Does an Executor Have to Show Accounting to Beneficiaries in Georgia?

When someone dies, whether or not they left a will, the person appointed as administrator or executor has a key role in managing the deceased’s estate. As the estate’s personal representative, they also handle the deceased’s financial affairs and have a fiduciary duty to the beneficiaries and heirs. That’s why one of the most frequent questions is, “Does an executor have to show accounting to beneficiaries?”

In short, the answer is yes; unless the heirs or beneficiaries waive their requirement, you are required to show them the estate accounting.

However, this is a more complex matter, so in this post, we’ll take a closer look at the types of estate accounting, the relationship between the estate executor or administrator and beneficiaries, and the potential consequences that might appear when they withhold information. 

Executor Duties to Beneficiaries

Administering a deceased estate is a big responsibility.

And it typically includes collecting the estate’s assets, making financial decisions, paying debts, taxes, and other expenses of the estate, and distributing the remaining assets to the corresponding beneficiaries.

As part of their many duties, an estate executor or administrator should keep an accurate record of all the financial transactions executed on behalf of the estate and provide a proper accounting of the estate’s expenses and assets.

This way, they ensure a transparent probate process and allow beneficiaries to understand how the decedent’s assets are managed. 

Executor duty of transparency

The executor is responsible for acting transparently and accounting for the estate’s financial transactions. Transparency in the executor accounting means:

• Keep accurate and exact records of all financial transactions of the estate. That includes documenting the estate’s assets, income, expenses, taxes, and other financial operations and distributions to the beneficiaries. Detailed records provide clarity and help in preparing a comprehensive accounting.  
• Provide regular updates. The executor should keep the beneficiaries and the interested parties informed regarding the estate administration. That may include both using informal communication, such as email or phone calls, and formal accounting, like reports and financial statements.
• Respond to inquiries of beneficiaries. The estate executor should promptly respond to beneficiaries’ requests related to the estate finances. These might include providing any requested information, clarifying any doubts, and addressing the potential concerns the beneficiaries raise. 
• Preparing and presenting the formal accounting. One of the executor’s duties is to prepare a formal accounting that provides a detailed overview of all the estate’s financial activities. The report should be presented to the beneficiaries clearly and comprehensively and include relevant supporting documentation that ensures the accuracy and authenticity of the accounting.

Executor duty of communication

The executors have the duty to keep all the estate beneficiaries reasonably informed during the estate administration. Beneficiaries should be informed about the estate property and the estate administration’s progress.

They should also be provided with a detailed report about the estate accounting, such as assets, bank accounts, investment accounts, income, expenses, and taxes. The latest two are particularly important as an accounting schedule can mitigate any claim made regarding executor fraud.

Importance of accountability

While the law answers the question regarding does an executor have to provide accounting to beneficiaries, maintaining open communication and transparency throughout the estate administration process can help prevent disputes and foster a better understanding among all parties involved.

Regular updates on the estate’s progress, even if informal, can help build trust between the executor and beneficiaries and make the estate administration smoother and more efficient.

Estate Accounting: What Should It Include?

Depending on the estate’s size and complexity, its accounting might be a simple or very detailed document that includes the assets and every financial transaction made during the executor’s estate administration.

Informal vs formal accounting

Under Georgia law, there are two types of estate accountings:

• informal,
• formal.

Informal accounting is typically the least expensive and the fastest way to keep the estate beneficiaries informed.

It includes a voluntary report prepared and given by the estate executor to the beneficiaries.

It can be used to inform the deceased beneficiaries about the progress during the executor’s administration and address any concerns they might have.   

Informal accounting might be provided periodically, and it helps keep open communication between the estate beneficiaries and executors.

Most estates use informal accounting and releases signed by the beneficiaries before closing the estate.

On the other hand, judicial or formal accounting is a court-supervised process where the executor submits a detailed report to the court, which reviews it. Once the accounting is approved, the executor is released from any responsibility for the actions detailed in the report.

Formal accounting might be initiated by the executor or could be requested by the estate beneficiaries if they have concerns about the estate management or if they believe the personal representative is not fulfilling their fiduciary duties.

Contents of an estate accounting

Before the executor finalizes probate and closes the decedent’s estate, they must provide a final accounting that includes:

• An itemized list of the estate assets.
• Any property or funds that the estate received during the executor’s administration.
• All payments made by the estate, including the funeral expenses, payment of the executor, debts, taxes, etc.
• All distributions to the beneficiaries, including those already made or planned.

The beneficiaries can review the accounting and might also ask for more information.

If they want to see additional documents, such as receipts, tax returns, account and closing statements, and copies of any checks received or issued, the executor may be required to provide them.

Timing and frequency of accounting

Generally, Georgia law requires the executor to file an estate inventory and annual returns with the probate court. 

By default, unless waived by the Probate Court, the inventory should be within six months of their appointment; the first annual return should be no later than sixty (60) days after the anniversary of their appointment and then annually until the estate is closed.

