When an individual passes away, an executor is appointed to take care of the estate as per the deceased’s wishes. The executor can also be referred to as the estate’s personal representative.
One of the main executor’s jobs is distributing the assets to the beneficiaries named in the deceased’s will. In many cases, the heirs want to see the accounting of the estate to check that the executor is dividing it fairly in the best interests of the lost relative or friend. This leaves people asking, “Do executors have to give an accounting to beneficiaries?”
According to U.S. law, giving estate accounting to beneficiaries is not an obligatory task of executors unless requested by the beneficiaries. Whether you are an executor who was asked to disclose accounting to beneficiaries or a beneficiary who yearns to see it, we will answer your questions here in this article.
Under the purview of U.S. law, the executor is held responsible for dividing the deceased’s wealth and taking care of them, which also involves giving an accounting to beneficiaries. Beneficiaries have specific rights, and they should be appropriately informed about the assets, accounting, and the overall state of the estate to enforce their rights. An executor hence is required to disclose several specific information including:
An initial inventory of the estate of the deceased;
The value of the assets at the time of death;
Any change to the value of the assets over time and provide an accounting to beneficiaries throughout the process;
Which assets have left and entered the estate;
State and federal taxes and liabilities that are paid.
While giving accounting to beneficiaries is optional at the outset, it could turn into a legal requirement following a beneficiary's request— making a prime example of how estate laws operate in the U.S.
Normally, beneficiaries can request an executor for an accounting report at any time during the administration process to properly follow the state of the estate's assets. This report should include several bits of information crucial to the estate's valuation along with descriptions and summaries of all transactions. U.S. law points to two types of accounting that can be shared with beneficiaries:
Informal accounting is a common first step wherein the executor can carry out the task of giving an accounting to beneficiaries directly without court interference. However, when beneficiaries are dissatisfied, they might reject the informal report and request judicial accounting.
This marks the second, more exhaustive type of accounting that involves the probate court and could extend the settlement process. Judicial accounting is often required in specific situations, like when the beneficiaries are charities or when the estate is insolvent.
If the executor refuses to provide an accounting to beneficiaries after being requested, beneficiaries might find solace in U.S. law and opt to seek a court order.
Beneficiaries in the U.S. have a legal right to be informed about the respective estate’s affairs, including the accounting to beneficiaries. While executors are not under an obligation to disclose this spontaneously, they are required by U.S. estate laws to provide accounting to beneficiaries if requested.
When a beneficiary requests accounting, the executor is mandated to provide a detailed report tracking all the transactions concerning the accounting to beneficiaries. This includes a report of assets at the time of death, any changes in their value, expenses incurred, and the final distribution of assets. Through this accounting to beneficiaries, they can validate that the executor is efficiently and honestly managing the estate.
If the executor refuses, for whatever reason, to provide the requested accounting to beneficiaries, they can invoke their right within U.S. law to compel the accounting from the executor through a court order. Therefore, while the disclosure of estate accounting isn't automatic, it remains a right that beneficiaries can assert.
Understanding the differences between the types of accounting that beneficiaries can request from the executor, namely Informal and Judicial accounting, is crucial. Both types represent different approaches to providing accounting to beneficiaries.
Informal accounting is a less formal process that does not involve court interference. It is typically the initial step during which the executor provides detailed financial dealings of the estate, and this includes accounting to beneficiaries. This process is designed to be quick, efficient and provides a candid view of the estate's affairs to the beneficiaries.
On the other hand, Judicial accounting is a more formalized process involving the probate court. Beneficiaries typically request judicial accounting when they are not satisfied with the provided informal accounting to beneficiaries. Judicial accounting is more comprehensive and involves a thorough inspection of all estate's transactions by the court. Although this process may extend the settlement of the estate, it provides an added layer of scrutiny to the accounting given to beneficiaries.
In conclusion, whether beneficiaries opt for informal or judicial accounting largely depends on their individual needs, their level of satisfaction with the executor's transparent approach to accounting, and the complexity of the estate's affairs.
To conclude, although the executor does not automatically have to give an accounting to beneficiaries if an estate's beneficiaries request this information, they are legally bound to provide it — a staple in U.S. law. The executor will usually offer an informal accounting to beneficiaries and if the beneficiaries are satisfied, the executor can release their funds and settle the estate. However, if the information provided in the accounting is not satisfactory or if an executor denies giving an accounting to beneficiaries, the beneficiaries are allowed to escalate the matter to court.
If you need to draft a legally-sound document related to this subject, consider getting Lawrina’s last will template that is crafted keeping in mind the U.S. legal requirements for such an important document. Also, Lawrina offers a range of templates related to family and personal matters and the ability to find the lawyer you need.
Inna Chumachenko is the Content Lead at Lawrina. She is responsible for managing all the content found on the blog, guides, and other website pages. Inna has a degree in philology and a vast interest in law. In her role at Lawrina, Inna oversees the content team, establishes collaborations with writers, and curates content from various contributors.
According to U.S. law, it is not obligatory for executors to give estate accounting to beneficiaries unless the beneficiaries make such a request. However, when beneficiaries request this information, the executor is legally obligated to disclose it.
An executor is expected to disclose several specific pieces of information including an initial inventory of the estate, the value of the assets at the time of death, any changes to the value of the assets over time, assets that have left and entered the estate, as well as state and federal taxes and liabilities that are paid.
Beneficiaries can request two types of accounting from the executor — Informal Accounting and Judicial Accounting. The first involves the executor providing an accounting to beneficiaries directly. If the beneficiaries are not satisfied with the informal account, they can request a judicial accounting, which involves the probate court.