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Accounting Requirements

What is an Accounting?

An Accounting is a record of all property that the Personal Representative gathers into the estate and pays out of the estate. The Personal Representative must prepare an Accounting before closing a probate. The Accounting should be detailed enough to identify the type and value of property gathered by the Personal Representative and the date, amount and purpose for all property that the Personal Representative paid or transferred out of the estate. It should also include what property (if any) is left in the estate.

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What kind of records should I keep during the probate?

When the court appoints you as Personal Representative, one of the first things you should do is open an estate bank account. When you close accounts owned by the person who died and collect cash for the estate, you should try to deposit all funds into this account. You should use only the estate bank account to pay probate costs and (if there are enough funds) Allowances, creditor claims and distributions. When it is time to prepare the Accounting, the check register of the estate bank account will be a good starting point.

You should also keep careful records of the following:

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How do I prepare an Accounting?

The Accounting must be complete and detailed enough to track all of the estate's property, income, expenses and distributions. One way to organize the Accounting is to use the following categories:

Property taken into the estate:

Property paid out of the estate:

Property remaining in the estate:

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What if there is not enough money in the estate to pay or distribute personal property to everyone in full?

If the estate does not have enough money to pay Allowances and Exempt Property, creditor claims and distributions, it is a good idea to make sure that all payments are sorted by priority on the Accounting. This way, the court and interested persons can see that you paid everything in the right order.

Below is the order in which you should make payments from the estate:

Type of Payment
Order (Priority)
Allowances and Exempt Property Homestead Allowance

 

Family Allowance

 

Exempt Property
Creditor claims Secured claims (if creditor takes only the property)

 

Probate costs

 

Funeral costs

 

Debts and taxes with certain priority under federal law
Past due child support

 

Medical and hospital costs of last illness

 

Debts and taxes with certain priority under state law

 

All other claims
Distributions in Intestacy (no Will) Each person in a class shares equally
Distributions under a Will As the Will says or if not:

 

Specific gifts of property

 

General gifts of property

 

Remainder under the Will

 

Property left out of the Will

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Can I hire someone to prepare the Accounting?

Yes. You can hire a bookkeeping or accounting service to keep track of income and expenses and to prepare the Accounting. Unless it is complicated, the Personal Representative can usually prepare the Accounting himself or herself. If you need a bookkeeping or accounting service, you can ask a certified public accountant for a referral, search the internet for local services or look in the yellow pages of the telephone book. You should balance the cost of paying someone to prepare the Accounting with how complex the probate is you are handling.

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What do I do with the Accounting?

If you are closing the estate using a Sworn Statement of Personal Representative, you must send the Accounting to all persons who received distributions and are affected by it before filing the Statement. If you are closing the estate formally, you should file the Accounting with the court before the final hearing and send a copy to all interested persons who are affected by it.

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Can the Accounting be waived?

Yes. The Personal Representative does not need to prepare an Accounting if each interested person who is affected by it signs a statement saying that he or she waives his or her right to an Accounting. This can be done as part of a Receipt and Release when the probate is closed. It can be expensive and time-consuming to prepare an Accounting. Where there are a small number of affected persons who trust the Personal Representative, they often waive the right to an Accounting to save money and close the probate faster. The Personal Representative should file all signed waivers with the probate court when closing the estate.

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Rev. 3 July 2013
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