Losing a loved one doesn’t only cause grief, it can also bring along a slew of new responsibilities and questions. Many people find themselves trying to figure out what’s next with their departed loved one’s estate. Court Accounting is often part of this process but can feel overwhelming, especially during a time of mourning.
Here are some important factors to consider when looking into the next phase of sorting out an estate.
Court accounting is typically used when no will exists or the decedent did not appoint an executor. If this is the case, a court accounting of the assets and liabilities of the estate must take place by a court-appointed administrator. Even if the decedent appointed an executor before his or her death, formal accounting will need to take place if beneficiaries do not agree upon the distribution of assets. The court-appointed administrator will be able to complete the same process as an executor but will have the ability to determine which assets go to each beneficiary.
What are the Reasons A Court Accounting Would be Required?
You never know when you’ll be in a position where you’ll need a court accounting. Depending on your particular circumstance, you may be the one who is asking for a court accounting or may be called to the court. There are generally three main reasons a court accounting would be required.
What Should A Court Accounting Include?
In California, an estate usually means that the decedent died without a trust or with only a will in place. Without a trust, it makes it difficult to determine how the decedent’s property should be distributed. Court accounting will be required by a California state court if the decedent has assets that are not co-owned with someone else and if the total dollar amount is over $150,000. If these circumstances apply to your situation, then you will need to go to court and get the estate probated.
In California, there are three parts of a court accounting which include the beginning inventory, all additions and subtractions and the ending inventory that can be distributed to the beneficiary.
A fiduciary is a person or organization that acts on behalf of another person. In this role, it is the fiduciary’s job to put their clients’ interests first, as they have a duty to preserve good faith and trust. If the fiduciary is accused of not following his or her duty, then he or she may decide to voluntarily file a court accounting.
How Much Does a Court Accounting Cost?
Court accounting can cost anywhere from $1,000 to $25,000 depending on how complex the case is and how many assets the deceased owned. If a person has two small bank accounts with very few deposits or expenses, it is a simple accounting, and it will be considerably less. On the other hand, if there is a case where someone had rentals, classic cars, cash accounts, brokerage accounts, and beneficiaries taking money out of the account before the trustee got a hold of the account, then the case is much more complicated. This type of case will take more time and effort to complete.
How Long Does A Court Accounting Take?
When it comes to preparing for the process of a court accounting, each case is unique and can take anywhere from weeks to years. The deadline to prepare and submit the estate’s final accounting is set by the court. The final accounting will show the beginning inventory, all additions and subtractions, and the ending inventory that can be distributed to the beneficiaries. This process can vary depending on the kind of assets attached to the estate and the availability of the documentation of those assets.
Do you have questions about Court Accounting?
Feel free to contact Marcia L. Campbell, CPA. Our team is always here to help our clients. We can help by providing guidance regarding elder care and financial choices that can be made before they are needed.
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