have issued.
Contested Accountings in Surrogate’s Court typically occur when the beneficiaries or distributees disagree with the reconciliation of assets.
What are Common Reasons to Contest Accountings in Surrogate’s Court?
The most common reasons individuals typically choose to Contest Accountings in Surrogate’s Court are:
- Inappropriate removal of assets from the estate
- Failure to pursue wrongfully removed assets
- Failure to consider tax consequences of transactions
- Making bad investment strategies
- Paying fraudulent or improper claims
- Incurring excessive fees and expenses
- Failure to keep required records or report to beneficiaries
What if the Administrator/Executor Fails to Provide Information?
If the Administrator/Executor fails to respond to your request for an accounting, then you can file a Petition for a Compulsory Accounting with the Court. If the Judge orders an accounting and the beneficiary does not timely account, thereby disobeying a Court Order, you can seek to hold the fiduciary in contempt of Court. You can also file a motion to remove the fiduciary and (in a petition for Letters of Administration, d.b.n.) seek the appointment of another person to serve as the successor fiduciary. That successor could then state the account on behalf of the negligent fiduciary. Once the account is stated, then you can proceed with Contested Accountings in Surrogate’s Court.
What if You Believe the Information that the Fiduciary Provided is Wrong?
If your fiduciary does account, then you will be able to review all of the transactions. If you review the accounting and believe the accounting is incorrect or that the losses indicated are due to the administrator’s mismanagement of expenses, then you may be able to take action against the fiduciary. When you take action, you will be Contesting the Accounting in Surrogate’s Court. Your action can include examining the fiduciary (SCPA 2211 examinations), filing objections to the accounting, and seeking a surcharge against the fiduciary for the losses or mismanagement of the estate. Objections constitute the pleadings and set forth the issues that can be heard by the Court. The objections are the issues for the trial.
As with pre-objection discovery to a Will contest, a fiduciary can be examined under oath prior to the filing of objections. The fiduciary can only be examined as to the matters concerning the accounts the fiduciary maintained and the administration of the fiduciary’s estate. In addition to examining the fiduciary, you can also request production of documents to help you ascertain whether to file objections.
After objections to the accounting are filed, the case is usually assigned to a Court Attorney Referee who will conference the case to see if a resolution can be reached. If the resolution cannot be reached, then the parties can agree to a discovery schedule where they request documents from each other and from non-parties so that the necessary proof can be ascertained. After discovery is complete, the parties can determine whether they want to file motions for summary judgment or move to trial.
We have experience handling Contested Accountings in Surrogate’s Court and are here to help. Please Contact Us to discuss your needs.