2016 Guardian Ad Litem Training Program – Accounting Proceedings


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Dutchess County Bar Association
Guardian Ad Litem Training Program
April 27, 2016



A.  “Informal” Accounting

The account of a fiduciary is most commonly settled “informally” (i.e., non-judicially), due to the additional expense, delay and publicity of a judicial accounting. The operative documents in an informal account are usually:

(i) A “Receipt, Release and Refunding Agreement” (sometimes coupled with Indemnity provisions).

(ii) An “account”, which can run the gamut from (a) full schedules of account in judicial format to (b) statements of assets on hand at the beginning and end of the accounting period.

There is a large body of law connected with informal accountings. Since, however, a Guardian ad Litem would not be appointed in connection with an informal accounting (except perhaps in the most unusual circumstances), we will proceed to a discussion of judicial accountings.

B.  Judicial Accounting

There are some situations in which a judicial accounting (SCPA 2208) is preferable or unavoidable. For example:

(i)  Where an interested party is under a disability. A Guardian ad Litem would be appointed for a person under a disability.

(ii)  Where intransigent beneficiaries can derail the informal accounting by withholding their consent.

(iii)  Where the fiduciary has a conflict of interest.

(iv)  Where significant amounts of money are involved, and the fiduciary wants the certainty of discharge from liability which is available with a judicial accounting.

(v)  An interested party may also petition for a “compulsory accounting” (SCPA 2205).  If the Court grants the relief requested, the accounting proceeds in the same manner as a voluntary accounting under SCPA 2208.


The most common types of Accountings are for Trustees and for fiduciaries of estates (e.g., administrators, administrators d.b.n., administrators c.t.a, ancillary administrators (d.b.n., c.t.a.), executors, preliminary executors and temporary administrators). Other fiduciaries who might account include guardians of the property of an infant or other incapacitated person, attorneys-in-fact (under a power of attorney) and donees under a power-in-trust.


The three basic documents in a judicial accounting proceeding are a Petition, a Citation (or a Waiver of Citation and Consent), and Schedules of Account.

Attached as Exhibit “A” are copies of the following Official Forms Prescribed by the Surrogate’s Court Procedure Act:

    • JA-1 Petition for Judicial Settlement of Account
    • JA-2 Receipt and Release
    • JA-3 Waiver of Citation and Consent in Accounting
    • JA-4 Trust Accounting with Instructions
    • JA-5 Decree of Judicial Settlement for Executor with Trust or Trustee
    • JA-6 Citation
    • JA-7 Non-Trust Accounting with Instructions
    • JA-8 Non-Trust Decree of Judicial Settlement
    • JA-9 Compulsory Accounting Citation
    • JA-10 Petition for Compulsory Accounting and Related Relief

You may also be able to access surrogate’s court forms on line at www.courts.state.ny.us/forms/surrogates. The forms for Schedules of Account require special mention.

A. “Form” JA-7 (“Non-Trust Accounting with Instructions”) isn’t actually a form: it is simply instructions. Form JA-7 is not helpful as a guide as to what schedules of account should look like.

B.  There are two basic types of Schedules of account:

(i) Estates with no trusts

These schedules report income receipts separately (Schedule A-2), but otherwise commingle income and principal).

(ii) Trusts, and estates with trusts

Income and principal are important categories for trusts. These schedules report income receipts separately, and they also separate expenses chargeable against principal (Schedule C) from expenses chargeable against income (Schedule C-2), and report principal on hand (Schedule G) separately from income on hand (Schedule G-1).

Attached (as Exhibit “B”) for your reference is a website reference to Schedules for an estate with trusts.


An in-depth analysis of the subject matter of accounting schedules is impossible in the few minutes allotted to this presentation. This presentation will concentrate more on the types of issues a Guardian should be looking for in reviewing an accounting (only some of which are contained in the Schedules of Account). For a more detailed guide to the analysis of the schedules of account, see the attached New York State Bar Association “Practical Skills” outline (attached as Exhibit “C”) I prepared for a CLE program a number of years ago.

A.  Review Will or Trust Instrument

Your ward’s interests are usually created by a Will or Trust Instrument (for brevity’s sake, hereinafter collectively referred to as “Will”). It may seem obvious, but an essential first step is to review the Will. Some issues are basic (for example, if the Will says your ward is entitled to 1/4 of the residuary estate, the accounting should show that your ward will receive 1/4 of the residuary estate).

