Does an Executor Have to Show Accounting to Beneficiaries – Overview
Working as an executor comes up with huge responsibilities. An executor must be able to keep all the records and administer the entire estate to present the beneficiaries and the probate court. It is important that an executor can fulfill all their fiduciary duties and abide by the law.
What is an Executor?
According to federal law, when an individual dies, their property and all the assets must go through a probate. This procedure can be intestate or testate.
The testate procedure means the deceased person has a will that can be executed. The decedent can mention an executor in the will. The primary role of an executor is to administer the estate and distribute it among all the beneficiaries as per the will.
When the decedent of the will appoints someone as an executor, the process can move forward only if that person is willing to serve as the executor. Once everything is sorted, the court can issue a letter of testamentary and give them the authority to serve their duties.
However, if there is no will, the intestate succession law will apply. The court can appoint someone as an executor to distribute the assets and the properties among the family members. The distribution will take place according to priority.
Does an Executor Have to Show Accountancy to Beneficiaries?
An executor must show the accountancy to the beneficiaries unless they are not interested to see. Even if they waive the requirement, the executor must try to show at least a summary of the accountancy. It will help to reduce any complications and eliminate the chances of having any disputes.
What Does an Executor Need to Show to Beneficiaries?
An executor is supposed to look after the deceased’s entire estate. On the other hand, the beneficiaries have the right to have regular updates and enough information about the properties and assets.
However, the executor does not have to share each and every update and decision with the beneficiaries if they are not asking for it.
An executor should provide estate accounting with extremely detailed documents as per the complexity and size of the estate. Before finalizing the probate, the executor should offer a final accounting, including –
- The itemized list of all the assets of the estate
- The initial inventory of the properties and assets of the deceased person
- The total value of the entire estate during the time of death
- If the value of the assets changes over time
- About the assets that have entered and left the estate over time
- All the funds and properties that the estate has received during the administration
- Al expenses, including funeral expenses, payment of the executor, debts, federal taxes, liabilities, and other costs, paid by the estate
- All the distributions that are planned or already made to the beneficiaries
Providing every piece of information to beneficiaries is not necessary. However, when a beneficiary asks the executor about the accounting, he must disclose everything at that moment.
The beneficiaries have all the rights to enquire and review the accounting. They can ask for more information at any time. The executor may need to offer supporting documents if the beneficiary asks for them.
The supporting documents include the following-
- Tax returns
- All the receipts
- Copies of the checks
- Account statements
- Closing statements
The supporting statements or documentation can be long or small depending on the complexity or the amount of the estate.
Responsibilities of the Probate and Executor
Serving as an executor is not that easy. Being an executor means you are administering the entire estate on behalf of the beneficiaries.
As an executor, you must maintain all the records and show them to the beneficiaries or the probate court when required. Everything comes under the executor’s role, from obtaining the testator’s death certificate to meeting all the funeral expenses from the estate.
An executor should be able to interpret the will properly and distribute the estate to the beneficiaries in the correct way. Until the disposal of the estate, they need to manage and maintain all the property’s expenses.
The executor must take care of the settlements by following the direction of the will. They need to make all the pending payments and collect the due money of the estate.
All the transactions should be documented to avoid any future complications. These expenses can affect the portion that a beneficiary receives from the estate.
Therefore they have the legal right to see and understand all the transactions, including the debts, pending payments, and other expenses.
What Are the Primary Rights of a Beneficiary?
- A beneficiary must have an executor to act in their best interest
- They must receive their rightful portion from the estate
- Beneficiaries have the right to know the details about the estate
- They can request to receive all the information about the estate from their executor
- Beneficiaries can also submit a petition to the court requesting a new executor with reasonable justifications
What Can a Beneficiary Do If the Executor Refuses to Show the Accounting?
When an executor refuses to show accountings even after receiving the beneficiary request, the beneficiary can file a petition to the court.
Showing accounting information may not be an initial legal requirement. However, the executor must provide the information upon the beneficiaries request.
An accounting report must contain the following information –
- A list of the assets and the properties in the estate
- The values of all the assets and properties
- The fund details that have been given to the beneficiaries
- Details about the funds that are not yet distributed to the beneficiaries
- All expenses and the incomes of the entire estate
There is some additional information that the beneficiaries can request to see, including tax returns, closing statements, bank statements, and other financial documents.
The beneficiaries can always file a formal accounting request from the court if the executor refuses to show any of this information. Beneficiaries can also petition the court requesting a new executor with reasonable justifications. The corporation of the beneficiaries and the executor is essential for a smooth and uncomplicated transaction.
A beneficiary has all the rights to know the details about the estate. The executor is legally bound to provide accounting details if the beneficiaries request to receive the information. However, the beneficiaries can always petition the court to receive formal accounting details if an executor refuses to share the details.
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