Wills 11 : The Accounting

Q: My grandmother’s will established one trust for me and one for my cousin.  Each trust was funded with one half of the residuary estate.  Now, my cousin has died, without issue and never having exercised any power of appointment.  Under the terms of my grandmother’s will, the assets of my cousin’s trust have poured over into mine.  Upon reviewing the condition of my cousin’s trust, I think that the Bank should better have diversified her portfolio.

A: Under the Surrogate’s Court Procedure Act, fiduciaries such as executors and trustees have an obligation to account for their actions.  Ordinarily, executors account at the conclusion of estate administration, while trustees account when the trust is terminated or when they cease to serve.  Where a trust is managed over a lengthy period, the trustee often accounts periodically.  In a case like this, you should have gotten notice of accountings even for your cousin’s trust.

To the extent that you were given an accounting, the court will rule that you have already had a full and fair opportunity to raise objections relating to the Bank’s obligations as executor or trustee to diversify your cousin’s assets.  A fiduciary is entitled to finality.  Nothing in the SCPA provides you with a ‘second bite of the apple’ – where you have already been afforded the opportunity to litigate the essence of your objections in a prior judicial settlement proceeding.

If you previously got full disclosure in an accounting, then you should have objected at that time and are barred from doing so after the settlement of the account.  Under certain circumstances –for example, where the Bank procures a decree settling an account through fraud – you may move to set aside the prior decree.  Gather all facts, and bring them to your lawyer.

By: Scott Baron,
Attorney at Law Advertorial

The law responds to changed conditions; exceptions and variations abound. Here, the information is general; always seek out competent counsel. This article shall not be construed as legal advice.

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