Have You Been Named Probate Executor? Brush Up Your Bookkeeping Skills

Elise sat in her kitchen staring at a huge, meaningless pile of bills, bank statements, outstanding invoices and cancelled checks. She had always been close to her dad, but right now she was furious at him for dying and making her the Executor of his estate in his Will. Elise was a musician with an MFA, not an accountant. She was nearly 50 and had never so much as balanced her own checkbook. She was not irresponsible, just not equipped to deal with this kind of challenge.

She finally called her friend Joe, a bookkeeper. Joe arrived, looked at the sea of bills and quickly agreed that her dad’s records were a mess. He’d never recorded checks, and some of the invoices were three years old.

Joe helped Elise create a plan that started with getting methodical and organized

• Create a pile of all the bills and invoices.
• Look for receipts, cancelled checks or other verification that a bill has been paid, such as bank statements, and create another pile.
• Keep a separate pile for anything that’s going to affect a credit balance–checks that might have been received or automatic deposits that were made to an account.
• Create a spreadsheet. List all of the bills found; match them with cancelled checks and receipts.
• If you can’t find something, first check bank statements. If nothing is there, call the company that sent the invoice and ask if the bill has been paid.
• If it has been paid, request a receipt. If it hasn’t, create a separate spreadsheet category for unpaid bills or outstanding debt and note the amount.

Key responsibility of the Executor: Accounting for assets and liabilities

To those who are not used to keeping careful financial records, this may seem like a lot of work, and it is. But until the assets and liabilities have been accounted for, Probate cannot move forward. It is important to document every step taken to verify liabilities and assets. It is also important to document the liquidation of assets to either pay bills or divide the estate among the heirs. This will include the cost of an appraiser who will estimate the value of any property that needs to be sold, then recording the sale.

• Invest in financial software. A spreadsheet is fine; Excel will do the math for you.
• Focus on the numbers. Check and recheck the numbers—they need to balance.
• Match every number to a source document. It is much easier to locate an error if every entry is matched to a source document–a receipt, account statement, correspondence, bills paid or pending, and photocopies of checks and deposit slips. Note the source on the spreadsheet, file the documents and keep on hand.
• Document everything. Keep comprehensive notes on all expenses and transactions made on behalf of the estate, including dates, purpose and the exact amount. Keep receipts.

Don’t take questions or challenges personally

If the estate closes and a mistake is later discovered, those who received disbursements may be required to reimburse the court to correct a deficiency. Discovering errors before an estate closes protects the heirs and the estate. Conducting an accounting of an estate during Probate is a technical process that requires attention to detail and accuracy. When done well, Probate proceeds smoothly.

Probate is a growing service for us

If your Probate is uncontested, you don’t need an attorney, and we can assist you—all for one flat fee of $4,500. Contact California Document Preparersat one of our three Bay Area offices today to schedule an appointment. Our dedicated team is helpful, compassionate and affordable.