The Role of the Commissioner of Accounts in Virginia Estate and Trust Administration

People typically picture the probate process going something like this: a person dies, you find their will, you take the will to the courthouse, the executor pays the debts, and then the executor distributes the assets.   Of course, the process is much more complicated and time-consuming than that.  Moreover, there are also multiple people involved in the process of administering an estate or testamentary trust.  One of these critical people is the Commissioner of Accounts.

If you are serving, or have served, as the executor or administrator of an estate in Virginia, you will no doubt have been in contact with the office of the Commissioner of Accounts (the “Commissioner”).  You will also come to know the Commissioner’s office if you are trustee of a testamentary trust domiciled in Virginia (and provided the trust does not waive accounting requirements) or conservator over a Virginia resident’s estate.

But what exactly is a Commissioner?  A semi-judge?  A court employee?  A non-judicial governmental employee?  A lawyer?  An accountant?

The office of the Commissioner is unique to Virginia and West Virginia.  The Commissioner is typically a local lawyer experienced in estate administration.  The Commissioner’s role is primarily defined by statute, specifically the Virginia Code.  Frustratingly, although the Commissioner’s office has been in existence for many years, there is little case law defining the role of the Commissioner in Virginia.  In a recent court case, Gray v. Binder, the Virginia Supreme Court shed some additional light on the role of the Commissioner in Virginia.

As the Gray opinion explains, Virginia circuit courts possess jurisdiction over fiduciary matters, including estate and trust administration.  However, circuit courts cannot practically oversee and handle every aspect of estate and trust administration.  As a result, Virginia created the office of the Commissioner to settle and oversee the distribution of estates in a prompt and efficient manner.  The Commissioner’s office came into being from the well-established role of the Commissioner of Chancery (an officer appointed by a circuit court to assist in the performance of the court’s duties in equitable matters).  Think of the Commissioner as doing the groundwork in a case to save the court time and resources.  While the Commissioner has authority to assist the circuit court, the Commissioner does not usurp the circuit court’s power.

In Gray, the language of a will was at issue.  Gray claimed that his step-grandfather’s will, in part, created a trust with Gray as the beneficiary.  The operative provision of the will provided that the step-grandfather would leave a portion of his estate to his step-daughter with the “desire that she use it for the education of [Gray].”  Unsure of the legal implications of those words, the administrator of the estate wrote to the Commissioner of Fairfax County and asked if he would hear the issues of will interpretation and heir determination.  The Commissioner agreed to hear the issues and scheduled a hearing.  The Commissioner conducted an evidentiary hearing at which Gray appeared with his lawyer.

After hearing the evidence, the Commissioner drafted his report.  He found against Gray and determined that the intestacy scheme governed the estate (whereby the estate would be divided amongst relatives pursuant to Virginia’s statute for when people die without wills).   The Commissioner did not think that the will created a trust with Gray as the beneficiary, and believed that even if it did, the trust’s purpose was achieved because Gray had already completed his education.  Gray filed an exception to the Commissioner’s report with the Fairfax County Circuit Court (the “Trial Court”).  The Trial Court entered an order confirming the Commissioner’s report.  Gray filed a motion to reconsider (a motion asking the Trial Court to take another look at an issue).  The Trial Court entered an order stating that Gray took nothing under the will, and that the Commissioner properly interpreted the law and facts of the case.

Later the Commissioner filed a routine debts and demands report with the Trial Court, which stated that the estate administrator could pay out the remainder of the estate to the beneficiaries.  Gray again filed an exception to the report, stating that the Commissioner exceeded his jurisdiction as to his first report interpreting the will.  The Trial Court, by order, again affirmed the Commissioner’s authority and conclusion.

On appeal, the Virginia Supreme Court (the “Court”) had to decide whether the Commissioner exceeded his authority.  The Court pointed out that the Commissioner is appointed by the circuit court and is removable at the circuit court’s pleasure.  The Court also highlighted that if the Commissioner files a report with the circuit court, it becomes the opinion of the circuit court if no exceptions are filed.  The circuit court may accept or reject the Commissioner’s report, either in whole or in part.  The Court also made clear that the Commissioner exists to assist the circuit court with the settlement of estates.  The Commissioner’s work is an extension of the circuit court’s jurisdiction over the same.  The Court rejected Gray’s request that it review the contents of the Commissioner’s report.  Specifically, the Court stated that it has no authority to review reports of commissioners of accounts, rather, it is limited to reviewing some judgments of circuit courts and the Court of Appeals.  Ultimately, the Court affirmed the Trial Court’s decision.

The Commissioner is an instrumental person in estate litigation and the administration of estates, conservatorships, and even some trusts.  A Commissioner’s interpretation of or decision regarding a trust, estate, or will may have a tremendous effect on a circuit court’s ultimate decision on the issue.  For this reason, it is crucial to consider retaining experienced counsel in one’s dealings with the Commissioner.

Moreover, fiduciaries have specific and serious duties under Virginia law, both by statute and common law.  Failure to comply with these duties, including the timely filing of inventories and accountings, can lead to the Commissioner requesting the issuance of a rule to show cause.  A rule to show cause is a court order commanding the fiduciary to appear before the circuit court to explain why he or she should not be held in contempt for failure to comply with their statutory or fiduciary duties.  Failure to comply with a fiduciary’s statutory or fiduciary duties can have serious adverse effects, including being removed from one’s fiduciary role or even being held in contempt of court.

For these reasons, if you are facing a hearing or a dispute with a Commissioner, you should contact an experienced estate litigation attorney.

 

 

Brett Herbert

About: Brett Herbert

Brett Herbert is an associate attorney in the firm’s Williamsburg office. He is a member of the firm’s Estate and Trust Litigation practice area team. He devotes his practice primarily to disputes involving wills, trusts, guardianships, conservatorships, powers of attorney, and elder law matters. View all posts by Brett Herbert
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