Personal Representatives in Virginia are required to file an Account for Decedent's Estate within 16 months of qualification. The probate clerk, at the appointment for qualification, should have provided the personal representative with a Qualification Packet with instructions for preparing and filing the accounting. Instructions can also be found at the following link Account for Decedent’s Estate (Instructions).
The Accounting period shall not exceed 12 months. Consequently, Virginia gives Personal Representatives 4 months to complete the Account for Decedent's estate after the Accounting period expires. An exception is Curators. Curators must file an Account for the Decedent's Estate within six months of qualification (and covering the first four months).
The Accounting should be filed with the Commissioner of Accounts for the county/city where the Personal Representative qualified. The Account for Decedent's Estate should not be filed with the Probate Clerk. The Probate Clerk and the Commissioner’s offices are separate and distinct offices. A list of Virginia Commissioner’s of Accounts can be found at the following link Commissioner of Accounts (Addresses).
Because the Instructions for completing the Accounting have been provided in the above link, this blog will not go over the instructions for completing the Accounting. Instead, this blog will provide five helpful tips for completing the Accounting.
Account for Decedent’s Estate Tip #1
One month after the close of the accounting period, request each financial institution for which the decedent’s estate has an account to send you any statement (covering the accounting period) for each account that you don’t have in your possession. In addition, if applicable, ask for copies of every transaction coming into and out of the respective decedent’s estate account. Depending on the financial institution, there may be a fee for the info.
Note: Don’t forget to get a copy of the front and back of each checks (referred to as a canceled check). The account has a document requirement for all transfers coming out of the decedent’s account. Canceled checks should be sufficient to satisfy the Commissioner’s document requirement in most cases. Without the canceled check, the personal representative will likely need other documentation to satisfy the document requirement.
Account for Decedent’s Estate Tip #2
If your inventory is inaccurate, then you will need to correct it to have your accounting turn out correctly. Like a checkbook, if your beginning balance is inaccurate, then your final balance will be inaccurate. Procedurally, the proper method for correcting the inventory is by filing an amended inventory. However, you may be able to merely note the correction as an adjustment on the Adjustment Section of the Decedent’s account. However, before doing this, you should call the Commissioner of accounts and ask for permission.
Note: If you get permission from the commissioner to avoid an amended inventory via an adjustment on the accounting, try to get the permission in written format if you can. Email is likely the best method for balancing the interests of protecting yourself and not annoying the auditor.
Account for Decedent’s Estate Tip #3
Don’t be discouraged if your accounting is off by a minimal amount and you just can’t make it work. Although it is best to have the accounting accurate to the penny, you may find that the commissioner will accept the accounting being off by a nominal amount. What is a nominal amount depends on the circumstances. Before submitting the account, you should call the Commissioner of accounts and ask for permission.
Note: The best strategy is to assure the Account for the Decedent’s Estate is accurate to the penny. Although you may get permission to file the accounting with a discrepancy. You may find that doing so can cost you money and time later. If the accounting is off, and the discrepancy is not a simple error, you may likely discover that the problem was more serious then you initially thought. Consequently, when the error is subsequently discovered, you may have to file amended accountings (which may require additional filing fees) and you might find yourself subpoenaed before the court to explain the issue.
Account for Decedent’s Estate Tip #4
Scan every document that you need for filing and administrative purposes. This includes the documentation you rely on for the accounting, inventory, bonds, distributions, taxes, ect. Although you may believe that your need for such document has expired, but you may likely find that you will need such document to address an issue later. Although you can keep such documents in hard format, electronic format can save space. Be sure to protect all the decedent’s information from electronic attack and prying eyes.
Account for Decedent’s Estate Tip #5
Don’t be afraid to call the Commissioner's office and ask questions. The Accounting instructions provide you with a limited amount of information and you will likely need more information to complete the Accounting. When questions arise, if you haven’t retained an attorney (something I highly recommend), call the Commissioner of Accounts. The Commissioner of Accounts gets a fiduciary fee for serving as the administrative arm of the Court (so make them earn their every penny).
Note: Whatever they tell you, make them confirm it in writing
If you have any questions, feel welcome to call. Although we cannot give specific legal advice to any person who is not our client, we are happy to speak with any person to help point them in the correct direction.
Consider Hiring an Attorney
If you are having difficulty, consider calling a probate attorney to help you with the Decedent’s Account. There are so many pitfalls and liabilities associated with serving as a personal representative that the entire process should be navigated with a professional. There are processes and procedures for reducing liability to creditors and steps that should be taken to protect yourself from personal state and federal tax liability.
Hire the attorney at the onset. If you plan on collecting a fiduciary fee for serving, than you can have the attorney do part or all of the work and reap the windfall. If you don’t plan on collecting a fiduciary fee, you can use the attorney as a means to lessen the burden on yourself and protect the estate.
Note: Attorney fees can be a deductible expense of administration