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Our experience gives us a unique perspective on the challenges associated with fiduciary accounting. We have answered some common questions we get from clients. Contact us for further assistance. We look forward to serving you.

What is fiduciary accounting?
A fiduciary accounting really is “just” information of a financial nature presented in a particular (and very specific) format.
Per Ernst & Young’s US Fiduciary/Trust & Estate Accounting Services Senior Manager:
“In brief
  • A fiduciary accounting (sometimes called a “court accounting”) is a comprehensive report of the activity within a trust, estate, guardianship or conservatorship during a specific period.
  • It shows all the receipts and disbursements managed by the executor, trustee, guardian or conservator (the fiduciary), properly allocating all transactions between principal and income.
  • These accountings are regulated by their governing instruments and state law.”
  • A fiduciary accounting must include all of the assets of the trust, estate, guardianship or conservatorship, and must “balance” – to the penny!

A fiduciary accounting may be required by the Probate Court (Conservatorship, Guardianship, Estate, court-supervised trust,..) or may be required to be sent to a beneficiary of a trust (there may be an income beneficiary and/or a residuary beneficiary).

What is the process? How do I get started?

It’s easy to start – give us a call, or send an email, and we’ll talk about what you need, etc.

What information and documentation do I need to provide to start an accounting?

First thing would be a memo thumbnail sketch of the situation; name of the matter, with beginning date (a date of death? a date of appointment?) and ending date. Inventory & appraisal(s) if it’s a court matter or otherwise has I&As involved. Background court docs if it is or was a court matter can be useful. A copy of a trust (if it’s a trust matter (and names of co-trustees if there are co-trustees)) can help. List of beneficiaries, and beneficiary distributions (or specific distributions per a Will) made (if any have been made) with names can help too. Creditors’ claims paid is useful information. And if non-cash items have been distributed then document detailing agreed-upon distributions and distribution-values can be important.

Typically we need a list of all assets to be included in the accounting – bank accounts, investment accounts, real property (with “appropriate” valuations), tangible personal property (cars, jewelry, clothing, household furniture & furnishings, etc….) (again with “appropriate” valuations) (though for the last two (real property, “TPP”) “valuation to be determined” is ok too if that works for the purposes of the accounting), annuities, receivables, etc. etc.

We typically need all statements on all accounts (bank, investment, property management, life insurance, annuities,…) covering the accounting period – statements covering the beginning date, statements covering the ending date, and all in between. (though sometimes accounts generate quarterly statements only – we can look at what the client has and help guide them to what’s needed). Sometimes CD accounts do not generate statements but generate renewal notices upon renewal only – in that case bank printouts (signed by someone at the bank if that is needed/appropriate) with clear valuations can be important in lieu of statements.

Often if an investment account is involved the client can get (from the broker (Merrill, UBS, Wells Fargo Advisors, First Republic Securities, Ameritrade, etc..)) an official beginning-date (date of death for example) detail of the assets in the account with beginning-date itemized (and total) valuations.

We also need registers (handwritten, Quicken/QuickBooks, Excel, ..) for all accounts (unless an account is interest only and all “transactions” are reflected on the statements) – registers should detail deposits (date deposited, who from and what for) and disbursements (date written, who to, and what for (for taxes (property, and income, and Estate,..) – what type of tax, what year related to for example are important). If more than one property is involved then receipts and disbursements should clearly note property address. And if multi-unit buildings are involved then receipts and disbursements should further note unit/apt. number.

If any real property has been sold we need Seller’s Final Closing Statement.

A list of liabilities at the end of the accounting period can be important to add to an accounting – amounts owed for taxes, amounts owed for mortgages (by property), home equity lines of credit, amounts owed to a personal representative (for costs advanced), amounts owed to professionals (attorney, accountant, appraiser, ….) not yet paid, amounts owed to beneficiaries, etc….

That’s basically it, but once we receive materials we can guide a client on what might be missing, etc.

How can I give you my documents?

Many clients scan/email materials (statements, registers, ..) to us. Others send hard copy materials to us via USPS, FexEx, UPS, messenger, etc. Others use secure file storage to allow us access to materials online. We haven’t had an Amazon Robot or drone delivery yet but I’m sure that’s not far off. But I tell clients “whatever’s easier for them” works for us.

How long do you keep my documents and accounting(s)?

We keep documents for a reasonable time (say a month or two) after completing the accounting to enable us to address any immediate questions that may arise. After that (or before) we’ll send your original materials back to you. If you email materials to us, or send materials to us via secure file storage, that we’ve printed, we’ll ask you if you would like those materials back or if you’d prefer that we securely shred them.

We tend to keep accountings “forever.” They don’t take up much space on hard drives. So if you need a copy in a year or so’s time, or you come back to us in a year or two for the next accounting, we’ll likely still have that accounting (or those prior accountings). The “only” caveat to that would be in the event of a catastrophic computer crash for example.

How long does an accounting take?

It can be very tough to estimate how long an accounting will take to complete. First it depends on level of activity, time period to be covered, whether all the materials are available, and what level of “open items” become apparent as we progress through the accounting. And of course a possible date of completion depends on our own workflow in terms of when we can make a start on a particular client’s project once we’ve received all the materials.

How much does an accounting cost?

That’s a question we often get. Unfortunately it’s very tough to answer. The devil’s always in the details. Accountings can be very detailed and, depending on the assets that need accounting for, can be very time consuming. It’s also possible that a client feels that because they haven’t done anything with, say, a particular investment account, there’s nothing to account for, but there can be a lot of transactions (purchases, sales, dividends, reinvestments) going on behind the scenes that need to be accounted for. But if we can get a sense of what’s to be accounted for, level of activity etc., we can often give a rough sense.

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