Understanding Estate Accounts

As an executor, you're responsible for keeping proper accounts of the estate. This is one of the final steps in the process of dealing with someone's death. This isn't optional - you must be able to show beneficiaries exactly what came in and went out.

Why estate accounts matter

Good record-keeping protects you as executor:

• Beneficiaries can see the estate has been handled properly
• HMRC may ask to see accounts
• If anyone challenges the administration, you have proof
• It helps you track what's been done and what's still needed

What to include

Assets (what came in)

• Property sale proceeds
• Bank account balances
• Investment values
• Sale of personal possessions
• Money owed to the deceased
• Life insurance payouts (if payable to estate)
• Income received (rent, dividends, interest)

Liabilities (what went out)

• Funeral costs
• Debts and bills
• Inheritance tax
• Probate fees
• Professional fees (solicitors, accountants)
• Estate agent fees
• Property maintenance costs
• Your executor expenses
• Legacies paid out

Format of accounts

Estate accounts don't need to follow a set format, but should clearly show:

1. Opening position - all assets and liabilities at death
2. Movements - money coming in and going out
3. Closing position - what's left to distribute
4. Distribution - who received what

Practical tips

• Open a separate bank account for the estate
• Keep all receipts and paperwork
• Use a spreadsheet to track everything
• Note the date of every transaction
• Get receipts when you distribute assets to beneficiaries

When to finalise accounts

Don't rush to finalise accounts. Wait until you're certain all liabilities have been paid. If you distribute everything and then a creditor appears, you could be personally liable. Most estates can be finalised within a year, but complex estates may take longer.