Dallas Estate Litigation Attorneys for Formal Accounting
When a loved one passes away, the executor of their estate is typically named in their will. If there is no will, the probate court will appoint an administrator of the estate. An executor or administrator is in charge of distributing the estate’s assets to its beneficiaries, according to the decedent’s will or state law. They also have a fiduciary duty, which means they are obligated to act in the best interest of the estate and its beneficiaries. If an executor does not uphold their fiduciary duty, they can be held liable for the harm their actions cause to the estate.
So what happens if you have doubts about the executor or administrator’s fidelity to their role? What can you do as an estate beneficiary, concerned family member, or loved one? Alternatively, if you are an executor or administrator of an estate, how can you protect yourself from accusations of wrongdoing and liability?
The Dallas estate litigation attorneys of Staubus and Randall have helped beneficiaries and executors on either side of this predicament through the process of producing a special legal report called “formal accounting.” Formal accounting is not a task that can be left to an inexperienced or unskilled attorney. With over 100 years of combined legal experience, the attorneys at Staubus and Randall are equipped to handle this complex but critical task.
Contact Staubus and Randall today at 214-691-3411 to speak with one of our estate litigators about the usefulness of formal accounting.
What Is Formal Accounting?
According to the Texas estate code, beneficiaries and other interested parties have the right to demand an accounting, colloquially referred to as an “informal accounting,” from the executor of their loved one’s estate. The informal accounting should include the following:
- Property belonging to the estate that has come into the executor’s possession
- Status of estate property that has come into the executor’s possession
- Any remaining property still under the executor’s possession
- Debts that have been paid by the estate
- Debts and expenses still owed by the estate
- Other information necessary to fully understand the condition of the estate
Furthermore, beneficiaries have the right to related documentation, statements, and receipts that support this accounting.
If the executor fails to provide this informal accounting within 60 days of the request, the beneficiary or interested party may ask the probate court to compel the executor to provide an accounting. After a hearing, the court can order the executor to provide a “formal accounting.” A formal accounting must comply with a certain format that is very detailed. A formal accounting will usually require the assistance of an experienced attorney who thoroughly understands these complicated formats, which will cost the estate additional time and money.
Reasons Why a Beneficiary May Ask for Formal Accounting
There are many reasons why a beneficiary or other interested party may request a formal accounting, including:
- The executor is withholding or hiding information
- The executor may be disobeying the decedent’s wishes
- The executor may have stolen estate assets or property
- The executor may have mismanaged estate assets
- The executor may have utilized estate assets or property for their own personal benefit
- The executor may have abused their power
Reasons Why an Administrator or Executor May Want a Formal Accounting
There are some instances in which an executor may want to provide a formal accounting. If an executor has performed their fiduciary duties properly, a formal accounting will create a record of their honest performance for the court, beneficiaries, and other interested parties. This could protect the executor from liability should a beneficiary accuse them of failing to uphold their fiduciary duty down the road.
Furthermore, by providing a formal accounting before the conclusion of the probate process, the executor can use estate funds to pay for the formal accounting and legal representation to defend the accounting.
What Happens After a Formal Accounting
Once the executor provides the court with a formal accounting, the beneficiaries can review and evaluate this information for accuracy and completeness. An experienced estate litigation attorney can help you look for issues, such as:
- Assets that are unaccounted for
- Unexplained expenditures or losses
- Transfers of assets or property that do not have supporting documentation
- Accounting balances that do not match balances on supporting documentation
If the beneficiaries identify any issues with the formal accounting, they may file an objection with the court. An estate litigation attorney may even sue the executor to compel them to produce documentation through discovery. A judge will consider both sides and issue a ruling, which may order the executor to fix their mistakes, levy a surcharge against the executor, or remove the executor altogether.
How an Estate Litigation Attorney Can Help with Formal Accounting
Formal accounting is a complex task that requires the assistance of a skilled, experienced, and knowledgeable estate litigation attorney.
If you are a beneficiary or interested party concerned about the performance of an executor, an attorney can help you:
- File a request for formal accounting with the probate court
- Review the formal accounting and supporting documentation for issues
- File objections to the formal accounting
- Obtain an order for discovery and subpoena evidence if necessary
- Defend the rights and interests of beneficiaries in court
If you are an executor of an estate asked to provide formal accounting, an attorney can help you:
- Gather documentation required to comply with formal accounting
- Organize the information in the court-approved format
- File the formal accounting with the court
- Represent the executor in litigation
- Defend the executor’s actions in court
Contact Staubus and Randall Today for Help with Formal Accounting
If you have concerns about the performance of an executor, or you are an executor seeking to protect yourself from liability, contact Staubus and Randall today at 214-691-3411 to learn more about and get help with formal accounting.