Relates to settlement of account by a resigning fiduciary

BILL NUMBER:S4272

Title of bill

An act to amend the surrogate's court procedure act, in relation to the settlement of account by a resigning fiduciary

This is one in a series of measures being introduced at the request of the Chief Administrative Judge upon the recommendation of her Surrogate's Court Advisory Committee.

Assuming there are no persons interested in an estate or trust who are under a disability (see SCPA 103 (40)), a fiduciary may settle an account by formal judicial process (e.g., judicial accounting) whether voluntary or compulsory - or by the nonjudicial settlement by receipts and releases, or by filing an instrument under SCPA 2202 and 2203 (which provide for the recording of instruments settling an account).}.Absent a provision otherwise in the governing instrument, subdivision 8 of section 315 of the SCPA provides that virtual representation applies to the nonjudicial settlement of an account.

The procedure on an informal account is for the fiduciary to prepare an account that is sent to the persons interested together with receipts and releases. Following the return of the receipts and releases, the fiduciary may distribute the estate or trust and then close it. An agreement to informally settle a fiduciary's account will constitute a full settlement discharging the fiduciary and binding the parties provided: (1) all those who would be necessary parties to a judicial accounting sign the agreement; (2) the fiduciary has made full disclosure; and (3) all signatories are adult and competent.}.

Today, the preferred method to settle an estate or trust is by an informal account and receipts and releases executed by the persons interested. The informal settlement of an account usually saves time and money, and may also foster family harmony. In light of this shift in practice, it is proposed that sections 715 and 716 of the SCPA be amended to remove any requirement that a resigning fiduciary seek to file a judicial account. This measure merely removes the requirements and is not intended to usurp the Surrogate's authority to exercise his or her discretion to direct the filing of a judicial account.

This act shall take effect immediately and shall apply to estates of decedents dying on or after such date.

Legislative History:

None. New proposal.

1.Groppe et. al" Harris 6th Edition: New York Estates: Probate, Administration and Litigation, § 18:99 - 18:109.

2.See, Matter of Goldstick, 177 AD2d 225 (1" Dept 1992); Warren's Heaton on Surrogate's Practice § 94.02.