To understand what Commissioners of Accounts in Virginia do, it is useful to start with a short history lesson. In the early-1800s, the procedure used to settle estates and other fiduciary accounts in the Commonwealth was haphazard, at best. As the Supreme Court of Virginia later recounted in a 1908 case, Carter's Administrator v. Skillman, the "commissioners" appointed to supervise fiduciaries in those early days were often just friends and neighbors, with "no knowledge of the principles on which accounts should be stated, and no disposition to scrutinize them very closely." Because they usually just rubber-stamped whatever a fiduciary did, litigation often ensued.
To solve that problem, the General Assembly established the office of the Commissioner of Accounts in 1849. Since then, the circuit court in each jurisdiction in Virginia has appointed at least one attorney-at-law to serve as Commissioner of Accounts. The Commissioner of Accounts has the authority to supervise certain fiduciaries and ensure that they are properly fulfilling their duties.
The office of the Commissioner of Accounts is unique to Virginia and West Virginia. As such, despite the important role it plays, it is not commonly understood. In this post, we explore: (1) the different types of fiduciaries Commissioners of Accounts supervise; (2) a few of the most common functions Commissioners of Accounts serve; and (3) ongoing questions about the extent of what a Commissioner of Accounts can do.
What Types of Fiduciaries Does a Commissioner of Accounts Supervise?
Under Virginia law, Commissioners of Accounts are vested with the authority to supervise "all fiduciaries admitted to qualifying in the court or before the clerk of the circuit court." Those fiduciaries include:
- Executors, administrators, and curators of decedent's estates;
- Trustees of testamentary trusts (i.e., trusts created by a decedent's will);
- Trustees under deeds of trust (including those foreclosing on real estate);
- Court-appointed guardians for minors;
- Conservators of incapacitated persons' estates; and
- Fiduciaries appointed for incarcerated persons (referred to as "committees").
Notably, Commissioners of Accounts do not have jurisdiction over trustees of "trusts under the agreement." When a person establishes a trust through a document separate from their will, Virginia law does not require that the trustee of the trust qualify before a court or clerk. That is true even if the trust contemplates what happens to the person's property after their death. Accordingly, trustees of trusts under the agreement are not subject to the supervision of Commissioners of Accounts.
What Does a Commissioner of Accounts Do?
The most basic function of a Commissioner of Accounts is to review and approve (or refuse to approve, require revisions to, etc.) inventories and accounts filed by fiduciaries under their supervision. Virginia law requires that fiduciaries file accounts with the Commissioner of Accounts at regular intervals. It is the Commissioner of Accounts' job to review a fiduciary's accounting and ensure that they are doing what they are supposed to do, for the protection of both beneficiaries and creditors. If a fiduciary fails to file a timely inventory or account, the Commissioner of Accounts may take action against them. Usually, that begins with a letter reminding the fiduciary of their duties, but for seriously delinquent fiduciaries, it can ultimately result in a referral to the circuit court and proceedings to determine whether the fiduciary should be held in contempt.
The accounting process usually proceeds without controversy. However, Virginia law allows interested persons to initiate an adversarial proceeding before the Commissioner of Accounts by objecting to a fiduciary's account or insisting that something be done. When that happens, the Commissioner of Accounts will usually conduct a hearing to address the interested party's concerns.
When a Commissioner of Accounts is finished reviewing a fiduciary's account, he must report the account to the circuit court and provide notice of that filing to certain interested parties. Those parties then have 15 days to file "exceptions" to the Commissioner's report, in which case the circuit court will review the matter. If no exceptions are filed within the 15-day period, the Commissioner's report is automatically confirmed.
Virginia law also gives Commissioners of Accounts authority to conduct other adversarial proceedings. For example, Commissioners of Accounts may hear evidence of debts and demands claimed by creditors against a decedent's estate. Commissioners of Accounts may also conduct proceedings to determine whether a fiduciary's bond is adequate or whether a fiduciary should be removed because of their incapacity or misconduct.
What Are the Limits of a Commissioner of Accounts' Authority?
Although Commissioners of Accounts have general authority to supervise fiduciaries and settle accounts, their authority is not unlimited, and they do not have the final say on fiduciary matters. Their actions are subject to review by the circuit court for the jurisdiction in which they serve. Thus, in a case decided last year, Henderson v. Cook, the Supreme Court of Virginia held that a circuit court erred by delegating final approval of a fiduciary's accounting to a Commissioner of Accounts.
That said, open questions remain about what authority Commissioners of Accounts have as an initial matter. For example, it is well established that, upon request, circuit courts may offer aid and guidance to executors and administrators in interpreting a decedent's will. But can a Commissioner of Accounts do that? That was the question raised in Gray v. Binder, a case decided by the Supreme Court of Virginia in 2017. Unfortunately, for procedural reasons, the Court declined to answer it. As Justice McCollough's concurrence notes, however, the answer will depend on whether the statutes relating to Commissioners of Accounts are interpreted broadly or narrowly.
Hire Our Virginia Estate Dispute Attorneys to Represent You Before the Commissioner of Accounts
Compared to being in court, proceedings before a Commissioner of Accounts can seem relatively informal. However, an adversarial proceeding before a Commissioner of Accounts should not be taken lightly. Although a Commissioner of Accounts doesn't have the final say, circuit courts in Virginia afford enormous deference to a Commissioner's factual findings.
Accordingly, if you are involved in an estate or other fiduciary dispute before a Commissioner of Accounts, you should hire an experienced estate dispute attorney to represent you. At The Mottley Law Firm, we have a wealth of experience representing fiduciaries, beneficiaries, and creditors in adversarial proceedings before Commissioners of Accounts. Don't hesitate. Call us today.