Does an Executor Have to Show the Estate’s Accounting to Beneficiaries?

An executor of a deceased person's estate typically has to show an accounting of the estate to the beneficiaries and heirs (unless the beneficiaries and heirs waive their privilege). The estate accounting is a way to prove the executor settled the estate legally and as the deceased intended.

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Why do executors need to show an accounting to beneficiaries?

There are several reasons executors have to show accounting to beneficiaries.

• Executors have a fiduciary duty to estate beneficiaries, meaning they must act in the best interests of the beneficiaries.

• Proper accounting helps keep everyone on the same page throughout the process.

• In some cases, probate courts will require an executor to show an accounting of the estate in order to finalize the probate process and properly close out the estate.

• States may also require beneficiaries to provide formal consent in order to close out an estate, and that too may require an executor to show accounting to ensure everything was properly handled .

• Even if beneficiary signoff isn’t required to close out the estate, providing an accounting can help keep beneficiaries from feeling unsure or surprised.

In some cases, the beneficiaries of an estate may object to the estate accounting. When this happens, they might petition the probate court for additional information, and a hearing may be necessary to decide if the executor has properly handled the estate.

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Rules for executors doing estate accounting

Every state has its own laws regarding the probate process, including what type of estate accounting is necessary, as well as who can see it and when . The accounting you’re required to provide to beneficiaries, heirs and the probate court may also vary based on the size and complexity of the estate. An estate planning attorney can help you understand the rules. The local probate court might also provide an online guide for executors.

Some commonly required accounting elements include:

• An itemized inventory of the estate’s assets. This includes listing each item (including property, bank accounts, investment accounts and, in some states, debts) and its estimated value. The probate court in your state may have a standard inventory form you can use.

• A list of the decedent’s additional assets — including funds and property — received after the person died.

• Expenses — including taxes, outstanding debt payments, funeral costs and potential executor payments — paid by the estate.

• Any planned and/or completed bequests or beneficiary distributions.

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What accounting documents does the executor need to keep?

The more detailed you can be with your recordkeeping, the better. To be safe, keep all supporting documentation that pertains to each asset, including:

• Check copies.

• Account and/or closing statements.

• Tax returns.

• Receipts.

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Can you hire someone to do the estate accounting for you?

Hiring someone to show estate accounting can be helpful, especially if you’re feeling overwhelmed by the process or aren’t sure where to start. Using a professional may also help alleviate any concerns the beneficiaries have about the process. Two common routes are:

Probate lawyer

These lawyers specialize in probate law and can help executors every step of the way, from finding and keeping an inventory of assets to paying off debts and distributing beneficiary assets . Probate lawyers typically charge in one of a few ways: by flat fee, by the hour or, in some states, based on a percentage of the size of the estate being handled. Hourly rates may range from $150 to $500 per hour .

Estate accountant

These specialized accountants can help you with tracking documents and handling any income and estate tax issues that may crop up. Consulting and tax preparation fees vary by state and estate complexity.

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