Topic

Estate Accounts

Personal Representatives (PRs) are responsible for collecting in estate assets, paying the estate liabilities, discharging legacies and accounting to the residuary beneficiaries for their entitlements (either under the will or on intestacy). 

This is a statutory requirement under Article 35 of the Administration of Estates (Northern Ireland) Order 1979, repeated in the Oaths for Administrators and Executors which is sworn when applying for Letters of Administration or a Grant of Probate: 

a) Collect and get in the real and personal estate of the deceased and administer it according to law; 

b) When required to do so by the Court, exhibit on oath to the Court a full inventory of the estate and when so required render an account of the administration of the estate to the Court; 

c) When required to do so by the High Court, deliver up the grant of probate or administration to that Court. 

The contents of a good set of accounts should at least comprise: 

  • Capital Account 
  • Income Account (split into tax years) 
  • Beneficiaries Account 
  • Balance Sheet 
  • Schedules in relation to share portfolios, sales etc. 

The accounts should be written in chronological order to read as a history of the administration. 

Other useful details include a history of the administration and reproduction of the Will. 

Look out for: 

  • High solicitors’ fees – you would normally expect to see between 3-5% of the gross estate as a general rule or a combination of a percentage and an hourly rate. 
  • Executors’ expenses – lay executors’ cannot claim for their time, but only out of pocket expenses. 
  • High credit card bills for elderly people resident in a nursing home for example – potential fraud. 
  • No income account when estate contains bank accounts etc. 
  • Missing assets between the original schedule of assets and liabilities and the final accounts. 
  • Inheritance Tax – is it calculated and apportioned correctly? 
  • Capital Gains Tax – why has it been accrued? 
  • Anything out of the ordinary 

ESTATE ACCOUNT CHECKLIST 

Name of Deceased ………………………………………………………………………………………………………………..

1. Gross Estate
2. Net Estate
3. Income Received during administration
4. IHT payable?
5. CGT payable?
6. Executors Expenses (and %) %
7. Solicitors Fees (and %) Before VAT %
8. Calculations correct?
9. TDC’s required?
10. Pecuniary Legacies correct?
11. Missing beneficiaries
12. Total Legacy to our charity
13. Outstanding Amount
14. Additional Comments
15. Retention
16. Legacy for
17. Added Value

Arithmetic checked by ……………………………………………………………………………………………………………

Approved by                 ……………………………………………………………………………………………………………

Assets at DoD Value
742 Evergreen Terrace £ –
Springfield Bank £500.00
Springfield Building Society £1,200.00
Smile bank account £50,000.00
DuffBeer Can collection £53,000.00
Savings Bonds £50.00
Premium Bonds £5.00
Powerplant Shares £3,750.00
Arrears of state pension  £86.50
Powerplant Pension  £250.00
Grandfather clock  £200.00
Skoda car  £5,500.00
TOTAL  £114,541.50

 

Liabilities at DoD Value
Springfield Bank Credit Card £226.37
Smile car loan £3,500.00
Funeral costs £2,500.00
Wake £350.00
Memorial costs £450.00
TOTAL £7,026.37

 

Administration Expenses Value
Death Certificates £10.50
Executor’s expenses £3,400.00
Solicitors’ fees £8,301.00
Repayment of overpaid pension £340.00
Valuation fees £250.00
Stockbrockers’ commission £187.50
TOTAL £12,489.00

 

Legacies Value
DuffBeer Cans (Bart) £53,000.00
£500 from Smile A/C (Lisa) £500
£300 (Maggie) £300
£500 Trust for Dog £500
TOTAL £54,300.00

 

RESIDUE Value
Assets £108,600.00
Less
Liabilities -£7,026.37
£101,573.63
Net Estate
Less
Administration expenses -£12,489.00
Legacies -£54,300.00
RESIDUE TO LEGACY OFFICERS’ BENEVOLENT FUND  £34,784.63