Executor & Trustee Accounting
When someone is appointed as the executer of an estate, they are responsible for making sure it is managed properly while the assets work through the process of administration. They will also have to make a listing of all the assets within an estate, get their value determined, collect income from any income-producing assets, pay expenses of the estate, distribute assets to the intended beneficiaries or fund the trusts and make sure everything is distributed according to the wishes of the deceased. This process can often take months, or even longer, to complete. During this time, the executor will need to do things like keep up with the maintenance of property, pay bills (including taxes) and much more. The expenses associated with this process will be paid from the estate itself.
Executor or trustee has to keep track of all the money they spend during this process so that they can show that they aren’t misusing the funds of the estate. Beneficiaries of the estate can request that you provide an accounting of your acts and proceedings as fiduciary (executor or trustee), and the courts can also demand to see one, so it is important to make sure you are keeping track of everything properly.
Preparing Accounting Information
When you are performing regular tasks associated with being an executor of estate, you must track as much information as possible. There are specific forms that you can use to help ensure you have all the information that may be needed based on the specific types of things that you are doing. While the term accounting seems to imply that this is a financial task (which it is, at least in part), it encompasses more than that. As part of this process, you should track things like:
Assets collected – part of your most fundamental duty as executor is to collect and marshal the assets of the decedent;
Sold Items – It is often necessary to sell off certain items in the estate to generate cash for distributing to beneficiaries, or to cover expenses or taxes. Tracking information about each sale including the amount, to whom it was sold, and more will be required.
Collecting income – dividends, rents, interest. You have to keep track of everything that was collected during the administration period.
Investments – If there are investments as part of the estate, they will need to be managed. Any changes you make to them will need to be tracked.
Upkeep – If you do any type of upkeep to the estate, such as painting the walls, it needs to be tracked.
Insurance – you have to makes sure that the property of the estate or trust is adequately insured; the expense of the insurance is covered by the estate or the trust.
To put it simply, anything that you do on behalf of the estate should be kept track of so that it can be provided to those who ask about it. Just keep in mind, as an executor the estate is not yours, but rather you are just responsible for it until it can be properly distributed.
You won’t always have to provide a judicial-style accounting of everything that was done as executor. In many cases, a more informal process is followed. This could just require you to provide general information about what you did as the executor, and as long as the beneficiaries accept this, it will be sufficient. Having the rest of the information available, however, will be helpful should someone demand a full accounting. Keeping track of annual and monthly statements, income tax returns; sale receipts, etc. is crucial. We can help with every stage of estate administration to make sure that nothing gets lost and every receipt is properly allocated.
Keeping an Executor or Trustee Accountable
If you are a beneficiary of an estate, you should always be willing to ask for an accounting of the estate. It is well within your rights to keep up to date with what is being done, and why. If the executor is reluctant to share information with you, simply requesting the courts to require this information is a fairly simple process and will help to ensure there isn’t anything questionable going on. We can help you with this process, should it be necessary.
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