Executor Accounting Spreadsheet - PDF by grf16143

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									         OFFICE OF COMMISSIONER OF ACCOUNTS
                   CIRCUIT COURT OF ROCKINGHAM COUNTY
                                        SUITE 206
                                 57 SOUTH MAIN STREET
                             HARRISONBURG, VIRGINIA 22801
                                TELEPHONE (540) 434-7306
                             FAX (866) 636-0807 (TOLL FREE)
                          WEB SITE: WWW.ROCKINGHAMCA.INFO
                          E MAIL: COMMISSIONER@COURTSQ.COM
                                    BY APPOINTMENT
 




November 10, 2008


Dear Executor/Administrator:

You have undertaken serious responsibilities by consenting to administer the estate of a decedent.
Our office is charged with the responsibility of supervising your stewardship. We cannot offer you
legal representation, but we can answer your questions about how the probate system works. IT IS
IMPORTANT THAT YOU CALL FOR AN APPOINTMENT BEFORE COMING IN.

You will see that if you KEEP ACCURATE RECORDS and PAY ATTENTION TO
DEADLINES, your task will be made much easier. READ THE TWO PAGES OF MATERIAL
ON DEADLINES FIRST.

Your resources include:

         The enclosed material
         Your lawyer or accountant (or both)
         Our office, BY APPOINTMENT
         Our web site: www.RockinghamCA.info
         Our introductory seminar, held at 3 p.m. on the fourth Monday of each month and
       lasts about an hour and a quarter. It is free; just reserve a seat by calling Mary Fitzpatrick.

Sincerely yours,


David J. Hatmaker
Commissioner of Accounts

Mary A. Fitzpatrick
Auditor
        OFFICE OF COMMISSIONER OF ACCOUNTS
                CIRCUIT COURT OF ROCKINGHAM COUNTY
                                      SUITE 206
                               57 SOUTH MAIN STREET
                           HARRISONBURG, VIRGINIA 22801
                              TELEPHONE (540) 434-7306
                           FAX (866) 636-0807 (TOLL FREE)
                        WEB SITE: WWW.ROCKINGHAMCA.INFO
                        E MAIL: COMMISSIONER@COURTSQ.COM
                                  BY APPOINTMENT
 



        READ THIS FIRST !!!!!!
DEADLINES FOR FILINGS:
Inventory:    Decedent’s Estate, Conservatorship and Minor Guardianship: Inventory is
              due 4 months after qualification

              Testamentary Trust: Inventory is due 4 months after trust is     funded

First Accounting:

              Decedent’s Estate: 12 month accounting period from date of qualification;
              Accounting is due 4 months after period ends*

              Conservatorship: 4 month accounting period from date of qualification;
              Accounting is due 2 months after period ends

               Minor Guardianship: 4 month accounting period from date of
       qualification; Accounting is due 2 months after period ends

              Testamentary Trust: 12 month accounting period from date trust is
              funded; Accounting is due 4 months after period ends

Subsequent Accountings:

             All: Accountings for accounting year are due 4 months after       end of
       accounting year, unless estate is wound up earlier*

PENALTIES: Penalties and court fines are assessed for violating deadlines and must be
paid out of Fiduciary’s personal funds



* If all of the fiduciaries are also all of the residuary beneficiaries, a STATEMENT IN
LIEU OF SETTLEMENT OF ACCOUNT may be filed instead of a full accounting.
                                     EXAMPLES

DCEDENT’S ESTATE:

Able qualifies as Executor of Dick’s estate on March 24, 2008. Able’s Inventory is due in the Office
of the Commissioner of Accounts by close of business July 24, 2008 (or, if a Saturday or Sunday,
then the next business day). Able’s first annual accounting will cover the period March 24, 2008 to
March 24, 2009 and is due July 24, 2009. If the estate is fully administered early, a first and final
accounting may be filed any time after 6 months following qualification (that is, September 24,
2008).

