The Basics of Probate Accounting

If you have been designated the personal representative for a deceased relative or friend, you need to understand the basics of how to handle the probate accounting.

Get peace of mind with a comprehensive estate plan

Trustpilot star rating bar
Woman with red cup working on a laptop in a cafe

Contents

Updated on: February 1, 2024
Read time: 4 min

If you are the administrator or executor of a probate estate for a deceased friend or relative, an important part of your duties is to provide a probate accounting to the court.

Accountant using a calculator

The exact procedure, and the specific forms used, will vary from state to state. However, the following information will help you understand the basics of probate accounting.

If all of the beneficiaries sign a form called a waiver of accounting, probate often may be concluded without an accounting. And, if you are the only beneficiary of the estate, an accounting may not be required. Some states have procedures specific to small estates, typically those with no real estate and a certain maximum estate value, where no accounting is required.

What probate accounting entails

Basically, a probate accounting is a financial record of a probate estate, which has three phases:

  1. Taking an inventory. One of your first steps is to take an inventory of the estate assets, and prepare and file an inventory form with the court. This lists all the property that is in the estate, and establishes the starting value of the estate.
  2. Keeping records. As the estate process progresses, you will need to keep records reflecting all income received and expenses paid, and all assets sold or acquired, from the date of the beginning inventory.
  3. Submitting a final accounting. After all of the debts have been paid, any property that needs to be sold has been sold, and anything remaining is distributed to the beneficiaries as required by law or the terms of the will, you will prepare and submit a final accounting to the court. The probate final accounting will show the beginning inventory, all additions and subtractions, and the ending inventory distributed to the beneficiaries.

We will now take a closer look at each of these phases.

The beginning inventory

The inventory form for your state will indicate what information needs to be included. A fair market value at the time of death needs to be determined for each asset.

The value of some items can be determined by financial statements, such as for bank accounts, stocks, and other securities. For other items, such as real estate, jewelry, or collectibles, it may be necessary to get an appraisal.

If there is money owed to the decedent that hasn't yet been received, that also will be listed on the inventory.

Recording receipts and disbursements

During the course of the estate management, funds may come in, such as from income tax refunds, interest on bank accounts, or income from any business or rental properties the decedent owned. Sometimes these will be from a lawsuit by the estate to collect money owed, or for physical or economic injury to the decedent. Some assets, such as stocks and bonds, may increase or decrease in value.

The estate's debts must be paid. Typically, the first to be paid are the funeral expenses and any medical bills for the decedent's final illness. Things such as credit card debt, mortgage and car payments, utility bills, property taxes, and home insurance and maintenance bills may also require payment. One of your duties will be to determine which claims are valid, which creditors to pay, when to pay them, and in which order. It may be necessary to sell assets in order to obtain the funds needed to pay off the debts.

To keep adequate records of all of this, one of your first steps will be to open a separate checking account for the estate. Any existing bank accounts can be closed and the funds deposited into the estate account. Any funds received should be deposited in this account, and all payments should come out of this account. You will need to keep a record of receipts and disbursements. For funds received, this should include the date, amount, and source of the funds. For disbursements, you should include the date, amount, name of the payee, and a description of what the payment was for.

Once all funds due to the estate have been received, and all legitimate debts have been paid, you will distribute the remaining assets to the beneficiaries. If there is no will, all assets are typically converted to cash, which is divided among the beneficiaries as required by state law. If there is a will, it may give specific property, or specific sums of cash, to certain beneficiaries. Once all of the assets have been properly distributed, it's time to prepare and file the final accounting for the estate.

The final accounting

The final accounting is a form filed with the court that summarizes the financial changes since the initial inventory. It won't list every transaction, although such records need to be kept, in case any questions arise.

The final accounting will list the basic information that was in the inventory, and will set forth the total amount of funds received and total disbursements, including the distribution to the beneficiaries. It also will list the sale of any assets that were listed in the inventory. If any property was sold for less than the appraised value, it may be necessary to explain the difference.

A beneficiary may file an objection to the final accounting if he or she believes it to be inaccurate, or that any transaction was improper. Also, if you fail to file the final accounting in a timely manner, a beneficiary can file a petition or complaint for an accounting.

Complete and accurate probate accounting is essential for avoiding challenges by beneficiaries, and for obtaining a final discharge of your responsibility as the estate's personal representative. A good way to avoid probate issues is to have a solid estate plan in place, for which you may want to engage an online services provider, to help ensure that your final wishes are carried out properly.

Get peace of mind with a comprehensive estate planStart my estate plan
Twitter logoFacebook logoLinkedIn logoReddit logo

This article is for informational purposes. This content is not legal advice, it is the expression of the author and has not been evaluated by LegalZoom for accuracy or changes in the law.

68 days ago
Trustpilot star rating bar

legal zoom is the way to go

The representative was very knowledgeable about how long it takes to transfer a deed from one person to the next he explained everything and he was very pleasant when speaking to him

Ross
68 days ago
Trustpilot star rating bar

I find that LegalZoom has all the…

I find that LegalZoom has all the answers if you're starting a business an LLC and incorporation or you're doing a trust or a Will. These are the people you want to trust don't go to an expensive attorney you're just throwing your money away. Legal soon gets five stars!

