Grant & Barrow, A Professional Law Corporation
Grant & Barrow, A Professional Law Corporation

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Are you prepared for estate accounting?

On Behalf of | Feb 10, 2022 | Succession planning |

Overseeing succession as an estate administrator can be an honorable, albeit stressful responsibility. After all, you’re tasked with ensuring that a deceased individual’s assets are properly distributed and that his or her wishes for the estate and his or her loved ones come into reality. And it’s rarely as easy as simply following a set of instructions that are written on a piece of paper. Instead, you’ll have to know your responsibilities under the law and how to successfully fulfill them.

What you should know about estate accounting

One aspect of succession that sometimes causes problems is estate accounting. Once you’re prepared to close out the estate, you’ll need to document all of the actions that you’ve taken, including specifying which assets have been distributed, which creditors have been paid, how much you’ve paid yourself, which assets remain undistributed, and how those undistributed assets will be used.

The accounting documentation will need to be submitted to the probate court for final approval before you can be released as the estate administrator. Why does that matter? It matters because beneficiaries of the estate have the right to examine the accounting and raise any objections if they believe that you’ve failed to fulfill your responsibilities as a fiduciary. If a court agrees that you’ve strayed from your duties, then you could be found liable and therefore responsible for any losses that the estate has suffered.

Therefore, it’s in your best interests to ensure that the accounting is accurate and thorough. Keep in mind, too, that a beneficiary may request an accounting at any point in the succession process, not just once the estate is ready to be closed. So, it’s important that you remain organized and detail-oriented throughout the process.

What, specifically, should be in the accounting?

As we mentioned, the accounting has to be thorough and complete. Here are some of the items that should be contained in your accounting:

  • The assets that were in the estate when you took over as administrator, which should be based on the value at the time of the decedent’s death
  • Any increased or decreased value of those assets during the course of succession
  • Any income paid to the estate
  • Expenses related to the funeral and burial
  • Expenses tied to the succession process
  • Distributions that have been made, including the date the disbursement was made, to whom it was made, and the amount
  • Any debts paid out of the estate
  • Any remaining debts
  • Any legal fees that have been incurred
  • Proposed distributions for remaining assets
  • Any assets that have been identified as future reserves

Remember, the purpose of this final accounting is to give the court and any named beneficiaries the opportunity to scrutinize the succession process to ensure that it was handled properly. So, if you think that there are issues in regard to any of these accounting items, then you may want to discuss them with an experienced attorney who can help you formulate a way to make corrections and ensure that the accounting, while accurate, also protects you from allegations of wrongdoing.

Seek help for your succession needs

We know that the estate administration process can be more complicated than it seems. But it’s not a process that you have to try to navigate on your own. In fact, doing so could prove dangerous. That’s why experienced law firms like ours stand ready to assist you in this endeavor. If you’d like to learn more about succession and what you can do to protect your interests, then please continue to browse our website to learn more.