By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Estate Administration and Probate Attorney
An Executor of his mom’s estate is ready to conclude the administration with an Informal Accounting. It has been approved in writing by 16 of the 17 beneficiaries and the 17th is just not responding to communications from the family. While the Executor can file a Formal Accounting and seek to charge the dissident beneficiary with the costs of this accounting no one wants to pursue this in Court. So what can be done?
Can the family approach the Chancery Court which oversees estate administration and evaluate if it will be amendable to an executors motion to direct the beneficiary to respond.
My opinion is that I am not aware of any precedent to this approach. If the answer is no, what other options are available to the executor/administrator?
It should be noted that the beneficiary is not refusing the sign a release – she is refusing to either approve the informal accounting or reject the informal accounting or for that matter advise what questions she claims to have about the informal accounting. In other words, she is simply holding up the process without saying why. Seems to be obstructionist, doesn’t it.
One option available to the Executor is to do a partial distribution of the Estate to the consenting beneficiaries advising them that a complete distribution can’t be made until the executor receives a response from the recalcitrant beneficiary.
An estate beneficiary has no obligation to approve, reject, or comment on an accounting. Furthermore, the beneficiary may not feel competent to review an accounting and may prefer that the Surrogate do so regardless of cost. The personal representative can close out the estate without the beneficiary’s signature [although I wouldn’t] or he/she can do a formal accounting. This comes up from time to time and in analogous situations the Courts of our state have found that the accounting costs can’t be charged to a particular beneficiary.
My opinion is as follows:
- The Executor should distribute a portion of the residuary estate and get releases from all beneficiaries willing to sign off upon receiving their money.
- There is nothing wrong with advising a beneficiary that if he/she proceeds with an application to Court the estate will include a request that the court impose costs on the dissident beneficiary who (apparently without good reason) has caused the need for the court application.
- While it may be true that “An estate beneficiary has no obligation to approve, reject or comment on an accounting” it begs the question of how the executor can proceed to conclude the administration. Everyone seems to agree that in the absence of some sudden awakening of the dissident beneficiary who then responds to the accounting, an application to the court is the only way to go.
- Seeking an order that states that distributions to beneficiaries are permissible and will serve as a legal release of liability to the executor. The only open issue is whether a formal accounting should be part of the application. I think not. I’d start with an informal accounting.
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