Executors have a duty to provide appropriate estate accountings to beneficiaries, creditors, and other interested parties. If a party believes that an accounting is inaccurate or misleading, they may be entitled to object to the accounting and ask the court to review or change it. Objections to accountings may also reveal mismanagement or another breach of an executor’s fiduciary duty.
What Are Accountings?
Accountings are financial documents prepared by the executor, or a professional on behalf of the executor. They outline the assets and debts of the estate and often the financial activity of the estate. Accountings may also set out a plan for debt payment and the eventual distribution of assets to beneficiaries. The amount of detail required for an accounting varies by state, but generally an accounting should give interested parties an understanding of how the executor is managing estate assets.
The length and complexity of the probate process may dictate the frequency with which an executor is required to produce accountings. At the very least, an executor may be required to produce an initial accounting soon after they produce an estate inventory and a final accounting just before they distribute estate assets. Beneficiaries, creditors, and other interested parties may also be entitled to request an accounting at any point in the probate process.
What Are Objections to Accountings?
An objection to an accounting typically must be made within a few weeks of the accounting and before any hearing date listed on a court notice.
If a beneficiary, creditor, or other interested party suspects that an accounting is inaccurate or misleading, they may object to the accounting. Objections to accountings may reveal fraud, calculation errors, or poor asset management, among other things. Objections to accountings may also reveal a breach of the executor’s fiduciary duty. An individual who objects to an accounting may ask the court to have the accounting reviewed or changed.
An individual who objects to an accounting may be entitled to perform discovery to receive and review financial documents, such as bank statements. They may also be entitled to depose the executor and other witnesses or question those witnesses at a hearing. If the accounting is deemed inaccurate or misleading, the court may order an executor to correct their mistakes or may remove the executor altogether. A review of an inaccurate or misleading accounting may also lead to the discovery of an executor’s breach of their fiduciary duty.
Defending Against Objections to Accountings
An executor may introduce their own evidence, such as receipts and other financial documents, to defend against an objection to an accounting. Testimonial evidence, such as testimony from a professional who helped prepare the accounting, may also be persuasive. If an objection to an accounting asserts that an executor may be mismanaging the estate or otherwise breaching their fiduciary duty, an executor may introduce evidence to the contrary.