Written by Jeffrey Skatoff • October 3rd, 2016
Trust accounting litigation can be messy and expensive. In a recent trial, attorney Jeffrey Skatoff prevailed in a trust accounting and probate accounting dispute.
The plaintiffs alleged that the trust accounting was missing a number of assets and did not fully report all activity taking place in the trust, and was in the wrong format. The plaintiffs also alleged that a probate estate accounting should have been prepared, when one was not prepared.
In ruling against the plaintiffs on all issues, the probate court reasoned as follows.
1. There is no required format for a trust accounting, so long as all of the information is presented in a form that is understandable.
2. The plaintiffs failed to establish with any evidence that any assets were missing from the trust or from the trust accounting. As a practical matter, when a trust beneficiary complains that millions of dollars are missing from a trust, the evidence of that should be clear and obvious. A convoluted explanation without direct evidence of missing funds will rarely carry the day. Indeed, the court will quickly lose patience when strong claims are not backed up by strong evidence.
3. Once a beneficiary of a probate estate has received all that the beneficiary is going to receive, that beneficiary loses standing with respect to the estate, and is not entitled to an accounting. This is often the case with beneficiaries who receive specific bequests of cash or property and nothing else. As a practical matter, if a beneficiary has received from the estate everything that beneficiary will ever receive, why force the personal representative to spend time and money accounting, if no other beneficiaries want an accounting?