CONSERVATORSHIP AND MINOR GUARDIANSHIP:

Martha, age 95, is found to be incapable of looking after her affairs, and so the Court enters an
Order appointing granddaughter Lucy as her Conservator. Lucy qualifies before the Clerk of Court
on June 3, 2008. Her Inventory is due in the Commissioner of Accounts’ office by October 3, 2008.
Her first accounting will cover the period June 3, 2008 to October 3, 2008 and must be filed by
December 3, 2008. Her next accounting will cover the period October 3, 2008 to October 3, 2009
and will be due February 3, 2010.

Similarly, George, age 5, receives an insurance settlement of $100,000.00, but the insurance company
requires the appointment of a minor guardian (since George would spend it all on bubble gum). His
mother Frances qualifies as Guardian before the Clerk of Court on September 7, 2008. Her
Inventory is due January 7, 2009. Her first accounting, for the period September 7, 2008 to January
7, 2009, is due March 7, 2009. Her next accounting will cover the period January 7, 2009 to January
7, 2010 and will be due May 7, 2010.

TESTAMENTARY TRUST:

Dick’s Will (see DECEDENT’S ESTATE, above) sets aside a million dollars for a trust for the
benefit of Rascal, his nephew, who has shown unmistakable signs of immaturity. The trust provides
for income payments to Rascal until Rascal reaches age 40, at which time the trust will end and
Rascal will receive the entire bundle. Able was named as Trustee of this trust and he qualified as
such on March 24, 2008, at the same time he qualified as Executor. The estate must be administered
before the Trust can receive its money, and so it is not until February 2, 2009 that the trust is
funded. Able, Trustee, must file his Inventory by June 2, 2009. He must file his first annual
accounting, for the period February 2, 2009 to February 2, 2010, by June 2, 2010.
                       MEMORANDUM
       TO EACH EXECUTOR OR ADMINISTRATOR
             OF A DECEDENT’S ESTATE

                      TABLE OF CONTENTS



I.     INTRODUCTION

II.    INITIAL PROCEDURES AT THE COURTHOUSE

III.   DUTIES OF EXECUTOR OR ADMINISTRATOR

IV.    THE INVENTORY

V.     THE ACCOUNTING

VI.    ALTERNATIVE TO ACCOUNTING(S)

VII. UNKNOWN CREDITORS AND DISPUTED CLAIMS

VIII. FEES FOR EXECUTORS AND ADMINISTRATORS

IX.    PENALTIES FOR NONCOMPLANCE

X.     FORMS

XI.    RECORD-KEEPING FOR ESTATES



                    --------------------0--------------------
I. INTRODUCTION
The Clerk of the Circuit Court has entered an order appointing you as Executor or Administrator*
of the Estate of a Decedent. You qualified by making oath to well and truly administer the estate
and by giving bond as required. You are now a fiduciary, charged with the highest duty of care the
law requires of any person, over the assets of your ward.

The Commissioner of Accounts is the person designated under law to supervise your work as
fiduciary. These instructions are general in nature and are not intended to completely set out the
law. We encourage you to seek the advice of a lawyer or an accountant, as appropriate. Reasonable
charges for their advice are properly expenses of the estate. It is far easier to avoid errors altogether
than it is to have to try to find a way to correct them later.


II. INITIAL PROCEDURES AT THE COURTHOUSE

        A. Notice and Affidavit. A fiduciary must give written Notice of his qualification to each of
the Decedent’s closest relatives and/or beneficiaries named in the Will, which must be mailed or
given to each such person within 30 days after qualification. An interested person may waive notice.
Having given the required Notices (or if you fall within an exception to the Notice requirement),
you should fill out and sign the Affidavit before a notary public or a clerk of the court, and return it
to the Clerk’s Office. This document informs the Court that you have complied with all notice-
giving requirements. These forms are included with these Instructions. THE COMMISSIONER
OF ACCOUNTS CANNOT APPROVE YOUR INVENTORY UNLESS YOU HAVE FILED
THIS AFFIDAVIT.

