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Personal representatives and trustees, as fiduciaries, hold a position of trust and confidence. A breach of their duties can result in personal liability and removal from their office.
Show Cause Proceedings. Personal representatives and testamentary trustees are required to file an inventory and then accounting(s) with the Commissioner of Accounts. Failure by a fiduciary to meet filing requirements or to account for estate assets will require action by the Commissioner of Accounts.
This action is initially in the form of a summons issued by the Commissioner requiring the fiduciary to comply within 30 days. Continued noncompliance will result in the issuance by the Court of a show cause summons requiring the fiduciary to appear in court and show cause why they should not be held in contempt of Court for failure to comply.
These proceedings can result in Court ordered fines, removal of the fiduciary and a judgment against the fiduciary. If there is corporate surety on the fiduciary's bond, the bond may be forfeited for the unaccounted for assets, and the surety company will seek judgment against the fiduciary for the amount of the forfeiture.
Removal of Fiduciaries. Parties interested in the estate may file a petition for removal of a personal representative or trustee. If there is good cause for removal of the fiduciary, such as fraud, self-dealing, gross negligence, or failure to perform duties, the Court may enter an order for removal of the fiduciary and appointment of a substitute fiduciary to complete the administration of the estate.
Suit to Surcharge and Falsify an Account. An account filed by a personal representative or testamentary trustee and confirmed by report filed by the Commissioner of Accounts is prima facie (presumed) correct.
A party interested in the estate can file a suit to surcharge or falsify the account even if approved by the Commissioner of Accounts. Such a suit may not be filed by a party who filed or joined in the filing of exceptions with the Court regarding the Commissioner's report on the account, as they have already had an opportunity for hearing on the exceptions.
A suit to surcharge and falsify an account must be filed within 10 years after the account has been confirmed by report of the Commissioner, resulting in a long period of potential liability exposure for the fiduciary.
A suit to surcharge and falsify an account must specifically allege the items in the account that are the subject of the suit, and the suit will be limited to those issues.
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