There may be other, less obvious, issues. Read the whole instrument, not just the limited portion which defines your ward’s interests. You never know what you may find there:

1.  There may be a relevant provision located at the other end of the instrument (e.g., a definition of “issue;” an authorization of (or restriction on) discretionary income and principal distributions; allocation of commissions contrary to statute).

2.  There may be something relevant hidden in the “powers” section (e.g., restrictions on types of investments).

3.  There may be ambiguities which require a construction proceeding under SCPA 1420 (for example, recently when reviewing an accounting and the underlying Will I noticed an “anti-lapse statute” (EPTL 3-3.3) issue which the preparer had missed). 

Let your imagination roam free. Don’t be confined by the section in which your ward’s interest appears, or by the description of your ward’s interest by the petitioner – there is no guarantee that the petitioner got it right.

B.  The Total (of the Schedules of Account) Should Equal the Sum of Its             Parts

Again, it may seem obvious, but the schedules should add up and cross-reference properly. While I am not suggesting that all the math be reviewed (especially when the schedules have been prepared using an accounting program), at a minimum the totals on each separate schedule should agree with the total shown for that Schedule in the Summary Statement.

It may seem even more obvious that the numbers in the Summary Statement should add up, and you should check to see that they do. In a judicial accounting I brought on recently the Schedules were prepared by qualified accountants using the latest programs, and but because of a glitch in the program the numbers in the Summary Statement did not add up.

C.  Expenses (Schedules C [Principal Expenses Paid], C-1 [Unpaid                        Administration Expenses] and C-2 [Income Expenses Paid] and D                [Debts]

1.  Expenses and Debts In General

To make up a statistic which empirically sounds correct, 90% of potential objections to an accounting will be found in these Schedules. Large expenses/debts and “unusual” expenses/debts may require explanation or verification. Some random illustrations: Are cable TV bills or magazine subscriptions (or any other bills normally considered as personal to the decedent) still being paid a year after death? Are there any “5 figure” debts or expenses paid without explanation which are not legitimate on their face? Are storage charges for decedent’s tangibles being paid more than a year after death?

2.  Legal Fees

You are required to review legal fees (whether paid or unpaid). The attorneys will be required to submit an Affidavit of Legal Services.

The standard for legal fees in estate proceedings is that of Matter of Potts, 241 NY 593, and Matter of Freeman, 34 NY 2d 1.

Uniform Rules for Surrogate’s Courts section 207.45 provides that if an estate has not been fully distributed (or judicial accounting filed) within 2 years of the date when permanent letters testamentary or administration have been issued (or 3 years, if a federal estate tax return is required), a statement as to the status of the estate must be filed with the court. Failure to file such a statement may constitute a ground for disallowance of fees.

3.  Commissions

The area of fiduciary commissions is densely complicated. Some rules are arcane, others counter-intuitive. Some issues and areas to examine:

a.  As Always, Check the Basics

Assuming there is no question as to whether the assets are commissionable, are the correct commission tables being used? Is the math correct? Are Executors’ commissions calculated separately on “receiving” commissions and “paying” commissions? When trusts are involved, are Executors’ commissions properly allocated against principal and income?

b.  Specific Legacies; Real Property

SCPA 2307(2) provides that commissions are not payable on specific legacies. Commissions are payable on general legacies. See EPTL 1-2.8 for the definition of a “general disposition” and EPTL 1-2.17 for the definition of a “specific disposition.” Commissions also are not payable on real property, unless the Executors have in some manner exercised “dominion and control” over the real property (such as selling the real property to raise cash needed for debts, expenses and/or taxes).

c.  Advance Payment of Commissions

SCPA 2307(1) prohibits payment of Executors’ commissions prior to the judicial accounting, unless application for advance payment was made pursuant to SCPA 2310 or 2311. Unauthorized advance payment of commissions can result in surcharge and/or payment of interest on unauthorized payments.

d.  Commissions for Attorney-Executor

If an attorney is also acting as an Executor, SCPA 2307-a requires that the testator execute a written acknowledgment of disclosure that Executors’ commissions are payable in addition to legal fees (and requires certain additional information). In the absence of such disclosure, the commissions of an attorney who also acts as Executor shall be one-half the commissions to which he would otherwise be entitled.

e.  Trustees’ Commissions for “Old” Trusts

Commission rates and commissionability of trust assets (and the proportion in which commissions are charged against principal and income) have changed over the years. If a trust is old and there has not been an accounting for many years, you should check as to the rates used and the allocation of the charges for commissions.

Attached as Exhibit “D” is an analysis of Trustee commissions in periods before the present 1993 and 2001 amendments.


The fiduciary’s conduct should be reviewed as to the following areas, among others:

A.  Self-Dealing

For example, were there any purchases and sales to fiduciary without court approval?

