13.4 - C. Compulsory Accounting Proceedings

• Jurisdiction: New York

C. Compulsory Accounting Proceedings

The surrogate’s court, either on its own initiative or on the petition of one or more enumerated interested parties, may require a fiduciary to file an intermediate or final account.¹⁹²² The only criterion for the issuance of an order to account is that it appear to the court that such action would be “for the best interests of the estate.”¹⁹²³ Absent special circumstances demonstrating the need for immediate relief, the court generally will not issue an order directing an account prior to the expiration of the time for presentation of creditors’ claims, or seven months after the first issuance of letters.¹⁹²⁴

The list of persons who may compel an accounting is set forth in SCPA 2205. Included on the list of permissible petitioners is any person acting on behalf of an infant and persons having only contingent interests in the fund. Creditors of a decedent are also permissible petitioners. In the case of creditors, however, the court can (and usually will) convert a creditor’s demand for a compulsory accounting into a proceeding under SCPA 1808(5) to determine the validity and enforceability of the claim. This is done to avoid burdening the estate with the cost and delay of a full accounting merely to permit disposition of a single claim.

It has been held that the mere lapse of time is not a bar to a proceeding brought to require an accounting. The rationale is that the statute of limitations with respect to the right to compel an accounting does not begin to run until the fiduciary repudiates his or her fiduciary responsibilities and liability, to the knowledge of the beneficiaries.¹⁹²⁵ This “repudiation” is deemed to occur when the fiduciary takes a positive position, as evidenced in a filed accounting.

If a fiduciary fails to account after the issuance of an order requiring the account, he or she may be punished for contempt.¹⁹²⁶ The order to account can be enforced by personally serving a certified copy thereof upon the fiduciary and, if he or she fails to act in accordance with the order, by bringing on a contempt application in the manner provided by SCPA 607.

The court is the final arbiter in determining whether a compulsory accounting application should be granted. An accounting can be delayed for good cause shown. However, an unwarranted delay in the accounting, or the failure to comply with the court’s periodic reporting...