Executor's obligation to estate's heirs

Factual Questions
1

Is an estate’s executor required to provide an accounting to heirs of all the activity involved in settling the estate?

This particular situation involves a relatively small estate of a parent, who divided his estate equally among his children.

The executor has never provided an accounting of activity, expenses, etc; now that the house has been sold, he’s presenting us with final checks and a form to sign.

Do the heirs have the legal right to demand a detailed accounting?

Fyi, the executor is something of a bully, and I simply want to know what my rights are. This seems a situation that a dishonest or incompetent executor might abuse. When the parent died (two years ago), I didn’t think it necessary to hire an attorney; but the executor has been uncooperative and dismissive re my requests for info, which leads me to suspect something might be awry.

Recognizing this is the kind of thing that might vary by state, there might be a standard for this.

Comments, advice? Thanks in advance for help.

2

The executor has to provide a full accounting to the probate court. If you believe that the executor has done anything improper, you need to take it up with the court.

3

In which state is the estate being probated? We can quote you the probate statute.

4

Thanks, Walloon-- it’s in Washington state.

5

Washington Statutes

11.44.015. Inventory and appraisement — Filing — Copy distribution

(1) Within three months after appointment, unless a longer time shall be granted by the court, every personal representative shall make and verify by affidavit a true inventory and appraisement of all of the property of the estate passing under the will or by laws of intestacy and which shall have come to the personal representative’s possession or knowledge, including a statement of all encumbrances, liens, or other secured charges against any item. The personal representative shall determine the fair net value, as of the date of the decedent’s death, of each item contained in the inventory after deducting the encumbrances, liens, and other secured charges on the item. Such property shall be classified as follows:

(a) Real property, by legal description;

(b) Stocks and bonds;

© Mortgages, notes, and other written evidences of debt;

(d) Bank accounts and money;

(e) Furniture and household goods;

(f) All other personal property accurately identified, including the decedent’s proportionate share in any partnership, but no inventory of the partnership property shall be required of the personal representative.

(2) The inventory and appraisement may, but need not be, filed in the probate cause, but upon receipt of a written request for a copy of the inventory and appraisement from any heir, legatee, devisee, unpaid creditor who has filed a claim, or beneficiary of a nonprobate asset from whom contribution is sought under RCW 11.18.200, or from the department of revenue, the personal representative shall furnish to the person, within ten days of receipt of a request, a true and correct copy of the inventory and appraisement.

11.76.100. Receipts for expenses from personal representative

In rendering his accounts or reports the personal representative shall produce receipts or canceled checks for the expenses and charges which he shall have paid, which receipts shall be filed and remain in court until the probate has been completed and the personal representative has been discharged; however, he may be allowed any item of expenditure, not exceeding twenty dollars, for which no receipt is produced, if such item be supported by his own oath, but such allowances without receipts shall not exceed the sum of three hundred dollars in any one estate.

11.28.250. Revocation of letters [of administration] — Causes

Whenever the court has reason to believe that any personal representative has wasted, embezzled, or mismanaged, or is about to waste, or embezzle the property of the estate committed to his charge, or has committed, or is about to commit a fraud upon the estate, or is incompetent to act, or is permanently removed from the state, or has wrongfully neglected the estate, or has neglected to perform any acts as such personal representative, or for any other cause or reason which to the court appears necessary, it shall have power and authority, after notice and hearing to revoke such letters. The manner of the notice and of the service of the same and of the time of hearing shall be wholly in the discretion of the court, and if the court for any such reasons revokes such letters the powers of such personal representative shall at once cease, and it shall be the duty of the court to immediately appoint some other personal representative, as in this title provided.

6

**Washington Statutes

11.76.070. Attorney’s fees to contestant of erroneous account or report**

If, in any probate or guardianship proceeding, any personal representative shall fail or neglect to report to the court concerning his trust and any beneficiary or other interested party shall be reasonably required to employ legal counsel to institute legal proceedings to compel an accounting, or if an erroneous account or report shall be rendered by any personal representative and any beneficiary of said trust or other interested party shall be reasonably required to employ legal counsel to resist said account or report as rendered, and upon a hearing an accounting shall be ordered, or the account as rendered shall not be approved, and the said personal representative shall be charged with further liability, the court before which said proceeding is pending may, in its discretion, in addition to statutory costs, enter judgment for reasonable attorney’s fees in favor of the person or persons instituting said proceedings and against said personal representative, and in the event that the surety or sureties upon the bond of said personal representative be made a party to said proceeding, then jointly against said surety and said personal representative, which judgment shall be enforced in the same manner and to the same extent as judgments in ordinary civil actions.

