Formal Estate Accounting
According
to N.J.S.A. 3B:17-2, an Executor or Administrator may settle his/her account or
be required to settle his/her account in Superior Court. Unless for special
cause shown, he/she shall not be required to account until after the expiration
of one year. An account settled in the Superior Court is a formal accounting.
Most accountings are done in an informal manner. The filing of a formal
accounting must be done by a Verified Complaint and Order to Show Cause.
The filing fee is $ 175.00 and is filed in the Surrogate’s office.
The requirements for this accounting are set out in
R.4:87-3. It is recommended that an attorney be engaged to prepare a formal
accounting as it may result in additional court proceedings.
Therefore, unless all the percent
beneficiaries sign a release and refunding bond, an accounting is required. It
is almost impossible for a non-attorney to follow all the court requirements
and prepare a formal accounting.
3B:17-2
.
Accounts of personal representatives
A personal representative may settle his account or be
required to settle his account in the Superior Court. Unless for special
cause shown, he shall not be required to account until after the expiration of
1 year after his appointment.
.
Accounts of personal representatives
A personal representative may settle his account or be
required to settle his account in the Superior Court. Unless for special
cause shown, he shall not be required to account until after the expiration of
1 year after his appointment.
Court Rule
RULE 4:87. Actions For The Settlement Of Accounts
4:87-1. Procedure
(a)
Actions to settle the accounts of executors, administrators, testamentary
trustees, non-testamentary trustees, guardians and assignees for the benefit of
creditors shall be brought in the county where such fiduciaries received their
appointment. The action shall be commenced by the filing of a complaint in the
Superior Court, Chancery Division, and upon issuance of an order to show cause
pursuant to R. 4:83. A non-testamentary trustee shall annex to the complaint a
copy of the written instrument creating the trust and stating its terms. The
order to show cause shall state the amount of commissions and attorney's fee,
if any, which are applied for.
(b)
An action may be commenced by an interested person to compel a fiduciary
referred to in paragraph (a) of this rule to settle his or her account, and, in
appropriate circumstances, to file an inventory and appraisement.
4:87-2. Complaint
The complaint in an action for the settlement of an account
(a)
shall contain the names and addresses of all persons interested in the account,
including any surety on the bond of the fiduciary, specifying which of them, if
any, are minors or mentally incapacitated persons, the names and addresses of
their guardians, or if there is no guardian then the names and addresses of the
parents or persons standing in loco parentis to the minors;
(b)
shall specify the period of time covered by the account and contain a summary
of the account. The summary shall state, all as shown by the account: (1) in
the case of a first accounting, the amount for which the accountant was
chargeable as of the date the trust or obligation devolved upon him or her, or
where an inventory is on file, the amount of the inventory; or in the case of a
second or later accounting, the balance remaining in the hands of the
accountant as shown in the last previous account; (2) the amount for which the
accountant became chargeable in addition thereto; (3) the total of the first
two items; (4) the amount of the allowances claimed in the account; and (5) the
balance in the accountant's hands. Charges and allowances sought on account of
corpus and income shall be stated separately both in the summary and in the
account;
(c)
shall have annexed thereto the account which shall be dated;
(d)
shall ask for the allowance of the account, and also for the allowance of
commissions and a fee for the accountant's attorney, if accountant intends to
apply therefor; and
(e)
shall be filed at least 20 days prior to the day on which the account is to be
settled.
4:87-3. Form of Account; Statement of Assets to Be
Annexed to Account
(a)
Form of Account. The charges and allowances as to principal
and income and the statements required to be annexed to the account may be
typed or in the form of computer or machine printouts; and, where appropriate,
the accountant may use a single schedule for the presentation of portions of
the account, but charges and allowances as to corpus and income shall be stated
separately.
