The recent decision in McAllister Estate v. Hudgin provides a helpful review of the nature of a trustee’s duty to account.
In McAllister, the Deceased named her daughter as her estate trustee and divided the residue of her estate between her daughter and her son. The daughter had acted as the Deceased’s attorney for property in the four years prior to the Deceased’s death.
After the Deceased’s death, the son sought an order compelling the daughter to pass accounts for her actions as attorney.
The daughter argued that the son was not entitled to an accounting because (1) he had no standing to request it (although she did not seriously pursue this ground) and (2) she was not required to keep accounts because when she was acting as attorney her mother was capable.
Pattillo J. found that as the mother had been capable, the attorney had no duty under s. 42 of the Substitute Decisions Act to keep accounts, although the court retained the discretion to order an attorney to pass accounts for all or part of the period in which she acted.
In making this determination, the court considered two main issues: (1) the extent of the attorney’s involvement in the grantor’s affairs; and (2) whether the applicant seeking to compel an accounting has raised significant concerns about the attorney’s management of the grantor’s affairs.
Ultimately, the court decided that both criteria had been met. However, the court stopped short of requiring the daughter to produce formal accounts, deciding that the production of bank statements and investment records was sufficient.
Have a great day,
Megan F. Connolly