7

**Washington Statutes

11.76.060. Continuance to cite in sureties on bond when account incorrect
**
If, at any hearing upon any report of any personal representative, it shall appear to the court before which said proceeding is pending that said personal representative has not fully accounted to the beneficiaries of his trust and that said report should not be approved as rendered, the court may continue said hearing to a day certain and may cite the surety upon the bond of said personal representative to appear upon the date fixed in said citation and show cause why the account should not be disapproved and judgment entered for any deficiency against said personal representative and the surety upon his bond. Said citation shall be personally served upon said surety in the manner provided by law for the service of summons in civil actions and shall be served not less than twenty days previous to said hearing. At said hearing any interested party, including the surety so cited, shall have the right to introduce any evidence which shall be material to the matter before the court. If, at said hearing, the report of said personal representative shall not be approved and the court shall find that said personal representative is indebted to the beneficiary of his trust in any amount, the court may thereupon enter final judgment against said personal representative and the surety upon his bond, which judgment shall be enforceable in the same manner and to the same extent as judgments in ordinary civil actions.

8

Walloon has done a great job finding statute references, so I won’t try to repeat anything there. My end is not on the legal side any way - my involvement in WA estates has been tax and bookkeeping related.

The procedure begins with an inventory of all assets: bank accounts, investment property, personal possessions, etc. I know the attorneys file this inventory with the courts.

Income, distributions, expenses, etc. are all tracked as the estate goes through probate. If necessary (such as when estate income exceeds $600), there are tax returns filed. Beneficiaries of the estate should get a form K-1 for each year, though there is no requirement (so far as I know) that they get a full copy of the return.

Final accountings are required to close the estate with the probate court. In practice, these have usually been provided to the beneficiaries along with checks and other papers, but I’m not sure that’s required.

You should definitely insist on seeing the accounting. Even well-intentioned fiduciaries can make some interesting mistakes. I’m working with a client who had lost track of a $15,000 certificate of deposit until I asked her for a closing statement.

9

Wow Walloon! Where did you get that? And do you have anything so clear and concise for Tennessee??

LynnM, I’m sorry you’re going through this, I know it really sucks. I’ve got the same thing going on here with my Dad’s estate.

10

Holy cow! That’s a lot of work for a guy that’s named executor. Does he get a cut of the pie above that directly left to him in the will?

11

Not automatically, no. But people don’t get forced to become executor by surprise - there will be an agreement of some kind, and the estate covers any compensation due. If it’s a family member, they may do it for free, but executors are often lawyers who charge a fee for the service.

12

I accessed the Washington state statutes via Westlaw, an online legal research service for subscribers. But the statutes of every state are available online for free, with indexes and search engines.

**Tennessee statutes

Title 30: Administration of Estates**

§ 30-2-301. Making inventory — Return — Notice to beneficiaries

§ 30-2-504. Waste or misappropriation of assets by personal representative

§ 30-2-601. Accountings — Statement in lieu of accounting

13

Also with regard to a situation in Washington State, the Executor (a lawyer) also had durable power of attorney prior to the person’s death. In that the person in question had diminished mental faculties for at least 2 years prior to her death, the lawyer took responsibility for all payments, including those to himself. Do the heirs have a right to an accounting of expenses prior to as well as after the decease? (The lawner has refused a friendly inquiry … which leads one to be suspicious.)

14

I ran across something similar with a relative in NJ. If Medicare was paying a part of the nursing home expenses, AFAIK the person cannot give away substantial portions of their assets (i.e. “here’s a $30,000 gratuity for junior”) since that money must be saved up to pay for nursing home care. If any asset transfers were made from A to B, no matter how disguised as valid transactions, they must be declared and could result in Medicare refusing to pay for nursing home care for A. Presumably there’s a penalty for attempting to evade this by pretending asset transfers are valid payments.

http://www.markfreemanelderlaw.com/myths.asp

Note the article also mentions things like selling a house of other asset for less than market value. A sweetheart deal is a gift.

15

I’m not a lawyer, but I don’t believe an heir has any automatic right to an accounting of how her finances were managed during her life.

Also, I would expect practically any attorney to refuse a “friendly inquiry”. Their clients are entitled to confidentiality. Also, they are not in the habiit if doing any work (including having their secretaries copy and send out documents) unless soneone is paying for it.

16

In most states, property that is wrongfully drained from the estate for a certain length of time can be imputed to the estate. You’d need to consult a lawyer licensed in Washington to determine how to obtain an accounting of pre-mortem disbursements.