Virginia Beach, VA
ph: (757) 961-5087
fax: (757) 228-3928
What Exactly is Required of Me if I Am Tasked With Preparing an Accounting for an Estate, Trust, Conservatorship, or Guardianship???
If you are not an estate/trust attorney or a professional fiduciary, you may not know what is required of you if you are expectedly or unexpectedly named as an Executor, Administrator, Trustee, Conservator, or Guardian. Even if you do not owe a duty to provide an accounting to the court, you likely still owe a duty to provide an accounting to the beneficiaries. The following is an outline of your responsiblity as it pertains to the Accounting requirements.
Executors and administrators of decedents' estates in Virginia, as well as those appointed as conservators or guardians, are required to account for all assets over which they are given responsibility. Executors and administrators of estates (differing in name only due to whether they were named as such in the will...from hereon to be simply referred to as executors), conservators, and guardians, are placed in a position of trust by the very nature of their appointment as such. A duty is owed to the beneficiaries, conservatees, and minors, to protect the assets of the estate. The responsibility of accounting for these assets falls on the named or appointed individual, and that individual must provide an accurate and timely accounting report to be approved by the court. Even if the accounting need not be presented to and approved by the court, there are likely beneficiaries to whom you owe the duty to keep complete and accurate financial records of the assets for which you now have responsibility.
In Virginia, the executor of a decedent's estate must file an inventory and then annual accountings with the Commissioner of Accounts for the court where the personal representative is qualified.
COMMISSIONER OF ACCOUNTS
Executors and administrators of decedents' estates are required by Virginia law to file an inventory to identify the assets of the estate and accountings to detail the distribution and disbursements of those assets. Inventories and accountings are audited to confirm that the estate has been handled in accordance with the law and the wishes of the decedent, if there is a will, and to protect the interests of creditors and beneficiaries of the estate.
The Commissioner of Accounts is appointed by the judges of the various circuit courts across Virginia. Estate inventories and accountings are filed with the Commissioner of Accounts in the jurisdiction where the personal representative qualifies. The Commissioner reviews, audits, and approves the inventories and accountings.
After an executor obtains qualification, a primary responsibility is to identify all of the assets of the estate and take possession and control (otherwise known as "marshalling") of those assets. This step is crucial because this inventory will provide the opening balances for the accountings that the executor is required to perform. (Although the term "executor" is being used, these steps also pertain to trustees, conservators, and guardians.)
Within 4 months of qualification, the executor must file an inventory of the estate's assets with the Commissioner of Accounts. The clerk of court provides a set of instructions for completing the inventory. The inventory must be timely filed with the Commissioner of Accounts.
An executor in the state of Virginia must file the first accounting with the Commissioner of Accounts within 16 months after obtaining qualification.
Accountings must be complete, and supported by documentation for each receipt and disbursement. All receipts, including but not limited to rents, rebates, refunds, social security income, net income from a trade or business, interest income, royalties, and family trust distributions, must be accounted for. All disbursements including but not limited to payment of administrative expenses, mortgage payments, insurance payments, medical expenses, taxes, property maintenance, and loan payments, must be supported by an appropriate receipt, canceled check, and/or signed contract. Bank and brokerage account statements are also used to verify balances and gains and losses on investments. A proper accounting will take property on hand at the beginning of the accounting period, and along with additional property received during the accounting period, income and principal received during the accounting period, gains on sales or other dispositions, and net income from a trade or business...will reconcile that to the disbursements made, losses on sales or other dispositions, net losses from a trade or business, distributions made to beneficiaries, and property remaining on hand at the end of the accounting period
Although the accounting is within 16 months of qualification, the accounting must state all money and other property which the personal representative has received, or become charged with, or has disbursed within 12 months from the date of qualification. In other words, the accounting period reported on is for a 12 month period, but the executor has an additional 4 month window in which to prepare and file the accounting.
Accountings must be timely filed with the Commissioner of Accounts.
Please contact Estate Accounting Solutions at (757) 961-5087 to discuss how we can help you accomplish the responsiblities explained above.