At the Law Offices of Glenn & West, LLC, one of the most commonly asked questions we hear is, “Does an executor have to show accounting to beneficiaries?” The answer is, “Yes!”
As the executor of a will or administrator of an estate, you have a fiduciary duty toward the estate and its heirs. However, the role of an estate administrator can be complicated, and it’s best to fully understand your obligations before making decisions on behalf of the estate.
Your duties involve making financial decisions to sell assets, pay creditors, and eventually allocate the estate to the deceased’s beneficiaries. Your county probate court requires an accounting of the estate and all of the actions that you, as the administrator, took on its behalf. Let’s dive into further detail below.
Estate Administration Compliance and Your Responsibility to Its Beneficiaries
Does estate administration compliance include showing an accounting of the estate to its beneficiaries? Yes, unless the beneficiaries waive this requirement.
However, even if the beneficiaries waive the accounting disclosure requirement, you will likely still have to produce an accounting of the state with the probate court. In addition, it may be necessary to help you pay any taxes the estate owes. Remember, an experienced probate and estate administration lawyer can help guide you if you’re unfamiliar with estate accounting processes.
Duties of the Executor
The role of the executor is to follow the terms of the will and represent the interests of the deceased. Although the will may indicate certain assets and benefits for the deceased’s heirs, as the executor, you only have an obligation to the estate.
But beneficiaries have a vested interest in the executor’s activities — every transaction the estate administrator makes affects their inheritance. If the estate had debts, the beneficiaries would want to know what these debts are; they may even have insight into the debt’s validity. They have the right to understand all transactions made out of the estate.
In Illinois, if the deceased left a valid will, then its executor must provide a full accounting of the estate, including how the assets are distributed. The executor must also be able to produce complete estate accounting to any legitimate interested party or person.
What Is Included in Estate Executor Accounting?
The complexity and details of estate accounting depend on the size of the estate, including its investments, physical assets, and how organized the estate plan is. Executor accounting covers every transaction made on behalf of the estate, including settling debts and valuing and selling assets.
Before an estate is finalized in probate, the executor must submit a final accounting, which includes the following:
- An itemized list of all assets
- Any property or funds the estate receives during its processing
- All expenses of the estate, including the executor’s pay, funeral and burial expenses, debts, and taxes
- Pre-planned distributions to beneficiaries
The estate administrator must also provide supporting documentation with the estate accounting, including:
- Tax returns
- Closing statements
- Account statements of all accounts, including retirement investments
- Copies of any checks received or issued
There may be other supporting documentation, such as real estate closing paperwork, depending on the estate’s contents and the indications of the will.
All beneficiaries and interested parties (such as the lawyer representing a beneficiary) have the right to review the estate accounting and request more information about any actions taken.
Receipt and Release Documents for Executor Accounting
Usually, the estate administrator prepares an informal accounting for the heirs. This may include a simple spreadsheet where they keep track of estate transactions. It can also include a receipt and release.
Once the heirs review the accounting, they sign the receipt and release document, which confirms that they have been shown the estate accounting and release the administrator from future liability regarding their handling of the estate.
If a beneficiary objects to the accounting, they have the right to petition the county probate court for additional information about the administrator’s actions. A probate judge may hold a hearing to determine whether fraudulent activity occurred or explore alleged mismanagement of the estate’s assets.
Get the Help You Need Today
So, does an executor have to show accounting to beneficiaries? YES, and we hope this article helped answer your question! As the estate administrator, keeping accurate and meticulous records is essential. However, some people may be thrust into the role of an estate administrator and need help figuring out where to start.
The estate administration attorneys at the Law Offices of Glenn & West, LLC can help you inventory the estate, understand the terms of the will or how to proceed without a will, and answer your questions about your obligations to the estate. We can also assist with the transactions necessary to process the estate and provide legal advice about settling estate debts.
Our Central Illinois law firm has two convenient locations in Litchfield and Nokomis. Contact us today to schedule a one-on-one consultation with a knowledgeable estate administration attorney.