        B. Recording fees and taxes. At the time you qualify as fiduciary, you must give an estimate
of the value of all of the assets the Decedent died owning. The Clerk will assess a probate tax, based
on the value of the assets reported either then or later. Other standard fees will be payable to the
Clerk of Court and to the Commissioner of Accounts when you make filings of Inventories and
Accountings.

        C. Bond and Surety. You must be “bonded,” that is, you must give an assurance that you
will be personally liable to persons interested if assets are lost because of your mis-handling of the
estate. “Surety” is the pledging of money or assets to guarantee your faithful performance.
Sometimes the law waives the formality of corporate surety, in which case you pledge your assets
generally for your faithful performance. Sometimes you must have corporate surety in the form of a
bonding (insurance) company’s formal guarantee.




* The term Executor is used if the fiduciary’s authority is derived from a will. An Administrator is a fiduciary who qualifies
when there is no will. But: an Administrator c.t.a. is a fiduciary who replaces an executor.
III. DUTIES OF EXECUTOR OR ADMINISTRATOR
        A. Separate accounts. Immediately open a separate checking and, if appropriate, a separate
brokerage account, for all of your estate’s funds. You may not borrow from the estate’s funds or
mix the Decedent’s assets with your own or anyone else’s assets. Make sure you choose a bank that
returns cancelled checks or provides a photocopy of the front of the check and a monthly bank
statement. (See Va. Code §26-17.9(c)). Near the end of your administration, there will be a month
or more when the balance in the estate checking account will be very small but not zero. Inform
your bank of this and make arrangements for service charges to be waived for that period.

        B. Tax Identification Number. Obtain and fill out a Federal SS-4 form and send it to the
Internal Revenue Service. They will issue you a tax identification number (EIN) for the estate,
which you will use on tax returns and give to banks and investment firms. You can obtain an EIN
on line at www.irs.gov.

        C. Assets v. Debts. Once you have located and taken control of all of the Decedent’s assets,
estimate as best you can the amount of the Decedent’s debts, including funeral expenses, medical
bills and all other debts, taxes and expenses of administration that you will need to pay out. If you
don’t have enough assets to pay out the above, immediately contact an attorney who regularly
practices probate law. Your estate is probably “insolvent” – which, like bankruptcy, involves an
extremely complicated set of rules about which creditors get paid, how much and in what order. IF
YOU BELIEVE YOUR ESTATE MIGHT BE INSOLVENT, DO NOT PAY OUT OR
DELIVER ANY ASSETS OR MONEY OF THE ESTATE TO ANYONE UNTIL RECEIVING
PROFESSIONAL ADVICE.

       D. Notice. As required by Virginia Code §64.1-122.1, you are notified that: “As an
executor or administrator of an estate, you are charged with the responsibility of filing any
income, inheritance or estate tax returns required by state or federal law and an accounting
of your handling of the estate.”

         E. Record Keeping: You should keep a ledger or computer spreadsheet, listing all receipts,
including the date received, the payor, what it was for and amount. Similarly, you should list all of
your disbursements for expenses and distributions to your beneficiaries, by date paid, payee, what it
was for and amount. In this packet of material is a page entitled RECORD KEEPING FOR
ESTATES, which you will find to be a useful guide. Keep and preserve your paperwork: receipts,
bills, deposit slips, memos, bank statements, cancelled checks, investment reports and any other
significant material. If real estate is sold by the estate, keep all of those records separately.
        F. Real Estate. Your power and authority over Decedent’s real estate must be sorted out.
An attorney’s advice on this matter is important to obtain. Generally speaking, you have three
different possibilities concerning the real estate:

       First: if the Decedent owned the property with another person “with right of survivorship,”
the ownership of the property passes to the surviving co-owner under the “survivorship” clause of
the deed. It bypasses the estate, and you have no responsibility for it at all.

