Trust and Estate Accounting Basics for Surrogate’s Court Practice


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1.  Informal (non-judicial) settlements. Why do them? To avoid the cost, expense and publicity of a judicial account.

a.  Receipt and Release Agreements, coupled with Indemnities and Waivers of Process:

Two approaches:

i. Receipt and Release Agreements with formal accounting schedules in judicial form. (See Receipt and Release in the John Case Estate attached as Exhibit 5A); and

ii. Receipt and Release Agreements with alternative financial reporting backup (e.g. copies of brokerage firm account for estate with cash management account showing receipts and disbursements, but no schedules). (See Receipt and Release in the Thomas A. Jackson Estate attached as Exhibit 5B.)

Q. Why does a Receipt and Release work, legally, to protect the accounting executor (or trustee) without a court proceeding?

A. Because it’s a binding contract, with consideration (the Executor’s willingness to accept a contractual settlement of his account in lieu of his right to a judicial settlement).

Considerations in using Receipts and Releases:

      • There has to be sufficient disclosure to the releasing parties so that they can give up their rights to an accounting and their discharge of the Executor/Trustee is essentially an “informed consent.”
      • It helps if all parties are adult and competent. If not, adult parties can agree to use their best efforts to get their minor children to sign when they reach age 18.
      • Indemnities as a way around the need to get approval from minor or incapacitated beneficiaries.
      • Who can indemnify? Typically an adult party – often a parent of a minor. Remember that an indemnity is only as good as the indemnitor. It helps here to have adult family members with financial “heft.” If you are trying to protect against a minor who will grow up to complain about the account, getting his/her parent to block for him/her by an indemnity is a good approach.
      • Other considerations: What if you have a 16 year old residuary legatee of an estate? If you account judicially you have a guardian ad litem. If you can wait, you can account to an 18 year old in 2 years.

b.  Receipts, Releases and Waivers [SCPA § 2202]. An informal accounting can be filed as part of RRW.

c.   Affidavit of Completion of Estate Proceedings.

d.   Judicially approved informal accounting [SCPA § 2203].

2.  Formal accounting (Erica DeTraglia, Esq.)

a.  Voluntary [SCPA § 2208]

Voluntary doesn’t really mean “voluntary.” Fiduciaries have a duty to account and should not wait too long to do so. (Example of Trustee’s accounts for 50-80 year. Risk of loss of records.)

b.  Compulsory [SCPA §§2205/2206]

Highly useful as offensive weapon for aggrieved beneficiaries of estates and trusts to “smoke out” issues such as self-dealing, imprudence, incapacity, or failure timely to close estate administration. See Petition to Compel Account in Howard Jackson Estate attached as Exhibit 5C.


  1.   Decide What Resources To Use for  preparing the Accounting
  2.   Obtaining Necessary Information and Organizing Documents
  3.   Perform Due Diligence
  4.   Techniques for Requesting Documents


1.  Petition, Citation and Waivers. Use official forms as guideline. All forms can be found at:

a.  Are all interested parties accounted for in the petition?

i.   Minor beneficiary(ies)?

ii.  Has any beneficiary died?

iii.  Whereabouts of the beneficiary are now unknown?

iv.    Has any beneficiary become incapacitated?

b.  Is the fiduciary’s appointment still active?

c.  Have any claims been filed against the Estate/Trust?

d.  Will all bequests be satisfied?

e.  Is the Attorney General Charties Bureau required to be cited?

2.  Review Will or Trust Instrument

3.  The Schedules

a.      Schedule A          Principal Received

b.      Schedule A-1      Realized Increases

c.      Schedule A-2      Income Collected

d.     Schedule B          Realized Decreases

e.     Schedule C           Funeral and Administration expenses and taxes; Funeral and Administration expenses and taxes charged to principal

f.       Schedule C-1      Unpaid Administration Expenses

g.      Schedule C-2      Administration expenses chargeable to income

h.      Schedule D        Creditor’s Claims

i.      Schedule E          Distributions of Principal; Distributions Made (Receipt, Release and Waivers must be filed)

j.       Schedule E-1    Distributions of Income

k.      Schedule F        New Investments, Exchanges and Stock Distributions

m.     Schedule G       Principal Remaining on Hand; Personal Property Remaining in Hand

n.      Schedule G-1    Income Remaining on Hand

o.      Schedule H       Interested parties and proposed Distribution

p.      Schedule I        Computation of Commissions [SCPA § 2307]

   (i)     Executor’s commissions [SCPA § 2307]

   (ii)    Trustee’s commissions [SCPA § 2308 and 2309]

q.     Schedule J       Other Pertinent Facts and Cash Reconciliation

r.     Schedule K      Estate Taxes Paid and Allocation of Estate taxes



• An Attorney Affirmation of Legal Services is required for the Court’s consideration in all accounting proceedings.

• Must institute proceeding [SCPA § 2110]

1.   Must include affidavits of legal services [22 NYCRR§ 207.45]

2.   Elements for consideration. [Matter of Potts, 241 NY 593; Matter of Freeman, 34 NY2d 1]

3.   May be disallowed for failure to file a report of estates not fully distributed. [22 NYCRR § 207.42]

4.   Some disbursements may be disallowed as being attributable to “office overhead.”

5.   See Affirmation of Legal Services in the Dorothy Decedent Estate, attached as Exhibit 6.

B.  ATTORNEY-FIDUCIARY [SCPA §2307-A & 22NYCRR §207.16(E)]

1.  An attorney-fiduciary should file an Affirmation of Legal Services (w/ copy of retainer if engaged other counsel).

2.  Disclosure.

i.  207.16(e). If a person requesting letters to administer an estate as sole executor or administrator is also an attorney admitted in this State, he or she shall file with the petition requesting letters a statement disclosing:

(a)  that the fiduciary is an attorney;

(b)  whether the fiduciary or the law firm with which he or she is affiliated will act as counsel; and

(c)  if applicable, that the fiduciary was the draftsperson of a will offered for probate with respect to that estate.

ii.   SCPA 2307-a. When an attorney prepares a will to be proved in the courts of this state and such attorney, a then affiliated attorney, or an employee of such attorney or a then affiliated attorney is therein an executor-designee, the testator shall be informed prior to the execution of the will that:

(a)  subject to limited statutory exceptions, any person, including the testator’s spouse, child, friend or associate, or an attorney, is eligible to serve as an executor;

(b)  absent an agreement to the contrary, any person, including an attorney, who serves as an executor is entitled to receive an executor’s statutory commissions;

(c)   absent execution of a disclosure acknowledgment, the attorney who prepared the will, a then affiliated attorney, or an employee of such attorney or a then affiliated attorney, who serves as an executor shall be entitled to one-half the commissions he or she would otherwise be entitled to receive; and

(d)   if such attorney or an affiliated attorney renders legal services in connection with the executor’s official duties, such attorney or a then affiliated attorney is entitled to receive just and reasonable compensation for such legal services, in addition to the executor’s statutory commissions.

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