1. The Basics of Court
Accountings
Monica Goel
Tredway, Lumsdaine & Doyle,
LLP

2. Probate and Trust Matters
 Probate Estates
– Accountings required unless waived
– Must follow Probate Code protocols
 Trusts
– Accountings may or may not be court ordered
 If court ordered, must follow Probate Code
– Look to terms of Trust, if not court ordered
Glossary: PR means Personal
Representative (Executor or
Administrator or Trustee)

3. General Considerations
 Purpose : Allow the court to examine the record of the
estate's administration (receipts, claims and
disbursements, etc.)
 In addition, at the time of an accounting, the PR is
expected to report on the steps taken during the
administration
 Hearing will be set and noticed
– Allows interested persons opportunity to object
– Opportunity to request surcharge claims for breach of fiduciary
duties
– Court can also surcharge on its own motion

4. Types of Accountings, Required
 Final account: A final account is always required, along with a
petition for final distribution, “when the estate is in a condition to be
closed.” [Prob.C. § 10951]
 Interim accounts: Apart from the final account, the Code specifies
several instances when an “interim account” may be required:
– Whenever required by the court, on its own motion or on petition by any
interested person. [Prob.C. § 10950(a)&(b)]
 Removal From Office: Within 60 days after the PR resigns or
removed from office or authority is terminated. [Prob.C. § 10952]
 Also, when a PR dies, “absconds” or becomes incapacitated (i.e.,
lacks capacity to serve as personal representative). [Prob.C. §
10953]

5. Optional Accts & IAEA
 Optional accounts: filing of an account is deemed to include a
petition for approval of the account (Prob.C. § 1064(b))
– Hence, optional accounts may be prudent to “insulate” the PR from
liability on matters fully disclosed therein
 IAEA PRs are not offered any “shortcuts” through the normal
accounting procedures and requirements
– “Settlement of accountings” is one of the actions requiring “court
supervision” notwithstanding IAEA authority. [Prob.C. § 10501(a)(3)]
– Moreover, IAEA PRs must list and describe in accounts any IAEA
actions taken without court approval if notice of the proposed actions
was required

6. Waivers
 Probate Code expressly authorizes waiver of otherwise
required accounts — interim or final (Prob.C. § 10954)
 On written waiver, each beneficiary must file
acknowledgment or provision for satisfaction with court
– PR is not required to file an account if waived [Prob.C. §
10954(a)(1)]
– Even with waivers, PR must still file a “report” [Prob.C. §
10954(c)(1)]
 If Pour-Over Will to Trust, only trustee of Trust needs to
sign waiver [Prob.C. § 10954(b)(4)]
 Consider obtaining waivers at commencement of probate
and also when resolving probate disputes by contestants

7. Required Contents of Acctngs
 All accounts of a PR must report the various general
charges, credits and transactions in estate administration
 Prob.C. § 1060 et seq. is a comprehensive statutory
scheme that governs all accountings filed with the
probate court
– Applies guardianship, conservatorship, estate and trust
accountings submitted for court supervision and approval
 The statutory format is mandatory and, except as
otherwise specifically provided in the Code, or unless
“good cause is shown therefor,” no additional information
need be included in an account. [See Prob.C. § 1060]

8. Basic Components
 The financial statement portion of the account must indicate the period
covered and contain a “summary” showing:
– The property on hand at the beginning of the period [Prob.C. § 1061(a)(1)]
– The value of any assets received that are not assets on hand as of the
commencement of estate administration. [Prob.C. § 1061(a)(2)]
– The amount of any receipts of income or principal [Prob.C. § 1061(a)(3)]
– Net income from a trade or business [Prob.C. § 1061(a)(4)]
– Gains on sales [Prob.C. § 1061(a)(5)]
– Amount of disbursements [Prob.C. § 1061(a)(6)]
– Loss on sales [Prob.C. § 1061(a)(7)]
– Net loss from a trade or business [Prob.C. § 1061(a)(8)]
– Distributions to beneficiaries, a ward or conservatee [Prob.C. § 1061(a)(9)]
– Property on hand at the end of the accounting period [Prob.C. § 1061(a)(10)]
 “ Summary” format: The statutorily-required “summary” of the above
information must be set forth substantially in this format, exclusive of any
inapplicable categories (Prob.C. § 1061(b))
 SEE PROVIDED SAMPLES ACCOMPANYING THIS PRESENTATION

9. Attorney Perspectives
 Know that attorneys are cognizant of court
deadlines but clients don’t always cooperate
– Some are wayward; some don’t understand how to
keep records
 Always wise to file accounting and
supplement/amend later as information becomes
available
 Hearings can always be continued
 Court will issue “probate notes” regarding items
to clear
– Supplements are filed to “clear” these “probate notes”

10. Attorney Perspectives 2
 In Trust Accountings, Probate Code format not
required if not court ordered
– But Probate Code format can be desirable as this is
what attorneys know how to “read”
– Trust can contain provision that objections to
accountings must be filed in a shorten time period
 Review Prob. C. § on Accountings
– See Probate Code § 1060 et. seq. for guidance
– Summary of Account is Key
– Be simple as possible with explanations
 Sundries, interest income, property tax bill, etc.

11. Conclusion
 CPAs perform valuable role in court
supervised accountings
– Knowledge of schedules a must
– Attorneys are not CPAs and should not offer
tax advice without disclaimers
 Again, your role as CPAs is valued !
 Questions? Comments?
 Thank you for attending