Accounting disputes

In general, there are two types of disputes that might arise surrounding the estate accounting:

• When the executor refuses to provide the accounting, beneficiaries could file a petition with the court to compel an accounting. If you are an executor, you should be aware that when a beneficiary files a claim to compel an accounting and that claim is approved, you might face penalties. If the estate personal representative fails to submit the accounting after the probate court request, their action may be considered a breach of their fiduciary duty, and they could be removed from their role.
• When an executor provides inaccurate or misleading reports, the estate executors and administrators must provide an accurate accounting; otherwise, the beneficiaries have the right to challenge them in court and require them to correct the reports. When the accounting indicates a more significant issue, such as a potential misappropriation of estate assets, the executor might be suspended or removed so the situation can be investigated further.  

Situations like this can get complicated quickly, and there are often hidden landmines you must navigate around. As a result, we recommend you refrain from trying to handle it on your own. Please call our office, and we will be happy to help.

Beneficiary Rights from an Accounting Perspective

Estate beneficiaries have certain rights regarding the estate’s accounting.

They are typically designed to protect the beneficiaries’ interests and ensure the personal representative fulfills their duties fairly and transparently.

Right to receive timely and accurate information.

Beneficiaries are entitled to regular estate administration updates. These updates include information about the estate’s debts, expenses, and assets.

Executors and administrators should provide timely and accurate information to keep beneficiaries informed and avoid potential later problems.

Right to review documents

Beneficiaries have the right to ask for and review relevant documentation related to the estate’s finances, such as bank statements, receipts, invoices, and other documents supporting the personal representative’s accounting.

Therefore, the estate representatives should maintain them and ensure the records are available for review upon request.

Right to request an accounting

The deceased’s beneficiaries can ask the administrator (or executor) for a formal accounting, which will give them a detailed overview of the assets, income, expenses, and distributions of the estate.

Personal representatives must comply and provide all information within a reasonable timeframe.

Right to object

If beneficiaries believe the estate’s accounting is unfair or inaccurate, they can raise objections using legal channels. They have the possibility to file a petition with the probate court overseeing the estate administration.

If the court considers the objections are correct, it may intervene and take appropriate actions.

Right to remove the executor

When an executor consistently misbehaves or fails to fulfill their duties and obligations, beneficiaries are entitled to file a petition with the probate court and ask the executor to be removed.

This would be an extreme situation where, typically, the beneficiaries have to prove to the court that the executor’s actions are not in favor of the estate or the interests of the beneficiaries. These situations are very complicated, and we recommend having a probate attorney assist you.

Does an Executor Have to Show Accounting to Beneficiaries in Georgia?

Under Georgia law, the executor must typically file an initial inventory and annual returns with the probate court, accounting for all the assets in the estate and keeping the probate process transparent.

However, there might be situations where the will itself could exempt the executor from filing the formal reports with the probate court.

Even when these documents are not required, executors should provide informal updates to the beneficiaries. Informing everyone about the estate situation promotes a good relationship among the deceased family members.

When representing executors, we generally recommend offering these informal reports because transparency builds trust and reduces suspicions. When a beneficiary asks for an update or supplementary information, and the executor declines, it can raise doubts about their honesty and actions.

Anyway, keeping an inventory and accounting of the estate is recommended. Besides demonstrating proper management, it also protects the executor from eventual accusations of mismanagement.

What May Happen If the Executor Refuses to Provide Accounting to Beneficiaries?

When an executor refuses to provide an accounting to the estate beneficiaries, there are several steps the latter may take to address the issue:

• Request the accounting: as mentioned before, the beneficiaries have the right to request the accounting unless they waive it or the will itself exempts the executor from that requirement.
• Legal action: when the personal representative refuses to provide the accounting, the beneficiaries might petition the court and ask to compel the executor.
• Seek legal assistance: beneficiaries might hire a probate attorney to guide them through the legal process and help them obtain the required information.
• Document potential breaches: when legal actions are necessary, beneficiaries must document any suspicious actions or mismanagement of the executor to prove their claims.

To minimize potential disputes and legal actions that might occur, the executors should keep transparency and open communication with the beneficiaries.

Potential Options for an Executor Withholding Information

When an executor withholds information, a recommended first step for beneficiaries would be to send him a letter requesting the data and documents they need. 

If the executor doesn’t respond or withholds particular documents, an experienced probate attorney can help beneficiaries file a claim to try to force the executor to provide them with the required information.

If problems with the executor persist, beneficiaries may hire a lawyer to help them remove the executor and ask the court to appoint a new estate representative. Our firm recommends speaking with an experienced probate attorney about your specific situation to understand the best options for your case.

Beneficiaries should keep in mind that the executor hiding information is not just an inconvenience but a violation of their rights. 

The Next Step

If you are in a situation where you feel like the executor is not meeting your expectations, but you ask yourself, “Does an executor have to show accounting to beneficiaries?” please reach out to our office at (770) 692-5530 to set up a consultation. If you’re not quite ready for a consultation, be sure to download our Georgia Probate Handbook to know how the estate should be handled.