B.  Conflict of Interest

For example, did the fiduciary steer business to himself or a relative, without an express exoneration of conflicts contained in the governing instrument?

C.  Exercise of Discretion

For example, if you as Guardian ad Litem represent a remainderman of a trust, and there have been significant principal invasions to the income beneficiary, were such invasions authorized by the governing instrument?

D.  Marshaling Assets

For example, are there assets on Schedule A (statement of original assets on hand) that are not on hand at the end of the accounting period, with no explanation as to their sale, distribution or other transfer out of the account? Also, Schedule A should be cross-checked against the estate tax return, or if none, against the Inventory of the Executor or Administrator required to be filed in Court (22 NYCRR section 207.20).

E.  Payment of Claims

For example, have all the claims reflected in the accounting been paid or otherwise dealt with? Should the fiduciary have asserted a statute of limitations defense against a claim?

F.  Tax Returns

Were the necessary tax returns filed (such as decedent’s final income tax returns, estate tax returns, fiduciary income tax returns)? Were penalties or interest paid for late filing?

G.  Investment of Assets

1.  Prudent Investor Statute (EPTL 11-2.3)

For example, did the estate contain disproportionate investments in 1 or 2 stocks or other assets which dropped significantly in value during the accounting period, which the fiduciary should have diversified, or were there other investments which dropped significantly in value? A drop in the value of an investment of, say, 25% may prompt the Guardian ad Litem to investigate more closely the fiduciary’s investment performance, and require the accounting fiduciary to provide an explanation of the loss. See Matter of Janes, 90 NY2d 41 (1997), in which the Court of Appeals surcharged the Executors of an estate that was over-invested in Kodak stock.

Did the governing instrument specifically permit retention of assets that originally constituted a disproportionate share of the estate – which although not a perfect defense to imprudent retention, nevertheless gives the fiduciary some ground to stand on?

2.  Principal and Income Act

There can be Principal and Income Act questions under EPTL 11-2.1, et. seq. (prior to January 1, 2002), and under EPTL Article 11-A (on or after January 1, 2002). For example, were estate or trust expenses properly charged against principal or income? Were receipts properly credited to principal or income?


Your investigations will culminate in a report that you will submit to the Court. The Guardian ad Litem is required to file his or her Report or Objections “within 20 days after the appointment unless for cause shown the time to file such Report or Objections is extended by the Surrogate.” Your report should cover some or all of the following:

A.  Qualification to Act as Guardian; Review of Court Files

The report should recite that the Guardian has filed his or her qualification papers, and reviewed the Court files.

B.  Jurisdiction

There are numerous jurisdictional issues and questions which may need to be addressed.

1.  Service on Your Ward and Necessary Parties

The citation should be served on your ward, unless he or she is an infant under the age of 14.

If your ward is an infant, service should also be made on his or her parent (unless Petitioner is the infant’s parent).

If your ward is institutionalized, process should also be served on an employee of the institution authorized to accept service of citation.

Admissions of due and timely service are not allowed. Waivers and Consents should also probably be avoided.

2.  Service on Other Necessary Parties

The due diligence of Petitioner should be examined if Petitioner claims there are necessary parties who cannot be found. If Petitioner’s due diligence seems insufficient, the Guardian might contact the Petitioner, or report his or her concern to the Court.

Timeliness and adequacy of service on other necessary parties should be examined.

3.  Review Petition

You should review the petition, to determine whether all necessary parties named in the petition have timely received citation in the accounting proceeding, or have waived process.

4.  Jurisdiction As To Adopted Persons

In Exhibit “G” there were questions as to whether jurisdiction was required over a person who might have been “adopted out”.

C.  Meeting With Your Ward

Your Report should discuss your meeting with your ward. A meeting with your ward can be significant, even if your ward cannot communicate or comprehend the substance of your meeting. What you come away with from the meeting which can be significant.

D.  Objections

Filing objections should be a last resort, and will be discussed in Section VII of this outline.

E.  Recommendations to the Court

After discussing issues, you should make your recommendations to the Court. It is important to remember that, in addition to representing your ward, you are also an officer of the Court. It may be that your recommendations should be adverse to the interests of your ward.

“The primary allegiance of the guardian ad litem is the ward, but he or she has a concurrent obligation as an officer of the court to make a thorough, fair and objective report.” Guidelines for Guardians Ad Litem, May, 2003, revised and edited by the Committee to Revise Guidelines for Guardians Ad Litem, at Page 22.


