Compulsory Accountings – Necessary Parties

Compulsory Accountings – Necessary Parties

By Adam J. Gottlieb

Settling an accounting for an Estate or Trust can be accomplished in three ways:

1. Informal accounting using receipts and releases;
2. Obtaining a decree upon filing receipts and releases with the court; and
3. Judicial settlement of the account, which can be initiated as follows:

a. The Court may move for an accounting;
b. An appropriate person may seek a compulsory accounting; or
c. The fiduciary may seek to voluntarily settle his account judicially.

In a compulsory accounting, a question arises as to who may seek the compulsory accounting.  A "person interested" under SCPA 2205(2)(b) (and as defined in SCPA 103(39)) can petition the court for compulsory accounting.  Among other persons, a residuary beneficiary of an estate is a person interested who can seek a compulsory account.  A creditor, a public administrator or county treasurer and several other parties may also seek a compulsory account.

While the party with standing may seek a compulsory account, certain parties to the account must be advised of the accounting proceeding, per SCPA 2210.  Often, the persons may be the same, but there are circumstances in which they are not.  A notable difference exists when a residuary beneficiary of an estate petitions for a compulsory accounting. 

While all residuary beneficiaries may petition for a compulsory accounting, some of those residuary beneficiaries may have agreed that the accounting should be settled informally.  A beneficiary who has so consented is longer a necessary party in the petition for accounting.

This entry shows just one example of differences between those who may petition under SCPA 2205 and necessary parties under SCPA 2210. There are several other differences to be found in those two statutes.

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