Each Executor of an estate or Trustee of a trust owes a fiduciary duty to the heirs and beneficiaries and are required to keep accurate records of all transactions engaged in by him or her. Such fiduciary also has a duty to account to the heirs and beneficiaries to the extent requested.
If a beneficiary has questions or concerns regarding a fiduciary’s handling of an estate or trust, they may request an accounting and copies of all relevant documentation. To the extent that these concerns are not alleviated, or in the event that the executor or trustee ignores the request, the heirs and beneficiaries have the right to file an action in Court to compel access to the fiduciary’s books and records and an accounting of his or her handling of the estate or trust. Before doing so, a beneficiary should consult with an attorney to determine whether such an action is viable given the status of the beneficiary’s interest in the estate or trust.
Recent Cases:
Accountings
Enforcement of Settlement and Legal Fees
In the Matter of the Estate of Elisabeth Wenning Davidson, deceased, 2010 N.J. Super. Unpub. ____ (Docket No.: A-1712-08T2) (App. Div. 2010). On appeal from the Superior Court of New Jersey, Chancery Division, Mercer County. Before Judges Reisner and Yannotti.
This matter involved an appeal of the lower court’s enforcement of a hand written settlement agreement which was signed by the beneficiaries of the estate after engaging in mediation. The lower court also awarded legal fees for the necessity of bringing an enforcement action.
The settlement involved a payment by the executor beneficiary to the other beneficiary for having conveyed real estate to himself without providing an equal amount to the other beneficiary.
At mediation, counsel for the executor drafted a settlement agreement to commemorate the settlement which was signed by all parties. However, the executor refused to sign a typed version of the agreement. He also contested the settlement.
His sister filed a motion to enforce the settlement. The executor continued to deny that he had agreed to the settlement, and his attorneys sent a letter to the court stating that they could not represent him in good faith, and also had a conflict as they had lent the executor monies over the years to fund the litigation. The attorneys for the executor then withdrew from the case.
The lower court granted the motion and upheld the settlement. On appeal, the executor claimed that the settlement should be set aside as he was duressed into the settlement through threats of criminal prosecution and inasmuch as his attorney had a conflict of interest. These claims were rejected.
There were no compelling circumstances, despite the conflict of interest. The lower court’s decision was therefore upheld on appeal.
Failure to Account
In the Matter of the Estate of Francesco Racamato, deceased, 2010 N.J. Super. Unpub. ____ (Docket No.: A-2202-09T3) (App. Div. 2010). On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Passaic County. Before Judges Wefing, Payne and Baxter.
Decedent died in 2003, leaving a will devising his personal property and his residuary estate to his children in equal shares. The named executor was appointed by the surrogate.. In trying to administer the estate, in 2004, the executrix provided an informal accounting to the beneficiaries together with a refunding bond and release. One of the beneficiaries, a daughter of the Decedent who was estranged from the family for many years never responded to the 2004 accounting.
In 2007, this beneficiary sent a letter to the executrix asking for all back-up documentation. At some point, distributions of personal property and cash were made to Decedent’s children, despite failing to receive a sign-off by Decedent’s estranged daughter.
In 2008, this beneficiary filed a complaint requesting a formal accounting and the appointment of a substitute administrator of the estate to administer property in Italy. The trial court dismissed the action finding that it was time barred by Rule 4:85-1, not having been filed within 4 months of the probate of the will. The appellate court reversed, finding that Rule 4:85-1 is inapplicable to claims challenging the administration of an estate. There is no statute of limitations in filing a complaint seeking an accounting. Also, the action is not barred by laches. The key factors in deciding whether to apply the doctrine of laches are the length of the delay, the reasons for the delay, and changing conditions of either or both parties during the delay. The estranged daughter had been adverse to the estate since inception as she had refused to sign the refunding bond and release or to loan the estate monies, like the other beneficiaries. The fact that the other beneficiaries were forced to spend down their legacies on legal fees was not sufficient grounds to apply laches under the circumstances. The lower court’s decision was therefore reversed, requiring the Executrix to file a formal accounting.
Laches – Failure to File Suit Timely
In re Estate of Joseph Wisnewski, Sr., deceased, 2009 N.J. Super. Unpub. LEXIS 1334 (Docket No.: A-3074) (App. Div. 2009). Before Judges Fisher, C.L. Miniman and Baxter.
Issue: Was it proper for the lower Court to deny the plaintiff’s motion for reconsideration seeking to reinstate a surety bond issued to the Executor?
Holding: Yes. The accounting was approved more than 16 years ago and plaintiff failed to provide a meritorious basis to reopen the probate litigation. Plaintiff was afforded the opportunity to present her claims at a plenary hearing several years ago which she did not attend, and the Court perceived no need to address her claims that could have been addressed more than a decade ago.