Georgia Administrators and Annual Returns – What’s in a Waiver? Part II

A Georgia estate attorney naturally is asked a lot of questions about the obligations of personal representatives.  In my previous blog post, I addressed the personal representative’s obligation to file an inventory and annual returns with the probate court, the ability of the heirs or a Will to waive those obligations, and the confusion created by the applicable Georgia statutes.  In this part, I explain that, despite waivers in a Will or by the heirs, the personal representative is almost always obligated to report to the heirs at least annually.

As I wrote in my previous post, O.C.G.A. § 53-7-68 and 53-7-69 provide for a waiver of the personal representative’s requirement to provide annual returns to either the heirs or the court, or both.  I also noted there that similar statutes apply to inventories but may actually waive the inventory obligation entirely.  Therefore, it is possible for a personal representative to avoid the obligation of providing any information to the heirs.  But as a practical matter, I rarely see a Will waive an executor’s obligation to report to the heirs, and I never see heirs waive the same.  The language of a waiver in a Will is almost always restricted to the court filing requirement and is either silent with respect to the beneficiaries or expressly states that, while no court filing is necessary, a report must be made to the beneficiaries.  Alternatively, a Will simply may incorporate the powers stated in O.C.G.A. § 53-12-261, which include the power “to serve without making and filing inventory and appraisement, without filing any annual or other returns or reports to any court, and without giving bond; but a personal representative shall furnish to the income beneficiaries, at least annually, a statement of receipts and disbursements” (emphasis mine).

Here is the tricky part about O.C.G.A. § 53-12-261.  The italicized language above only requires a personal representative to furnish an annual statement of receipts and disbursements (i.e., annual return) but not an inventory.  Further, the return need only be furnished to income beneficiaries.  An income beneficiary is a person entitled to all income produced by an asset (or group of assets).  Income beneficiaries are typical in trusts.  However, most estate beneficiaries are simply due a one-time distribution of assets, not income.  Therefore, the language does not match to the reality very well.  Regardless, courts generally will interpret the statute to mean that the personal representatives must provide annual returns to all heirs.

The same goes for waiver by the heirs – unless every heir of an intestate estate waives in writing the administrator’s obligation to report to them, the administrator must make such reports.  I have yet to see an heir expressly waive this requirement, though heirs waive the court-filing requirement often.  Even the confusing consent form provided by the court does not waive an heir’s personal right to a return, though it tries its best to make that unclear.

The lesson here is that, if you are an heir of a testate estate, most likely the executor will be required to at least make annual reports to you despite any waivers in the Will, and if you are an heir of an intestate estate, you are due an annual report even if you have waived the court-filing obligation.  If a personal representative refuses to make a report to you voluntarily, she can be compelled to do so by a court (and ought to be required to pay the suing party’s attorney’s fees even if the report shows no wrongdoing).  In the rare scenario that a personal representative appears to have no obligation to submit an inventory or annual returns to the heirs, heirs may still be able to obtain an accounting by petitioning the court, though the heir may first have to present some evidence of wrongdoing by the personal representative and will not have a right to reimbursement of attorney’s fees if the return ordered by the court shows no wrongdoing.

If you are an heir being kept in the dark on an estate, contact me to find out how I can help you shed some light on the matter.  You can email me or call me at my Atlanta probate law firm at 404-467-8613.