E306 What Information Are Heirs Entitled To

E306 What Information Are Heirs Entitled To?

What information are heirs entitled to, and how often can they request it? There is a delicate balance for executors to keep heirs in the loop without draining their time or estate resources in constantly responding to inquiries.

Executor vs. beneficiary rights

Executor vs. beneficiary rights

Why is it important to balance executor and beneficiary rights?

If heirs demand too much, an overwhelmed executor may make errors with actual estate decisions, or grow weary. On a more emotional level, the executor may begin to resent the decedent for putting them through this.

On the flip side, if the executor ignores or stonewalls the heirs, the heirs may resent the decedent for his choice of executor. Disgruntled heirs may pointlessly sue the executor at the end during the accounting process.

The best way to strike a balance is to address their respective legal rights.

The Accounting

The Accounting

The main legal requirement of the executor is the accounting. Note that the accounting comes at the END of the estate. The accounting records every dollar in and out during the executor’s tenure. The executor presents the accounting to heirs, the court, and possibly creditors.

Unlike some other states, New York generally has a “give them enough rope” approach, where the executor has tons of autonomy and authority. But with great power comes great responsibility: the executor is personally liable for any “mistakes” at the end.

There is no statutory legal requirement for providing the heirs with constant updates, just the accounting at the end. But, real world expectations outside of the statutory limitations means giving periodic updates to the heirs.

Periodic updates

Periodic updates

It is best practice for executors to update heirs during the big milestones, such as selling the real estate or successfully filing the tax return. Sometimes those milestones are far apart, so at the very least, the executor should update the heirs every 6 months or even quarterly. It is important for executors to set expectations in the beginning of how often the heirs will hear from them.

If the executor doesn’t update the heirs, a judge may not be happy. When heirs get frustrated, they can file a motion to compel accounting with the court. The judge won’t normally grant such a request 6 months into the estate. But, if the judge finds out that the heirs haven’t been updated in those 6 months, maybe he will be annoyed and approve the request.

Executors should also update the heirs because they may want to buy-in from the heirs regarding major decisions along the way. It would be bad if the heirs found out months later that mom’s house was sold for a certain amount. Keeping the heirs informed eliminates unpleasant surprises and lessens the chance that they will sue the executor for decisions they disagree with. The executor doesn’t have to ask the heirs for permission to do anything, but keeping them in the loop gives the heirs a say in decision-making.

If you want to find out what is required of an executor, I suggest reading my book, “How to Hire an Executor.” A non-professional executor may get overwhelmed by all of the questions and requests from heirs and may not know where to draw the line. Something to consider is hiring a professional executor to deal with your heirs instead of placing the burden on a family member or friend.

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