When someone is a fiduciary (Executor or Administrator) of an Estate, they are accountable to the people who have an interest in the Estate. This includes the beneficiaries. When they are doing their job correctly, they are transparent, honest, and communicative.
What if they aren’t doing those things? What if they are being secretive, or doing things that don’t seem right? Or are doing nothing?
Sad to say, these things happen with some frequency.
The remedy in New York is filing a “Petition to Compel an Accounting”.
This is a Surrogate’s Court proceeding which causes a Citation to be issued to the Fiduciary, directing them to appear in Court and file a formal accounting (or otherwise explain why they haven’t yet). As in any Surrogate’s Court proceeding, the person asking for relief (the Petitioner) files a Petition which explains what’s going on. It’s a pretty simple Petition, “I am a beneficiary in the Estate of Smith. Joe is the Administrator. It has been more than 7 months since Joe was appointed, and he has not accounted. Make him file an Accounting”. The wording is a bit more legal, but essentially that’s what it says.
Why 7 months? That’s the time period for creditors to file claims, so generally we don’t expect a fiduciary to account before that time.
The “Petition to Compel” is served on the Fiduciary. When the Fiduciary appears in Court in response to the Citation, the Surrogate generally asks a few questions:
- Have you filed an Accounting yet? If so, the “Compel” proceeding is over. If not, the next question is “why not?”…
- There are all kinds of answers, but no matter the explanation, the next question is, “when can you get it done and filed?”
- Depending on the response, the next question will be “Are you willing to consent to an Order directing you to Account?” The answer should be yes, and then…
- How long will you need? The choices are usually 30, 45 or 60 days. People sometimes ask for longer, but they better have a good reason.
The Court will then note for the record what the Fiduciary has agreed to, and then ask the Petitioner (the one who asked for an Accounting) to “Settle an Order”. This means the Petitioner (or their attorney) will submit an Order for the Judge to sign that directs the fiduciary to account by a certain date. Submitting this order is an important step because the time doesn’t start to run until the Judge signs the Order. If it seems strange that the litigants (or attorneys) have to submit the Order for the Judge to sign, I’d say “Welcome to law practice”.
When the Fiduciary files their accounting, this is a new proceeding. That means their Petition and Accounting gets filed with the Court, with Citations issuing to all interested parties. This is its own proceeding, where objections can be filed and the REAL issues are addressed. I will cover this in a future post.
One more thing about compelling an accounting. What if the fiduciary agrees to account, consents to an Order, an order is signed, and they STILL don’t account. The next step is a Petition for Contempt of Court. Why is it “contempt”? Because the person has violated a Court order. Are fiduciaries ever put in jail for such things?
When things reach that point, they usually do what they are supposed to do. Sometimes that’s what it takes.
And, sometimes at the outset you suspect it will be that way. That’s why you get to ball rolling with the “Petition to Compel”.