Sean Christopher
68 days ago
Trustpilot star rating bar

I spoke to the representative today about a Trust...

I spoke to the representative today regarding a question about an existing Living Trust. She was very helpful - told me exactly what I needed to know and how to accomplish it. As a representative in the Financial field I guide clients all the time on where to get documents done right - and its always LegalZoom - easy and effecient!

Gareth
77 days ago
Trustpilot star rating bar

We could not be more Pleased with the…

We could not be more Pleased with the help and service we had during the up dating of our Living Will and Advanced Directive

Richard Poulton
80 days ago
Trustpilot star rating bar

Legal Assistance for the rest of us

Legal Zoom has made it easy and affordable for us to create an LLC, a Will, and a Trust for our families.

K Chapman
83 days ago
Trustpilot star rating bar

pleasant and willing representatives…

pleasant and willing representatives ready to help me navigate through your system and supply attorney contact information for my legal questions for my last will & testament

Mark Impink
83 days ago
Trustpilot star rating bar

LegalZoom .com has exceptional, real, staff to help. I met one!

I purchased multiple accounts to update both our Living Wills and Estate Plans. After utilizing LegalZoom.com’s user-friendly and intuitive platform for these legal documents, I found it necessary to call for clarification on some information within our account. I spoke with Sandra Balderas, who expertly addressed the mistakes I had inadvertently made. Her professionalism and friendliness greatly enhanced the experience. I realized that LegalZoom is not only a straightforward website to navigate for such complex matters, but it also boasts exceptional employees. Thank you, LegalZoom.com, and especially Sandra Balderas, for guiding me through the process. I’m thrilled to have discovered LegalZoom.com.

Max -Phoenix, Arizona
83 days ago
Trustpilot star rating bar

Sarah was most helpful today regarding updating my estate plan

Sarah was most helpful today regarding updating my LZ docs created 3 years ago. She made sure I had all the information I needed, not just what I asked for. Thank you Sarah!

Diane Floyd
89 days ago
Trustpilot star rating bar

Quick and easy experience creating a…

Quick and easy experience creating a will package.

Kristin Steel
94 days ago
Trustpilot star rating bar

Used them past 10 years

Used them past 10 years. I needed another will and power of attorney.

MERLYN C
94 days ago
Trustpilot star rating bar

Tammy was wonderful and very…

Tammy was wonderful and very knowledgeable. It's because of her that I am going to open a living trust with legal zoom. She was great. Thank You

Erin
102 days ago
Trustpilot star rating bar

Pleasant Experience

Patience and weel given explanation about the process of how a "Living Trust" & "Deed" works after transitioning and guidance on how to contact an attorney whenever I need legal advice.

Sharron Martin
104 days ago
Trustpilot star rating bar

It was a breeze to deal with Legalzoom…

It was a breeze to deal with Legalzoom and finished my estate plan within an hour!! Thanks again

BT
108 days ago
Trustpilot star rating bar

Great team…

Mark and Legal Zoom make estate planning affordable and attainable.

Christopher Maginnis
140 days ago
Trustpilot star rating bar

Living Will & Forming my LLC

I have used Lega Zoom for several items, including my living will and items to form my LLC for my business. It's fast, easy, and thorough. The customer service is fantastic! I am working with David on a few items for my will,l and he has been a delight. He follows up when he says he will and is incredibly helpful. I highly recommend this company.

Kristen J
152 days ago
Trustpilot star rating bar

Nadia made it very easy for me to make…

Nadia made it very easy for me to make a decision to sign up and create my estate planning documents with legalsoom. She was very professional and knowledgeable about the package that I chose. She also offered her direct contact for any future questions I might have.

Melita D'Anna
161 days ago
Trustpilot star rating bar

Kylie helped me to review my history of…

Kylie helped me to review my history of trying to complete my estate plan and contacting a legal advisor that comes with my account. She was patient, knowledgable, and helpful.

Paula
165 days ago
Trustpilot star rating bar

I have worked with Mark Champ on… Last Will & Testament, Living Will, Quit Claim Deed

I have worked with Mark Champ on several documents I needed and every time he has provided me with every thing I needed and with so much graciousness and knowledge. It has always been such a pleasure working with Mark!!!!!!!!!!!!!

Cathy Donaldson
200 days ago
Trustpilot star rating bar

Most Dedicated Representative!

Patti Green was the most informative person in guiding me through the process of completing my estate plan . She was always there for me to answer my questions and give excellent advice . Also , she was very polite and considerate ! Legal Zoom is so fortunate to have Patti on their team . Thank you , Patti for all of your assistance and kindness !

Priscilla Page
278 days ago
Trustpilot star rating bar

Patti Green is GREAT!

Ms. Patti Green walked me through the Estate Planning process. She was very professional, patient and kind. Planning for when you are no longer here is very intricate and difficult. Working with Ms. Green helped give the assurance that I am doing the right thing for myself and loved ones.

TRINESSA
Rated4.6out of 5 based on23,826+ reviewson

Showing our favorite reviews