         Second: If the Decedent owned real estate individually but had no will, its ownership passed
directly by operation of law to Decedent’s beneficiaries as determined by law, but with the condition
that creditors may require the real estate to be sold to pay debts if necessary. Otherwise, you have
no responsibility for the real estate, and you should not spend the estate’s money to maintain the
real estate.

        Third, the will may contain language specifying the disposition of real estate. It can direct
that the real estate be sold, in which case, you must sell it according to the terms of the will. Or, the
will might give you the power but not the direction to sell real estate. That power may be contained in
a reference in the will to Virginia Code §64.1-57, or it may be spelled out in detail. If you are given
the discretion to sell the real estate and wish to do so, we strongly suggest you consult with the
Office of the Commissioner of Accounts first.


IV. THE INVENTORY

        Within four months from the date you qualify as fiduciary, you are obligated to file an
Inventory with the Commissioner of Accounts. An Inventory form is included with these
Instructions, and you may make as many copies as you need. A sample Inventory is also included.
The Inventory is a list of all the property or any interest therein, which the Decedent died owning,
and its value as of the date of death.

         Referring to the top of the first page, the “court” is the Circuit Court for the County of
Rockingham, and the “Court File #” has been noted on your receipt, on the front of your copy of
the will or on the accounting form you have been given. If you can’t find it, just leave it off.

        Part 1. Should show a list of the personal property, including tangibles, bank accounts,
stocks and bonds, CD’s and all other property except real estate owned by your Decedent and under
your supervision and control. Do not include survivorship bank or investment accounts here.

        Part 2. Should describe all bank or credit union accounts, both savings and checking, and
CD’s that your Decedent owned with survivorship with another person. Keep in mind that you
generally do not administer these accounts; they are the property of the surviving co-owner. But
creditors of the estate have the right to know what survivorship accounts there were, because a
Virginia statute permits creditors to require that they be used to pay Decedent’s debts if necessary.

        Part 3. Should describe any Virginia real estate owned by your Decedent (but not
survivorship property) over which you have the power of sale. You can describe this real estate as it
is described on the real estate tax bill. Whether you have the power of sale will depend on the grant
of your authority by the Court. If you are in doubt, consult counsel.
       Part 4. Describes any other Virginia real estate, that is, any real estate in Virginia owned by
your Decedent over which you do not have the power of sale.

       Part 5. Describes any real estate outside of Virginia owned by your Decedent.

     All fiduciaries must sign the Inventory, list their addresses and date it. IF YOU CHANGE
YOUR ADDRESS, IMMEDIATELY NOTIFY THE COMMISSIONER OF ACCOUNTS
OFFICE.

        When you are ready to file the Inventory, call the Office of Commissioner of Accounts to
ascertain what checks you need to attach.


V. THE ACCOUNTING
        Unless you fall within the exception described in VI. ALTERNATIVE TO
ACCOUNTING(S), You must file an Account for Decedent’s Estate within sixteen (16) months
from your qualification. A form Accounting and a Sample Accounting are included with these
Instructions.

       The first (and perhaps the only) accounting you file covers the twelve (12) month period
beginning with your qualification. For each twelve-month period thereafter during which the estate
has not yet been closed, you must submit an annual accounting. For example, if you qualified as
Executor on April 15, 2002, the first accounting for the period April 15, 2002 through April 14,
2003 will be due at the Commissioner of Accounts’ office by August 15, 2003. If this is not a final
accounting, a subsequent accounting for the period April 15, 2003 through April 14, 2004 (or
through the final date of activity in the estate) will be due by August 15, 2004.

        At the top of the first page, insert the “Court File #.” The Circuit Court in which you
qualified is the Circuit Court of Rockingham County.

          The Account Summary is the heart of the accounting. You will attach to this paper various
lists of items comprising the various Lines.

