When a loved one dies and an executor takes over managing the estate, beneficiaries often want to take a look at the accounting. Beneficiaries have an interest in the estate's affairs since they will receive certain assets. But many times beneficiaries are left in the dark about the progress the executor is making in resolving the estate. For example, beneficiaries may not know all of the debts associated with an estate that must be satisfied. As such, being able to review a full accounting of the estate can help a beneficiary understand what is happening. But do executors in Kentucky have to show the accounting to beneficiaries?
The short answer is yes. Part of that reason is that it allows for transparency. Beneficiaries and other persons can make sure the executor is not taking anything that does not belong time him or doing anything that is otherwise contrary to the decedent's estate plan. But an executor does not have to hand over the accounting to any beneficiary demanding it. Kentucky law has a process for estate accounting. Here is how that process works.
Taking Inventory of a Kentucky Estate & Filing It
An executor or administrator of an estate has 60 days from the time he was appointed executor to file an inventory in Kentucky. This process includes:
- Itemizing the assets only in the decedent's name, such as bank accounts, investment accounts, personal property, and real estate
- Paying all debts – Typically all bank accounts are deposited into an estate bank account, which is used to pay taxes and other debts, and a voucher system is usually used to record the creditor's name, the debt, and the payment
- Distributing assets – After a full accounting has been conducted, including the payments of debts and assets, the remainder of the estate will be distributed according to the decedent's will or estate plan or, if the decedent died intestate, according to Kentucky's intestate laws.
At the time of distribution, the beneficiary has a right to a full accounting of the estate by the personal representative (the executor or administrator). If the personal representative does not provide this accounting to the beneficiary, the beneficiary can ask the court to compel an accounting.
Submitting a Final Accounting of the Kentucky Estate's Affairs
The executor must complete court forms (or prepare their own) to provide a formal final settlement. There are a few different forms, and one required form (Form AOC-846) requires the executor to provide a detailed description of all the transactions made by him on behalf of the estate, including all receipts and distributions. These forms are filed between 6 months and two years after the executor was appointed.
In some cases, an informal settlement may be accepted. In this case, each heir must sign a notarized waiver stating they received their respective portion of the estate and waives the requirements of a formal accounting and settlement. An informal accounting must provide proof of distribution and requires the filing of forms AOC-850 and AOC-851.
However, note that non-probate assets are typically not included in the final accounting. For example, any assets held under joint ownership with the right of survivorship, bank accounts titled payable on death, and mutual funds or brokerage accounts titled transferable on death all go directly to the designated beneficiary. Typically, an estate plan's goal is to be comprehensive and to avoid probate as much as possible, and that's why having an experienced estate planning attorney representing clients in Kentucky is important.
The Key Takeaway
You can request the executor or administrator to provide you will a full accounting of the estate, but the executor may not comply. The personal representative only needs to comply with the courts and file the accounting as required. Once the accounting is filed, it is accessible through the District Court.