Informal settlement of a fiduciary’s account has long been the preferred method for wrapping up a fiduciary’s service. And for good reason. From the beneficiary’s perspective, they receive their funds more quickly and at a lower cost than through a formal judicial accounting. The fiduciary avoids the distraction and spotlight of a court proceeding and receives a release from the beneficiary. Moreover, if done right, the fiduciary obtains an indemnification agreement from its beneficiary, something that they wouldn’t receive in a judicial accounting.
Agreements between a fiduciary and beneficiary are typically carefully scrutinized, with all ambiguities resolved in favor of the beneficiary. Why? Because such agreements are considered a fo…