Accounting for an Estate

An accounting is one of the final steps in administering an estate. It is the final reconciliation of all assets in the estate, all expenses of the estate, and any interim distributions. A formal accounting is filed with the court. An informal accounting may be done as well and is presented to the beneficiaries as a summary of the administration of the estate. Pennsylvania and New Jersey accept the national standard form for filing of accounting. The accounting should list all the items that were received into the estate. This may be separated into categories such as real estate, cash accounts, personal property, bonds, mutual funds, etc.

The accounting will indicate if there have been any gains, losses or other disposition of property received into the estate since the estate was opened through the time of the accounting. Any distributions of the estate would be listed such as personal debts of the decedent paid from the estate, funeral expenses, administration expenses and legal fees, where applicable. Finally, the accounting will state the balance of the estate after disbursements. This is the amount available for distribution to the beneficiaries presuming the accounting is accepted. It is important for the executor or administrator to keep detailed records while handling the estate to make sure the final accounting can be accurately prepared.

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Inventory for an Estate

An inventory of probate assets will need to be filed with the court in the process of probating the will. The first step for the executor or administrator is to gather information on what assets exist. For real estate, ownership should be confirmed first via review of deed or a title search. If the home is not promptly sold, it should be appraised to obtain an accurate value. Be sure to inventory the contents of the home as well. This is particularly important if the will provides for specific bequests of personal property such as jewelry, collections or automobiles. For bank accounts and securities, statements should be obtained from the financial institution or broker.

For retirement-type accounts, a good place to start is with the prior employer if documentation cannot be found otherwise. Same rule applies for life insurance policies as they may have been offered as a benefit of employment as well. You will need documentation to support the date of death values for all probate assets. The inventory should be filed within nine (9) months of the death of the decedent. An inventory provides useful in preparing the inheritance tax return which is also due within nine (9) months. Finally, the inventory comes in handy in closing out the estate and preparing an accounting if necessary.

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Putative Father Registry

A putative father is a man whose legal relationship to a child has not yet been established. This may occur in a situation where the Mother of a child is not married and she alleges someone as the father or the man believes he is the father. Pennsylvania maintains a registry of putative fathers for the purpose of giving a man in such a position notice prior to any termination proceedings. Unmarried parties can agree to execute an acknowledgement of paternity to confirm the legal relationship. This acknowledgment is then submitted to the Department of Vital Records to update the birth records. If the parties are not agreeable to execute the acknowledgement, the alternative course of action is to file a petition for genetic testing.

Both parents will be ordered to participate in genetic testing. Failure to appear by the father can result in a court order declaring him as the father by default. Failure to appear by the mother can result in the court dismissing an action for support. Tests results alone are not sufficient to establish paternity. Instead, the parties must stipulate in writing that the test results prove paternity or the court must make an order on paternity after reviewing the test results. Once there is an order on paternity, at that point Vital Records can be contacted regarding updating their records. Additionally, any actions for support or custody of the child can proceed.

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Pension Valuations

Pensions are often one of the assets up for division in a divorce. The marital portion of a pension plan may be divided amongst the parties. The marital portion of a plan would be the portion that accrued from the date of marriage through the date of separation. In some cases, the entire pension will be marital depending on the timing of the marriage alongside the start date of the pension plan. The marital portion will also include investment experience on the marital portion that accrues post-separation. It will not include contributions by the employee made post-separation. Parties can divide the marital portion of the plan by way of percentage or fixed dollar amount.

It is useful to get a pension valuation completed to identify the lump sum marital value of a pension. This can be particularly useful if the intent of the parties is to offset the value of the pension with other assets. For example, if Husband has a pension worth $200,000 and Wife wants to keep the house with equity of $200,000, the parties may agree Husband keeps the entire pension and Wife keeps the house as an equitable distribution. To arrive at the lump sum value of the marital portion of a pension, a coverture fraction calculation needs to be completed to account for the total years of marriage in the context of the total years of contribution to the plan applied to the total benefit available. The valuation also accounts for interest and mortality factors to arrive at the present value. An expert can be retained to complete this valuation.

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