How to prepare an estate accounting

Every estate accounting — informal or filed — is the same machine: what you were responsible for, against what you did with it, balancing to the penny. Here’s the machine.

The structure: charges and credits

An accounting has two sides that must equal each other. Charges are everything the executor is answerable for: the inventory (property at death, valued as of that day), property discovered later, money received during administration, and gains on anything sold above its inventory value. Credits are everything that left or remains: expenses and debts paid, losses on sales, distributions to beneficiaries, and the property still on hand at the end. Total charges must equal total credits — if they don’t, the record has a hole, and finding it before beneficiaries do is the whole game.

The schedules behind the summary

The one-page summary is backed by schedules — itemized lists with dates, payees, and sources: receipts; disbursements (funeral, administration, debts, taxes); gains and losses on sales; distributions per beneficiary; and property on hand. Some states’ formats also split principal (the estate’s property) from income (what it earned while open) in separate columns — a distinction that’s nearly impossible to reconstruct later, so tag it as you go.

Informal vs. filed

Most estates settle informally: beneficiaries review the accounting and sign a waiver or release instead of anyone filing with a court. The document still matters — it’s what they’re signing off on. Court-supervised estates (or a beneficiary who won’t sign) mean a formal accounting in the state’s expected shape. Which accounting do I need? covers the fork in detail.

The working method

1. Inventory first — it’s the opening balance.
2. Record every event the day it happens, with payee/source, category, and receipt.
3. Tag principal vs. income and track your own out-of-pocket expenses separately.
4. Sales carry two numbers: proceeds and the value the item was carried at.
5. Reconcile monthly: computed balance vs. what’s actually on hand.
6. At the end, assemble the schedules, balance the summary, and have the estate’s attorney read it before anyone signs.

Tools

By hand, our free executor accounting spreadsheet has the right columns and the method. ExecutorLedger does the same job with the bookkeeping automated: guided entry, books that verify themselves continuously, and the accounting — informal and court-style — generated from the ledger. Free while you work; $149 once per estate to export.

This page explains mechanics common across US estates; states differ in format and vocabulary, and none of this is legal advice. The accounting your estate needs is a question for its attorney.