If there are imperfections in the accounting, the Guardian ad Litem should attempt to resolve the issues prior to filing Objections. If the issues cannot be resolved informally, the Guardian ad Litem can file Objections, either in his or her Report, or by separate Objections.

A.  Deposition of Fiduciary Before Filing Objections

You can depose the fiduciary prior to filing Objections (SCPA 2211(2)). It may be that a deposition is necessary to determine whether Objections should be filed.

B.  Basis for Objections

The basis for the Objections would be the lines of inquiry discussed above.

C.  Your Ward’s Interests

It is worthwhile to observe here that your ward should have a pecuniary interest in any Objections you might file. Even if the fiduciary is clearly responsible for acts which require surcharge, as Guardian ad Litem you do not have the mandate to file Objections unless your ward’s economic interests are adversely affected.

Even if your ward’s interest is not sufficient to warrant the filing of Objections, you should raise your concerns in your Report.

D.  Pretrial Proceedings; Settlement

If Objections are filed, you will be required to participate in pre-trial proceedings. As matters progress, you would do well to encourage (where circumstances merit) appropriate settlement of the matter, and participate in a settlement, though such controversies can only be settled with leave of court.


1.   Jurisdiction

Has jurisdiction been obtained over all necessary parties (by citation or waiver and consent)? Were citations served within the time limits of SCPA 307 (10 or 20 or 30 days)? Were parents of minors served? Were infants 14 or older also served? Is required information about minors set forth in petition?

2.  The Will

Does the accounting party have it right? Are all bequests properly shown in the schedules? Are the necessary people cited? Does the will contain any special fiduciary powers or authorizations? Read the whole will and not just dispositive provisions?

3.  Numbers

Do numbers in Summary Statement match up with number totals in Schedules? Do numbers on the Summary Statement add up correctly? Do numbers in Schedules add up correctly? Is the cash reconciliation accurate? Zero sum: is every asset shown as received (e.g., Sch. A or A-1 [principal or income received] or F [new investment] shown as disposed of [Sch. A-1 or B-1] or on hand [G or G-1]?

4.  Losses on Investments (Realized or Unrealized)

As a general rule of thumb, if there is a loss of 25% or more on an investment, a GAL should make inquiry as to the circumstances, and report on the results of that inquiry.

5.  Proper Format

For estate accountings there are different formats for Estates without Trusts (Form JA-7) and Trusts and Estates (Form JA-4).

6.  Family Tree

Required if (i) there are no distributees, (ii) only one distributee, or (iii) “where the relationship to the decedent is grandparents, aunts, uncles, first cousins or first cousins once removed” (Uniform Rule 207.16). This becomes relevant for accountings for administrators of intestate estates.

7.  Due Diligence

Uniform Rule 207.16(d) requires that a petitioner exercise “due diligence” to find missing distributees. In some cases, the citation must be addressed to “unknown distributees” and the citation must be published. This becomes relevant for accountings for administrators of intestate estates.

8.  Proposed Schedule of Distributions

Does it accurately set forth the way the assets should be distributed?

9.  Commission Calculations

Are they accurate? E.g., are specific bequests and non-probate assets excluded from estate commissions? Are estate commissions properly separately applied to receiving and to paying? Are computations of interim annual commissions for trusts included?

10.  Debts and Expenses

As a general rule, debts and expenses are the source of a majority of the problems with an accounting. Principal and income charges: are they accurate (e.g., trust annual commissions 2/3 to principal and 1/3 to income)? Are debts and expenses on the correct schedules? Are expenses proper (e.g., are payments shown for cable TV for years after death? Are there beauty parlor expenses as debts of a male decedent? Do professional fees (e.g., legal and accounting) look appropriate? Should affidavits of services be required?


Exhibit A

    • Copies of the Official Judicial Accounting Forms prescribed by the Surrogate’s Court Procedure Act

Exhibit B

    • Website address for Schedules of Accounts for an estate with trusts

Exhibit C

    • Outline 1994 N.Y.S.B.A. Practical Skills Course “Preparation of the Account and Filing the Accounting”

Exhibit D

    • Analysis of Trustee commissions in periods before the present 1993 and 2001 amendments

Exhibit E

    • Format of a relatively simple Report of Guardian Ad Litem (for the “Susan” Estate)

Exhibit F

    • Report of Guardian ad Litem with Schedule by Schedule comments

Exhibit G

    • Report of Guardian ad Litem with Extensive Discussion of Jurisdictional Issues

To download a complete copy of the 2016 Guardian ad Litem Training Program – Accounting Proceedings outline and exhibits, please click here.

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