When someone passes away without setting up a trust or only has a will, it is sometimes difficult to determine how their property will be distributed. In California, court accounting is required by the state if the decedent’s estate falls under either of these conditions: assets are not co-owned with another person or if the total dollar value of assets exceeds $150,000. Get more information about what a court accounting is, when you might need it, and what’s included.
What is a Court Accounting?
In short, a court accounting is an accounting of the assets and liabilities of an estate. There are two ways the deceased’s estate can be settled: informal or formal court accountings. The first is a court accounting performed by the executor, while the latter could be completed by a court-appointed administrator or trustee.
Related Article: What is the Difference Between Informal and Formal Court Accountings
When Would I Need a Court Accounting?
A court accounting typically occurs when there is no will or the deceased does not select an executor. If an executor is chosen, it is their responsibility to perform the accounting. If the decedent appointed an executor and beneficiaries disagree with that person on the distribution of assets or any other transactions, a formal court accounting will take place instead.
In the state of California, executors are required to complete a court account each year. Get more information about court accounting.
Related Article: What are the Responsibilities of a Professional Fiduciary?
What are the Steps Involved in a Court Accounting?
In the state of California, there are three components of a court accounting. They are the beginning inventory, the additions and subtractions of assets, and the ending inventory. Learn more about each below.
- Take beginning inventory: Take an inventory of the estate assets at the time of death.
- Record receipts and disbursements: Keep track of gains and losses.
- Distribute remaining estate assets: Once court-approved, assets are distributed.
Get more information about each component in our previous court accounting blog, detailing each part individually including descriptions and clarification on what’s expected. If you need court accounting in California, the team at Marcia L. Campbell, CPA is always ready to help and provide guidance.
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As the most experienced CPA in the Inland Empire who specializes in working with seniors, Marcia L. Campbell is committed to helping each client thrive by caring for their personal and financial wellbeing with genuine interest, well-established expertise, and a focus on respectful partnerships. Marcia’s team specializes in a number of services including elder & financial care, court & trust accountings as well as private fiduciary and tax services. At Marcia L. Campbell, CPA, we understand the importance of our clients’ individual needs and are committed to helping them make the best personal and financial decisions for their future.