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Unless the beneficiaries and heirs waive their privilege, an executor of a deceased person’s estate usually has to present an accounting of the estate to them. The accounting serves as evidence that the executor properly and in the deceased’s will settled the estate.
Losing a loved one is never easy, and dealing with the complexities of their estate can add to the emotional burden. As a beneficiary, you have the right to understand how the estate is being handled and to ensure that the executor is fulfilling their fiduciary duty. This guide will provide you with the information you need to audit an executor and ensure that your inheritance is protected.
Understanding the Executor’s Role
An executor is a person appointed by the deceased in their will to manage and distribute their assets. They have a fiduciary duty to act in the best interests of the beneficiaries and to handle the estate in a responsible and efficient manner. This includes:
- Identifying and valuing all assets: The executor must create a complete inventory of all assets belonging to the estate, including real estate, bank accounts, investments, and personal property.
- Paying debts and taxes: The executor is responsible for paying all outstanding debts and taxes of the deceased, including funeral expenses, medical bills, and income taxes.
- Distributing assets to beneficiaries: Once all debts and taxes have been paid, the executor is responsible for distributing the remaining assets to the beneficiaries according to the terms of the will.
When to Consider Auditing an Executor
In most cases, the executor will fulfill their duties responsibly and honestly. However, there are some situations where it may be necessary to audit the executor’s actions. These situations include:
- The executor is not providing regular updates or information about the estate.
- The executor is making decisions that seem questionable or not in the best interests of the beneficiaries.
- There are concerns about the executor’s financial management or potential conflicts of interest.
- The beneficiaries have reason to believe that the executor may be misusing or embezzling estate assets.
How to Audit an Executor
If you have concerns about the executor’s handling of the estate, you have the right to request an audit. Here are the steps involved:
- Gather information: Collect copies of the will, any relevant financial statements, and any correspondence you have had with the executor.
- Review the will: Carefully review the terms of the will to understand the executor’s duties and responsibilities.
- Request an accounting: Send a written request to the executor for a detailed accounting of the estate’s assets, income, expenses, and distributions.
- Review the accounting: Once you receive the accounting, carefully review it for any discrepancies or irregularities.
- Ask questions: If you have any questions about the accounting, contact the executor for clarification.
- Consider hiring an attorney or accountant: If you are concerned about the executor’s handling of the estate, you may want to consider hiring an attorney or accountant to help you with the audit.
What to Look for in an Audit
When reviewing the executor’s accounting, be on the lookout for the following red flags:
- Missing or incomplete documentation: The executor should be able to provide supporting documentation for all transactions.
- Unusually high expenses: Be wary of any expenses that seem excessive or unreasonable.
- Unaccounted-for assets: The executor should be able to account for all of the estate’s assets.
- Conflicts of interest: The executor should not be making any transactions that benefit them personally.
- Suspicious activity: Be on the lookout for any activity that seems suspicious or out of character for the executor.
What to Do if You Find Problems
If you find any problems with the executor’s accounting, you should contact the executor immediately to discuss your concerns. If you are unable to resolve the issues with the executor, you may need to file a petition with the probate court. The court will then appoint an independent auditor to investigate the executor’s actions.
Tips for Beneficiaries
Here are some additional tips for beneficiaries who are concerned about the executor’s handling of the estate:
- Stay informed: Keep in regular contact with the executor and ask questions about the estate’s progress.
- Review all documents carefully: Make sure you understand all of the documents that you are asked to sign.
- Don’t be afraid to ask for help: If you have any questions or concerns, don’t hesitate to seek legal or financial advice.
Auditing an executor can be a complex process, but it is important to ensure that your inheritance is protected. By following the steps outlined in this guide, you can ensure that the executor is fulfilling their fiduciary duty and that the estate is being handled in a responsible and efficient manner.
Can you hire someone to do the accounting for you?
It can be beneficial to hire someone to demonstrate estate accounting, particularly if you’re feeling intimidated by the procedure or don’t know where to begin. Hiring an expert could also assist in easing the beneficiaries’ worries regarding the procedure. Two common routes are:
Why do executors need to show an accounting to beneficiaries?
Executors are required to provide beneficiaries with an accounting for a number of reasons.
- Executors are obligated to act in the beneficiaries’ best interests because they have a fiduciary duty to them.
- Throughout the process, proper accounting keeps everyone in the loop.
- Occasionally, in order to complete the probate process and appropriately close out the estate, probate courts will require an executor to present an accounting of the estate.
- States may also need beneficiaries’ formal consent before they can close an estate, and in order to make sure everything was handled correctly, the executor may also need to provide an accounting American Bar Association. Guidelines for Individual Executors & Trustees. Accessed Jun 23, 2023. View all sources.
- Despite the fact that beneficiary approval is not necessary to finalize the estate, giving an accounting can prevent beneficiaries from being confused or taken aback.
The beneficiaries of an estate may occasionally object to the accounting When this occurs, they may file a request for more information with the probate court, and a hearing may be required to determine whether the executor has appropriately managed the estate.
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12 Dumb Mistakes Executors Make
FAQ
How is an executor held accountable?
Can beneficiary ask executor to see bank statements?
How much power does an executor have?
What is a proving executor?
How does an estate audit work?
Once the audit determines that the executor has acted corruptly, the court will remove that person from the position of executor. File for a court proceeding to remove the executor from the estate. The estate audit is used by the heir’s attorney to show the grounds for the executor’s removal.
Do executors have to show an accounting of a deceased person’s estate?
An executor of a deceased person’s estate typically has to show an accounting of the estate to the beneficiaries and heirs unless the beneficiaries and heirs waive their privilege. The accounting is a way to prove the executor settled the estate legally and as the deceased intended. » MORE: Learn the 7 steps of estate planning
Why do executors have to show accounting to beneficiaries?
There are several reasons executors have to show accounting to beneficiaries. Executors have a fiduciary duty to estate beneficiaries, meaning they must act in the best interests of the beneficiaries. Proper accounting helps keep everyone on the same page throughout the process.
When do executors need a probate accounting?
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.