A beneficiary of an estate or a trust has the right to review the actions of the executor or trustee by asking for an accounting. To be prudent, an executor or trustee should provide the beneficiary with updates on the status of the estate or trust. First, an inventory should be provided soon after the commencement of the estate or trust followed by an informal accounting which details the disposition of assets and the payment of expenses. And to save on filing fees with the Court, the executor or trustee should propose that the beneficiary waive a formal accounting so that a distribution can occur. This will involve the execution of a waiver of account, release and refunding agreement by the beneficiary which waives a formal accounting and releases the executor or trustee. If agreed, distributions can be made to the beneficiary without a formal Court filing.
In my practice prudence doesn’t always control the day. Often times, instead, a beneficiary does not receive adequate information to form an opinion of the executor or trustee’s handling of the assets of the estate or trust, or worse, the information that is received creates a number of questions surrounding the handling of the administration of the estate or trust, and Court intervention is necessary. In that event, the beneficiary will need to file a formal action with the Court seeking an accounting and a distribution. This forces the executor or trustee to file an accounting with the Court which can be reviewed and objected to by the beneficiary. Any objections to the accounting will be dealt with by the Court and the executor or trustee can be surcharged for misconduct or breach of fiduciary duty. While a Court filing can be a costly proposition, in some cases it simply cannot be avoided.
Rest assured, whether it is done voluntarily or by Court Order, a beneficiary has a right to an accounting and to object to fiduciary misconduct or misappropriation of funds.