An executor or administrator, like a trustee has to account for the property that comes into his possession. The accounting obligations of a trustee are discussed here. This article will discuss the accounting obligations of an executor or an administrator in a probate matter.

What is an accounting? An accounting is a written statement detailing the financial condition of the estate. It includes:

1. The property belonging to the estate which has come into his hands.
2. The disposition that has been made of such property.
3. The debts that have been paid.
4. The debts and expenses, if any, still owing by the estate.
5. The property of the estate, if any, still remaining in his hands. And,
6. Such other facts as may be necessary to a full and definite understanding of the exact condition of the estate.
   

In all cases, when the fiduciary does not file an accounting, an interested party can demand an accounting. The Tex. Probate Code 149A says that an accounting can be demanded fifteen months after the executor has been appointed. If the executor or administrator does not file an accounting with 60 days after the demand, the Texas Probate Code provides that an interested party can file suit against the fiduciary to compel the accounting.

If you are dealing with an executor, administrator or trustee and you are not receiving regular updates about the financial condition of the property under his control, you probably need to contact an attorney about your rights before the estate is squandered away.

Start here if you have questions about a fiduciary such as a trustee, executor, administrator, etc. Fiduciary is the general term. Anyone who has custody or control of funds or other property that belong to another is a fiduciary. An executor of a will is a fiduciary because he has custody and control of the estate's funds, the funds that belong to the beneficiaries of the will. An administrator is a fiduciary for the same reasons. The trustee of a trust is a fiduciary because he has custody and control of the trust property that belongs to the beneficiaries of the trust. A stock broker may be a fiduciary. A banker may be a fiduciary. What makes a person a fiduciary is that he has custody and control of funds or property that belong to another.

Background

There is a valid will or trust. You are a beneficiary of the will or trust or you are an heir when there is no will. You are having trouble because a fiduciary is misusing funds, is not accounting for funds or is not paying out funds from the will, trust or estate and you want to know what your rights are. This article should be your starting point to learn about fiduciaries. It provides general information about fiduciaries and their responsibilities. This general article will lead you to specific articles on the site and on our blog where you can find more detailed information about the particular question you have concerning fiduciaries. Click on any highlighted or underlined word to get more information.

Who is a fiduciary

Formal relationships. These include but are not limited to:

1. holders of powers of attorney,
   
2. executors and administrators,
3. partners,
4. agents, and
   
5. spouses.

Informal relationships. These arise when a relationship is a moral, social, domestic or purely personal one and one person trusts in and relies on another. A fiduciary duty based on an informal relationship may arise when a high degree of trust, influence, or confidence has been acquired and abused. It may also arise either as a result of dominance on the part of one or weakness and dependence on the part of another.

Duty

The law places the most exacting civil duty recognized by law on fiduciaries. The fiduciary owes the beneficiary the duties of "...loyalty and good faith, integrity of the strictest kind, fair, honest dealing and the duty not to to conceal matters which might influence his actions to his principal's prejudice." They must place the interest of the beneficiaries above even their own interest. Everything they do with the funds and property in their care must be judge in the light of this question "how does this help the beneficiary?" If there is an action that does not help the beneficiary, the fiduciary is not allowed to do it. The fiduciary is not allowed to use the funds or property to benefit his own interest. If he does, he is guilty of self dealing. A trustee must not have a conflict of interest with the beneficiary or with the use of the funds or property in his control.

Accounting

The law requires that a fiduciary render an accounting of the funds that have come into his control as well as the funds that he paid out. The timing of this accounting varies but generally, he must account at least once a year. The fiduciary also must make an accounting when an accounting is demanded by a beneficiary.

Remedies

If a fiduciary fails to live up to the high duty imposed on him by law, he may be removed, made to pay any damages caused by his breach of duty, forced to return any property that he may have taken from the trust, denied compensation as well as forced to return any compensation that he has received, pay exemplary (punitive) damages and attorney's fees. Of course every case is different. There is never an excuse for a fiduciary violating his duty but the remedies juries impose will vary from case to case depending on the intent of the fiduciary. They will treat harshly the fiduciary who is milking the beneficiaries funds but will treat lightly the elderly aunt who hasn't stolen any money but who has not made regular accountings or disbursements. However, no matter their intent, if they breach their high duty imposed by law, the court will probably remove them.

1. Removal.
2. Actual damages.
3. Disgorgement.
4. Denial of compensation.
5. Punitive or exemplary damages.
6. Attorney's fees.

The foregoing information is general in nature and does not apply to every fact situation. If you are concerned about inheritance laws, have an inheritance dispute, a property dispute or want information about contesting a will, we can help. Please go to our main site www.theprobate.net and use the contact form to contact us today. We would love to learn about your case and there is no fee for the initial consultation.