Who Gets an Accounting in an Estate?

Who Gets an Accounting in an Estate?

When someone dies survived by several children, will all those children be entitled to an accounting of how the estate assets are left among them?  The answer is No, as explained in the recent Mississippi Supreme Court case Estate of Flowers.  The court found that children with no immediate right to receive assets through the deceased parent’s will were not entitled to an accounting.

Richard and Brenda Flowers married and had three children: a son, Knox Flowers, and two daughters, Claire and Jane. In 2004, Claire gave birth to a son, “D.A.,” whom Richard and Brenda adopted in 2005. Richard died in 2006. A short time later, Brenda executed her last will and testament. She died a month later. Brenda’s will appointed Knox as her estate executor and provided that he “serve without bond, inventory, appraisal[,] or accounting to any [c]ourt.” The will also established a trust that named D.A. and his descendants as the income beneficiaries. Brenda’s will was probated, and Knox was appointed her executor. The chancery court awarded custody of D.A. to his paternal grandfather and step-grandmother.

Knox presented the estate accounting in private to the chancellor, D.A., and D.A.’s guardians. Claire and Jane filed a request for an accounting which the chancellor denied. The Court of Appeals reversed the denial, finding that Brenda’s will gave Claire and Jane a “shifting executory interest” in the assets of the testamentary trust. However, the Supreme Court disagreed and held in favor of the Chancellor’s decision to deny them an accounting.

The chancellor correctly held that under Brenda’s will, Claire and Jane have so remote an interest with such a mere expectancy of a future inheritance that they are not entitled to an accounting until that interest vests. Brenda’s will established that if D.A. and Knox died without any descendants, then the remainder would be distributed to Claire and Jane; at that point, their interest would vest. If Knox and D.A. died today without any descendants, then Claire and Jane would be entitled to receive an accounting because their interest would vest. But affording Claire and Jane an accounting now, when the interest has not yet vested, would result in an inequitable, unjust burden on the court and on the estate. Claire and Jane argue that an accounting is necessary because proof of mismanagement exists. Knox did not file annual accountings under section 91-7-277. However, it is not error for a chancellor to refuse to order an accounting when the language of the trust expressly allows the trustee to serve without rendering an accounting. Here, Brenda’s will states that the trustee “shall . . . account fully and completely annually, throughout the term of this trust, to such income and/or corpus beneficiaries as there may be or[,] in the event such beneficiary is a minor or a ward, then to such beneficiary’s guardian.” Neither Claire nor Jane yet fall into one of these categories. Therefore, neither is entitled to an accounting absent a showing of waste, loss, mismanagement, or fraud. And the record shows that Claire and Jane have made no such showing of mismanagement. In addition, D.A., the income beneficiary, individually or through his guardians never alleged mismanagement. Thus, equity requires a denial of Claire and Jane’s accounting request for such a remote interest.