Fiduciary accounting for estates

A dedicated estate ledger, opened under the estate's own EIN and kept apart from the decedent's personal accounts and from the executor's own finances. Every asset received into the estate is logged with the date received and the value assigned, whether that value comes from a bank statement, a brokerage confirmation, or a formal appraisal. Income the estate's assets earn during administration, interest, dividends, rental income, and business income if the decedent's business continues operating, is tracked by category. Administration expenses, funeral costs, professional fees, and property carrying costs are tracked the same way. Distributions to beneficiaries, whether specific bequests, percentage shares, or court-approved interim distributions, are recorded against the ledger as they happen, not reconstructed later. What is not included: valuing the assets ourselves, deciding how the estate should be distributed, or filing anything with the probate court. Those stay with the executor, the appraiser, and the estate's attorney; we hand over books that make each of those jobs faster.

We start once the estate is opened and an EIN is in hand, or we help the executor get one, and set up a ledger structure before the first transaction happens. Each month, or more often in the early weeks when most of the asset transfers happen, we log what came in, record what went out, and reconcile the estate's own bank and brokerage accounts to their statements. Anything ambiguous, a deposit with no clear source, a bill that might be personal rather than the estate's, goes back to the executor as a short question rather than getting guessed at. As the estate approaches closing, we tie the ledger to whatever the executor needs next: a court-format accounting, a final distribution schedule, or the workpapers for Form 1041 if the estate had income during the year.

Executors and personal representatives who are personally exposed if the estate's books are wrong, whether that is a family member serving as executor for the first time or a professional fiduciary running several estates at once. It also fits an estate attorney who wants a clean set of books behind the accounting they file with the court, without doing the bookkeeping in-house. We work equally well for a small estate that closes in under a year and a larger estate that stays open for several years while real estate sells or litigation resolves.

Estate funds mixed into the executor's own bank account because a separate account was never opened, which forces a reconstruction of every transaction by date and source before real bookkeeping can start. Assets logged at the wrong value, most often a house carried at its original purchase price instead of its date-of-death value, which throws off both the accounting and the beneficiaries' eventual cost basis. Income earned before death mixed with income the estate earns after death, which misstates both the decedent's final personal return and the estate's own return. Distributions made informally, a check written to a beneficiary with no record of which bequest it satisfied, which leaves the executor unable to prove the estate was distributed correctly if anyone later asks.

We keep most estates on QuickBooks Online or Xero, set up with a chart of accounts built for fiduciary activity rather than a business, so assets, income, expenses and distributions each have their own clear category. For estates with a large number of assets or a court that requires a specific inventory format, we also work in Excel or dedicated estate-accounting tools like EstateWorks. Bank and brokerage statements come in directly through account connections where the institution supports it, and manually where it does not, since many estate accounts are opened and closed within a single year and never get a live feed set up.

Fiduciary accounting for an estate is scoped once we see the number of accounts, the number of beneficiaries, and roughly how long the estate is expected to stay open, since a straightforward estate that closes in six months and a multi-year estate with real estate and a small business are very different amounts of work. Pricing is confirmed in writing before work starts and referenced against the published rate card rather than quoted fresh here.

Every account the estate holds is reconciled to its own statement each period, not just reviewed for reasonableness, so the ledger's ending balance always ties to what the bank or brokerage actually shows. A senior reviewer checks the ledger before anything goes to the executor, and any correction to a prior entry is written down rather than made silently. The test we hold ourselves to is simple: could this ledger stand up in front of a probate judge or a skeptical beneficiary's attorney without a rebuild.

Most estates start within a few days of the executor getting the EIN and opening the estate's bank account, since that is the point where transactions start needing a home. We ask for the death certificate, letters of administration or letters testamentary, and access to the estate's own accounts once opened; we do not need or ask for the decedent's personal financial history beyond what identifies the assets coming into the estate. Ongoing entries happen on a schedule that matches how active the estate is, weekly in the first month or two when most asset transfers occur, then monthly once things settle into administration.