Commissioners of Accounts are required to enforce the timely reporting obligations of all fiduciaries for the benefit of the beneficiaries and creditors of the estate. Obviously, timely filings reveal wrongful administration, misdistributions, improper use of estate assets, and other deficiencies in a timely manner, allowing the commissioner to take the necessary action promptly to bring the fiduciary before the court for action or removal.

It is most important for fiduciaries to determine and remember the due dates for their fiduciary filing requirements. Failure to timely prepare and file notices, inventories and accountings is the most comment issue causing fiduciaries to become delinquent and subject to enforcement actions. Other common problems include failure of fiduciaries to read the instructions and forms provided to them when they qualified and failure to secure and retain supporting documents (e.g. bank and accounts statements, invoices and receipts) to support their accounting entries.

Deadlines

Although fiduciary filing deadlines are discussed under the respective fiduciary articles available on this website, a short list of the filing dates is provided below.

Personal Representatives of Estates and Proponents of Wills.

• Affidavit – Notice of Probate: Within 30 days after the date of qualification or the probate of the will.
  
• Estate Inventory: Within 4 months after the date of qualification.
• First & Subsequent Settlement of Accounts: Within 16 months after the date of qualification, for the period of 12 months from the date of qualification. Subsequent annual settlements of accounts covering twelve (12) months are due within sixteen (16) months from the ending date of the preceding accounting period.

Testamentary Trustees

• Trust Inventory: Within 4 months of initial receipt of trust assets.
• First Settlement of Accounts: On an annual basis commencing on or before May 1 of the calendar year following initial funding of the trust. Accounts for each calendar year thereafter shall be filed on or before May 1 of the following calendar year.

Guardians of Minors’ Estates and Conservators of Incapacitated Persons.

• Inventory. The inventory is due within four 4 months after date of qualification.
• First Settlement of Accounts. The first settlement of accounts covering four 4 months is due within six (6) months after date of qualification. Subsequent accounts covering twelve (12) months are due within sixteen (16) months from the ending date of the preceding accounting period.

Enforcement and Action by the Court

Commissioners of Accounts are obligated to commence the actions necessary to obtain timely compliance by all fiduciaries with all reporting and accounting obligations and to advise the court if timely filings are not made. The typical course of enforcement is discussed below.

Delinquency. Although not required by applicable statutes, commissioners typically provide a reminder/delinquency letter or notice to a delinquent fiduciary, indicating that the fiduciary must resolve the delinquency within 30 days.

Summons.  If a personal representative fails to respond to the delinquency notice within 30 days, the commissioner shall report such failure to the court and the court shall order the issuance and service of a summons on the fiduciary through the sheriff or other proper officer, requiring the fiduciary to comply requiring the fiduciary to perform such requirements within 30 days.

Show Cause Order.  If the fiduciary fails to satisfy the requirements within 30 days after the  service of the summons, the commissioner shall report the delinquency to the court and the court will issue and serve a show cause order upon the fiduciary to appear before the court, and  unless excused for sufficient reason, he or she shall be fined by the court in a sum not to exceed $500 and If the fiduciary still fails to make the return within such time as the court may prescribe, he or she shall be deemed guilty of contempt of court.

Personal Assessments to Fiduciary.  Assessments of fees allowed by the Commissioners Fee Schedule Guidelines for the issuance of the reminder notice of delinquency, summons, report to court, show cause order, and court appearances by the commissioner shall be charged against the fiduciary personally. No allowance shall be given for such assessments in the settlement of the fiduciary’s account.

Forfeiture Of Commissions.  If any fiduciary fails to file an account, together with all other statements and items therein required in a timely manner, or if the commissioner finds the fiduciary is chargeable for the accounting period with any money or property not included in that statement, the commissioner may deny the fiduciary a fee for that accounting year, unless the fiduciary shows good cause why the account was not timely filed.

Show Cause Proceedings

Depending on the circumstances of the case, the judge may grant a continuance for a short period of time and direct the fiduciary to make the necessary filing with the commissioner before the next court date. If the circumstances of the case indicate that immediate action is necessary, or if the fiduciary’s failure to make proper filings continues, the commissioner will likely request the court to enter an order removing the fiduciary and appointing a substitute fiduciary.

If it appears that the fiduciary has misappropriated estate assets or cannot account for the estate assets, the commissioner will request the court to enter an order providing for the fiduciaries removal, establishing the liability of the fiduciary and providing for forfeiture of the bond and the surety. The commissioner will normally establish the amount of loss of assets by presenting evidence of the value of assets shown on the Inventory or the ending assets of a previously approved accounting, less approved disbursements or distributions for which there is proper documentation, if any.

There may be instances where it appears that there are remaining estate assets in bank or brokerage accounts or other locations, but the fiduciary simply will not account for those assets. In such cases, the commissioner might request the court to enter an order removing the fiduciary and appointing a substitute fiduciary and providing for the continuance of the case for a period of time to allow the substitute fiduciary to locate and take possession of such assets. At the later hearing, any assets that the substitute fiduciary is able to locate and take possession of will be applied as a credit against the liability of the former fiduciary and the amount of any bond forfeiture.

If the court orders forfeiture of the fiduciary bond, the order may also provide for forfeiture of any commission to the fiduciary and, upon petition of the surety (if the bond is secured), provide for judgment against the fiduciary in favor of the surety company for the amount to be paid by the surety pursuant to a bond forfeiture, plus the attorney’s fees incurred by the surety, plus an additional five percent (5%) for damages to the surety company.

The commissioner is entitled to a fee for each show cause hearing before the court in accordance with the fee schedule adopted by the court that appointed the commissioner.