An estate administrator has a duty to manage the estate and do so in the best interest of the beneficiaries. However, not every administrator acts in good faith, and even when they do, disputes and discrepancies can make a beneficiary want to know exactly where the assets are and where they’re going.
What duty does an administrator owe to the beneficiaries of an estate?
An administrator of an estate in Anchorage has what’s called a fiduciary duty to the estate’s beneficiaries. To have a fiduciary duty means to have a duty to act in good faith at all times when it comes to administering something on behalf of another person. Fiduciary duty requires the administrator to act according to a set of rules or laws, and a person with a fiduciary duty may not break those rules even if the beneficiaries ask them to do so. In Anchorage, an administrator of an estate must only spend or reallocate assets for the benefit of the estate. There may be civil consequences for breaching fiduciary duty.
However, if an administrator is suspected of acting in bad faith, as in acting against the interests of the beneficiaries, or suspected of being negligent, the beneficiaries have a right to ask for an accounting.
What is an accounting, and why do I want one?
An accounting is a detailed explanation of how the assets in an estate are controlled, how money is spent, why money has been spent, and what assets remain. An accounting shows who the estate’s creditors may be, how and when they’re paid, and what debts remain.
A beneficiary may seek an accounting to know the current status of an estate. A beneficiary may be suspicious of an administrator’s ability to administer the estate and about what they’ve done so far. For example, a beneficiary stands to inherit a house, but it goes into foreclosure because there weren’t enough assets in the estate to pay the mortgage. The beneficiary didn’t know that, or was sure there were enough assets to pay the mortgage, so the beneficiary wants an accounting to show why there was no money to pay the mortgage.
How do I get an accounting?
In Alaska, a formal accounting is an accounting granted through the court. An informal accounting can be made upon request. If a beneficiary requests an informal accounting directly from the administrator, the administrator is obligated to give one. It may not be extremely detailed, but it should at least offer an overview of what’s happening.
A formal accounting is granted by the court, and may be requested by the court if there’s suspicion that the administrator has mismanaged the estate, or if there’s a legal dispute over the estate. Alaska has specific laws regarding formal accountings.