Surcharge

What it means

An objection to an accounting is a procedure. A surcharge is the remedy at the end of it: an order that the executor make good, out of their own money, what the estate lost.

The word rarely appears on a court form. It is what a sustained objection is usually asking for, and it is the reason an objection needs a loss attached to it rather than only a transaction somebody disliked.

Some states borrow the standard rather than writing one — Arizona and Florida both hold a personal representative to the same duty, and the same liability, as a trustee of an express trust. California writes the remedy out: loss with interest, profit the representative made through the breach with interest, and profit the estate would have made but for the breach.

Why it matters

It is what makes an accounting worth reading. Without it, an objection has nowhere to go.

It reaches situations where the estate's balance never fell — an executor who bought estate property cheaply, or held an asset that should have been sold, can still be surcharged for the profit.

It is not automatic once a mistake is shown. California lets a court excuse a representative who acted reasonably and in good faith on the circumstances as they knew them, which is where most contested accountings are actually decided.

When you are likely to meet it

• When an accounting shows money leaving the estate for something you do not recognize.
• When an asset in the inventory does not appear in any later schedule.
• When a lawyer describes what you would be asking the court to order.

How this varies by state

Whether the standard is written out or borrowed from trust law, and whether a good-faith excuse exists, is set by state law.

Related terms

• Compelled accountA court order that makes a fiduciary produce the books, obtained by somebody with an interest in the estate.
• Estate accountingA statement of everything that came into the estate and everything that went out, presented before the estate can be closed.
• ExecutorThe person named in a will to carry it out — once a court actually appoints them.
• Extraordinary servicesWork by an executor or estate lawyer beyond routine administration, paid for on top of the ordinary fee.
• Fiduciary dutyThe obligation to act for somebody else's benefit rather than your own — and to be able to show you did.
• IndemnityA promise to make good somebody else's loss — and on several small-estate forms, the price of the shortcut.
• Interested personAnybody the law says has a stake in an estate — an heir, a beneficiary, a creditor, sometimes a fiduciary. It decides who gets told and who may object.
• Personal representativeThe neutral term for whoever is authorized to act for an estate, whether named in a will or appointed by a court.
• Petition for dischargeThe filing that asks a court to release the executor and close the estate — and that starts your deadline to object.
• Special proceedingA court case built to be decided quickly, used where waiting for an ordinary lawsuit would defeat the point.
• Waiver of accountingA signed document giving up your right to a formal account of what the executor did with the estate.

Sahvelo guidance that uses this

• The final accounting