(b)
Statement to Be Annexed to Account. To all accounts shall be
annexed:
(1)
a full statement or list of the investments and assets composing the balance of
the estate in the accountant's hands, setting forth the inventory value or the
value when the accountant acquired them and the value as of the day the account
is drawn, and also stating with particularity where the investments and assets
are deposited or kept and in what name;
(2)
a statement of all changes made in the investments and assets since they were
acquired or since the day of the last account, together with the date the
changes were made;
(3)
a statement as to items apportioned between principal and income, showing the
apportionments made;
(4)
a statement as to apportionments made with respect to transfer inheritance or
estate taxes;
(5)
a statement of allocation if counsel fees, commissions and other administration
expenses have been paid out of corpus, but the benefits of the deductions from
corpus have been allocated in part or in whole to income beneficiaries for tax
purposes; and
(6)
a statement showing how the commissions requested, with respect to corpus, are
computed, and in summary form the assets or property, if any, not appearing in
the account on which said commissions are in part based.
4:87-4. Service
(a)
Process shall be the order to show cause. If the names and addresses of all
parties interested in the account are known, the order to show cause together
with a copy of the complaint, both certified by plaintiff's attorney to be true
copies, shall be mailed by registered or certified mail, return receipt
requested, as follows: to all such persons who reside in the State at least 20
days prior to the return date; to all such persons who reside outside this
State but within a state of the United States or the District of Columbia, at
least 30 days prior to the return date; and to all such persons who reside
outside the United States at least 60 days prior to the return date. If any
person interested is a minor or mentally incapacitated person and except as otherwise
provided by R. 4:26-3 (virtual representation), service shall be made on the
person or persons upon whom a summons would have to be served pursuant to R.
4:4-4(a)(2) and (3) unless a guardian ad litem is required under R. 4:26-2. A
surety on the fiduciary's bond shall be deemed an interested person. Upon the
request of any interested party a copy of the account shall be furnished by the
fiduciary prior to the date of hearing.
(b)
If the names or addresses of any persons interested in the account are unknown,
notice of the accounting shall be given to the Attorney General at least 45
days prior to the return date, and plaintiff shall file an affidavit of inquiry
as to such names or addresses made in accordance with R. 4:4-5(b). The court
may then enter such order for service of process as it deems proper including
publication of a notice of the proceedings in accordance with R. 4:4-5(a)(3) at
least 30 days before the return date.
(c)
Proof of mailing, and of publication where ordered, shall be filed before the
account is allowed.
4:87-5. Vouchers
Vouchers in support of allowances claimed in an account shall be made
available for inspection by an interested person during business hours at the
office in this State of the accountant or of the accountant's attorney. They
shall be presented to the court only if requested by the court or by an
interested person, or, as to particular allowances, by the Surrogate auditing
the account. Vouchers presented to the court or the Surrogate shall be returned
to the accountant or the accountant's attorney after the settlement of the
account.
4:87-6. Audit and Report on Accounts
The Surrogate as deputy clerk of the court shall audit the accounts of all
fiduciaries unless otherwise ordered by the court pursuant to R. 4:53-7(b),
shall place the same on file at least 20 days prior to its presentation to the
court, and shall make a report to the court upon the audit not later than the
day on which the account is settled. The report shall specify the derelictions,
if any, and other matters that in the Surrogate's opinion should be brought to
the court's attention.
4:87-7. Report of Guardian Ad Litem
A guardian ad litem for a minor or mentally incapacitated person shall file
a written report with the court at least 7 days prior to the day on which the
account is settled. If the guardian applies for the allowance of a fee in
excess of $1,000 the report shall include, or be accompanied by, an affidavit of
services. Notice of all applications for allowances shall be given as provided
by R. 4:26-2(c).
Rule 4:87-8. Exceptions
In all actions for the settlement of accounts, other than plenary actions,
any interested person may, at least 5 days before the return of the order to
show cause or within such time as the court allows, serve the accountant
written exceptions, signed by that person or his or her attorney, to any item
in or omission from the account, including any exceptions to the commissions or
attorney's fees requested. The exceptions shall state particularly the item or
omission excepted to, the modification sought in the account and the reasons
for the modification. An exception may be stricken because of its insufficiency
in law.
4:87-9. Dispensing With Accounting by Agreement
If all parties interested in any separable part of an
account, such as income, are of full age and competent, and so agree in
writing, there need be no accounting as to the same.
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