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If you are a beneficiary who is not getting answers as to the status of an estate or trust, it’s important to know that you have options. You can hire an attorney to represent you, and he or she can communicate with the attorney who represents the fiduciary.
The attorneys can communicate with requests for estate or trust information such as:
- Bank statements;
- Real estate records;
- A list of assets;
- Expenses paid; and
- Documentation of disbursements.
Beneficiaries often hire an attorney because they have unsuccessfully attempted to get information from the fiduciary, and wish to have their questions and concerns addressed. Someone has passed away; they know that they are a beneficiary, but they are not sure of anything else. If the fiduciary refers you to his or her attorney, be aware that that attorney does not represent you and is not obligated to advocate for your rights.
There are many benefits to hiring an attorney to represent you as a beneficiary.
An attorney who represents your rights as a beneficiary can communicate with the fiduciary’s attorney, explain your concerns, and request information or an informal accounting.
An informal accounting would include a list of the assets and expenses, as well as a status of the administration of the estate or trust. After the beneficiaries review the informal accounting, they can make additional inquiries as to the assets of the estate or trust, and request additional items. They may want proof of expenditures, such as taxes that were paid, etc.
If your request for an informal accounting is ignored or not properly addressed, you can petition the court for a compulsory accounting.
By bringing a petition for compulsory accounting, you are asking the court to compel the fiduciary to provide an accounting. Although sometimes this is necessary, it is not an ideal situation. Once you petition the court, you are involved in litigation, which can be very time-consuming and expensive.
The court can compel the fiduciary to provide an accounting to the beneficiaries within a given timeframe. The beneficiaries will then have an opportunity to review the accounting. If they are not satisfied, they can demand discovery.
In discovery, the fiduciary can be ordered to show bank statements, brokerage statements, tax returns, and additional documentation needed to verify and explain the accounting.
If discovery does not bring resolution, the next step is to demand a deposition—which will give your attorney the opportunity to question the fiduciary as to their actions. Litigation is not fun, and it can ultimately lead to a significant reduction of the estate or trust assets because of the legal fees involved.
We advise our clients to try to communicate with the fiduciary to obtain the information requested prior to involving the court. It is usually preferable to allow the fiduciary a reasonable amount of time and opportunity to provide the information requested, and settle the estate or trust informally. Although it may be tempting to give into passions, it is usually economically beneficial for all parties to be reasonable in their requests and transparent in the information provided.
We also recommend that beneficiaries consult with an attorney before signing any documents that may waive a legal right. As a beneficiary, you have rights and you should ensure that those rights are protected by hiring an experienced attorney to represent you.
How would you proceed if you were named as a beneficiary to an estate, but unable to get answers from the executor?
Contact us with questions or comments.