        Line 1.: In the first accounting, Beginning Assets should be the taken from the Inventory. In
subsequent accountings, Beginning Assets should be the same number as Assets on Hand at the end
of your previous accounting.

       Line 2.: Show Receipts from all sources.

      Line 3: Show Gains on Asset Sales including gains from the sale of real estate, stock (net of
commissions), or any other assets.

       Line 4: Adjustments mean increases or decreases in the value of assets to keep pace with the
market. This category can be used for other adjustments, too, but see your Commissioner of
Accounts first.
        Line 5: Totals Lines 1 though 4. Line 5 must equal Line 10 when you finish the accounting.

      Line 6: Disbursements include expenses of maintaining the estate, such as the bond
premium, court costs and commissions, and your Decedent’s debts.

        Line 7: Losses on Asset Sales is just like Gains above, but here you’re reporting losses.

        Line 8: Distributions to Beneficiaries are payments or delivery of assets to those who have
inherited from Decedent. Distributions may be money or property.

        Line 9: If your accounting is not a final accounting, you will be holding assets at the end of
the reporting period. List them here. You can list them at the carrying value, rather than the market
value, but if you do, you must list the market value below as shown. If you want to adjust the value
of your assets annually to keep the accounting abreast of the current market value, you should use
Adjustments (Line 4.)

        For all money or property that leaves the estate, the Commissioner’s office must have a
voucher, that is, written proof that the recipient actually received money or property of a certain
amount or value. This can take the form of a cancelled check or a simple written receipt. If your
bank provides only a copy of the front of the check, you should also submit a copy of your monthly
bank statement showing the check being negotiated. You should also submit originals or copies of
your monthly investment account statement, your CD’s and any other supporting material requested
by the Commissioner.


VI. ALTERNATIVE TO ACCOUNTING(S)
         You will not need to file an accounting if all of the fiduciaries are also all of the residuary
beneficiaries of the estate. Two common examples: if wife is the executor of husband’s estate and
she is also his sole residuary beneficiary, she need not file an Accounting. Similarly, if Decedent had
two children who are their father’s sole residuary beneficiaries and they both qualified as executors,
they need not file an Accounting. But: if a surviving spouse is executor and is also the trustee of a
living trust that is the residuary beneficiary under husband’s will, she must file an Accounting. Call
the Commissioner of Accounts’ office if you have questions about this.

         If you are not required to file an Accounting, you must instead file a STATEMENT IN
LIEU OF SETTLEMENT OF ACCOUNT FOR DECDENT’S ESTATE, a form that is included
with these Instructions. You certify under oath that all of the estate’s creditors and taxes have been
paid, all specific bequests have been paid over and delivered, and the fiduciary(ies) have distributed
the balance to themselves as beneficiaries.

         If the STATEMENT IN LIEU cannot be filed within sixteen months of qualification, you
must file with the Commissioner “. . . either (i) an interim account or (ii) a written notice under oath
that the personal representatives intend to file a statement in lieu of the settlement of accounts when
all requisites of this section have been met, which shall include an explanation of why such a
statement cannot presently be filed. Second and subsequent interim accounts or notices of intent to
file shall be filed annually until the statement in lieu of the settlement of accounts is filed.” Virginia
Code §26-20.1B. Our office can give you a sample of the affidavit you need to file.
VII. UNKNOWN CREDITORS AND DISPUTED CLAIMS
       If you contest a creditor’s claim, you can bring suit to have the matter adjudicated, or you
may ask the Commissioner of Accounts for a hearing. You should not leave any such matter
unresolved.

        If you fail to pay a creditor, but wind up the estate and file a final accounting, are you
personally liable to that creditor? You should consult counsel on that question. The procedure to
avoid such personal liability is for the Commissioner of Accounts to conduct a Debts and Demands
hearing and for you then to have the Circuit Court enter an Order of Distribution setting out how
the estate is to be distributed.


