Wrapping Up an Estate from a Beneficiary’s Perspective

Key Things to Know to Protect Your Rights

In my practice, I handle a lot of estate administration work in Surrogate’s Court.  When someone dies and their Last Will and Testament (“Will”) is submitted to probate, the beneficiaries of that Will want to ensure they receive what they are entitled to.  

I have frequently had estate beneficiaries come to me and ask how they can ensure they receive what they are due.  What follows is a set of questions and answers that addresses those issues.

Are there different types of beneficiaries?

Yes.  In general, beneficiaries of a Will can be recipients of a specific bequest, general bequest, or residuary bequest.  A specific bequest is a gift a particular item, i.e. “I give my diamond wedding ring to my daughter”.  A general bequest is a gift of a particular sum of money, i.e. “I give $5,000 to each of my grandchildren”.  A residuary bequest is a gift of what is left of the estate assets after all specific bequests and general bequests are distributed and all debts, claims, and expenses are paid.

What do the beneficiaries have to do?

For recipients of specific bequests and general bequests, their situation is hopefully relatively simple.  They just have to ensure that they receive the specific item (i.e. the wedding ring) or specific amount of money (i.e. $5,000) that they are entitled to.

What problems can relate to a specific bequest?

With a specific bequest, it’s possible that the language used to describe it is imprecise.  For example, if the decedent gives a beneficiary “all my tools and equipment”, there may be a difference of opinion as to what that exactly refers to.  It is also possible that the item that is described no longer exists.  It could have been sold, lost, or given to someone else during the lifetime of the decedent.  

What problems can relate to a general bequest?

With a general bequest, it is possible that there is insufficient money to pay all the bequests in the Will.  For example, after paying the debts of the decedent, claims against the decedent, and the costs of the estate administration (which need to be paid first), there could be $40,000 left to distribute in an estate.  If there are ten gifts of $5,000 each to the decedent’s grandchildren, then there is a deficit of $10,000 in the estate assets.  In that case, the grandchildren would each take a pro-rata reduction of $1,000 – resulting in a gift of $4,000 each, instead of the intended $5,000 each.

What problems can relate to a residuary bequest?

With a residuary bequest, the beneficiary should take steps to ensure that the amount they are receiving is appropriate.  To do that, they should request an informal accounting from the executor as to the payment of all debts, claims, expenses, specific bequests, and general bequests.  In my practice, I usually provide to the residuary beneficiaries what I call a “checkbook accounting”.

What is a checkbook accounting?

A checkbook accounting is an annotated copy of the checkbook register for the estate checking account.  It would show all money coming in and all money going out, with explanations for each entry.  The explanations can be quite simple, i.e. “proceeds of liquidating savings account” or “payment to accountant for tax return prep”.  

Is an informal accounting required?

No. Sometimes the beneficiaries are happy to receive their residuary bequest without additional explanation.  That could be the case because they trust the executor and need no further information, or perhaps because the executor has kept them thoroughly informed throughout the administration of the estate.

What if a beneficiary has concerns?

A beneficiary can certainly have concerns that they have not received what they are entitled to.  Examples can include the following:  a recipient of a specific bequest who is told the item no longer exists, a recipient of a general bequest who is told there is insufficient money to pay them the full amount, or a recipient of a residuary bequest who believes they are not being paid the correct amount.

What does a beneficiary do then?

As I noted before, the beneficiary can ask for an informal accounting, if they have not already been provided one.  If they have been provided an informal accounting, but they are not satisfied with what it says, then they can compel a formal accounting.

How do you compel a formal accounting?

To compel a formal accounting, the beneficiary would bring a proceeding in Surrogate’s Court seeking the filing of a formal accounting by the executor of the estate.  The executor will either file an accounting voluntarily after receiving notice of the proceeding, or the Court will order the executor to file one by a certain date.

What happens after the accounting is filed?

After the formal accounting is filed with the Surrogate’s Court, the beneficiary has the right to file Objections to the accounting.  For example, if they believe the executor improperly took money from the estate, they could object to the executor’s actions and ask that the Court to order the money be restored to the estate.

What if the executor denies acting improperly?

If the beneficiary files Objections and the executor denies them, then the Court will conduct a trial to determine the factual circumstances of the case.  If the matter cannot be settled, the Court will issue a Decision determining the rights of the parties.

Are formal accountings common?

No. The vast majority of estates are settled informally, with minimal controversy.  With that said, there are certainly cases where executors have acted improperly, and the beneficiaries need to take court action to ensure they receive what they are entitled to.

Making sure you receive what you are entitled to from an estate can be confusing and challenging.  In order to ensure your rights as a beneficiary are protected, it is advisable to seek counsel from an attorney, who is experienced in the field of estate administration.

Matthew J. Dorsey, Esq. is a Shareholder with O’Connell and Aronowitz, 1 Court Street, Saratoga Springs, NY. Over his twenty-eight years of practice, he has focused in the areas of elder law, estate planning, and estate administration. Mr. Dorsey can be reached at (518)584-5205, mdorsey@oalaw.com and www.oalaw.com.