As an accounting major in college, I quickly learned all of the complicated parts of the accounting cycle. I discovered how to input the details of business transactions into a computerized accounting system. At the end of an accounting cycle, such as a month, I became experienced with calculating the revenue for the period. If you’re starting a new business, determining an accurate amount of revenue for each accounting cycle is crucial. You must know how much profit you’re making each accounting period in order to be successful in the long-term. On this blog, you will discover how an experienced accountant can help you keep track of your revenue.
Being an estate executor is a big responsibility. Although it's not for everyone, it is an excellent way to honor your deceased loved one and protect the interests of heirs (which may include yourself). One of the biggest responsibilities that the executor will have is to handle the accounting of the estate. If you're not sure how to go about this project, you may need professional assistance.
Why is this part of the job so important to get right? Here are some of the many reasons.
1. You Report to the Court. Executors and personal representatives are generally overseen by the probate court. This court has established rules you must follow to report assets, value them, disclose transactions, and make a final accounting for distribution. You want to go before the court with numbers you feel confident in.
2. Heirs Can Object. The court isn't the only one who has a right to know what's going on with the estate accounting. Heirs, potential heirs, and even creditors are involved in this process. They can raise objections, motions, and adversary proceedings if they have reason to believe anything fraudulent, inappropriate, or incorrect is being done with estate assets.
3. You Must Keep Proof. Probate court requires an accounting at several steps along the way, but you generally don't have to list every single transaction. However, you'll need this proof in case the court asks for any additional information or an objection is raised. Keeping track of individual transactions is difficult for most laypersons, but an accountant can help you set up a good system.
4. It's Public Record. The probate process is a matter of public record. This places an additional onus on the executor because any of their activities can be part of that public record. Not only will those outside the circle of heirs and family members have access to information, but it will also be permanently available in most jurisdictions and unalterable.
5. Everyone Relies on You. Finally, everyone who has a stake in the estate is counting on you to do a good job for them. You'll establish the estate's value, pay its bills, decide on correct expenses, and determine how to distribute what's left. It's your job to look out for the interests of heirs by ensuring the best accuracy possible.
Where to Start
Not sure how to approach the accounting for an estate you're in charge of? Begin by meeting with an accountant who offers estate administration services in your state today.
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