VIII. COMMISSIONS AND FEES
        Your commissions and the audit and recording fees charged by the Commissioner of
Accounts and the Clerk of Court are both set by the Virginia Supreme Court. You may find these
schedules on-line at www.RockinghamCA.info, or you may call the Commissioner of Accounts
office.


IX. PENALTIES FOR NONCOMPLANCE
         The Supreme Court of Virginia, through the Judicial Council, sets penalties for non-
compliance with deadlines and work quality. The Judicial Council provides for the assessment of a
fine if you receive a “late letter”. If you do not respond to your Commissioner’s “late letter,” you
should expect to be summoned to his office by a sheriff. If you do not comply with that summons,
you will be summoned to Circuit Court and be subject to the penalties imposed by the judge.
Additionally, you may be denied your commissions. Penalties, fees and fines must be paid out of
your own funds.


X. FORMS

The following forms are available by clicking the TITLE below:

       NOTICE – You must send this to all Interested Persons listed in Va. Code §64.1-122.2

       WAIVER OF NOTICE – Any Interested Person can sign this form, waiving the above
       NOTICE

       FFIDAVIT OF NOTICE – As soon as you send out the NOTICES, file this Affidavit
       with the Clerk of Court. It tells him that you have sent the NOTICES. He will send the
       Commissioner of Accounts a copy. The Commissioner of Accounts cannot approve
       your Inventory until this AFFIDAVIT has been filed with the Clerk.

       INVENTORY FOR DECEDENT’S ESTATE – File this with the Commissioner of
       Accounts. It tells the world what assets you are administering
        ACCOUNT FOR DECEDENT’S ESTATE – Tells the world what you’ve done with the
        assets

        STATEMENT IN LIEU OF SETTLEMENT OF ACCOUNT – Use this instead of
        ACCOUNT FOR DECEDENT’S ESTATE if all of the residuary beneficiaries of the
        estate qualified as Executors/Administrators.

        SAMPLE FORMS – Dummy forms to show you how a form should look when filled out
        properly


XI. RECORD KEEPING FOR ESTATES
         Good record keeping is the secret to a trouble-free estate accounting. It isn’t hard to do, but the
information must be recorded when the transaction takes place, otherwise you will have to put it together
later like a particularly nasty jigsaw puzzle. If you have a computer, use the spreadsheet program or
Quicken or a similar bookkeeping program. If you don’t know how, get your 10 year old granddaughter
to help you.

The information you need to record a Receipt, Disbursement or Distribution is:

The transaction DATE
The NAME of the person or entity who paid it in or who got the money or property
WHAT the transaction was for
The AMOUNT or value of the transaction

Examples are:

For a Receipt:

        6/8/05 Sonny Jurgenson Enterprises -- Dividend                             $5,603.00

For a Disbursement:

       3/5/04 Hopeless Funeral Home -- Funeral Expenses                            $5,693.23

For a Distribution to a Beneficiary:

       12/3/05 Bernice Nieceburn -- 1/5 share of Residuary Estate                 $77,404.22

       12/3/05 Richard Strauss -- Windsor Chair per ARTICLE III of Will            $4,000.00

IMPORTANT: Keep all of the Receipts in one list, all of the Disbursements in another list and all of the
Distributions in its own list. Arrange them chronologically. These lists will be attached to the front page
of the Accounting. Neatness counts: if you’re not using a computer or typewriter, please print.
The Commissioner of Accounts (or the Assistant Commissioner) will require you to show VOUCHERS
to back up Disbursements and Distributions.

VOUCHERS may be

       Cancelled checks
       Bank statements with pictures of cancelled checks
       Receipts

A Receipt can be very simple:

       “Received of the estate of Darnell Whipple one Windsor chair valued at
       $4,000.00. (Signed) Richard Strauss”

       will do the trick nicely.

								
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