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How to Prepare an Estate Accounting in New York City
An estate accounting is the executor’s or administrator’s statement of everything that came into the estate and everything that went out, arranged in the schedules the Surrogate’s Court prescribes under SCPA 2208. It shows the assets at their date-of-death values, the gains and losses when they were sold, the income they earned, the funeral and administration expenses, the debts and taxes paid, the commissions taken, the distributions already made, and what remains. The same set of schedules serves two purposes: delivered to the beneficiaries with the backup, it is an informal accounting; filed with a petition and a citation, it is a judicial accounting. This page explains when an accounting is needed, what goes in each schedule, how the figures are reconciled, and the mistakes that draw objections. It is part of our section on trust and estate accountings.
When an Accounting Is Needed
A New York fiduciary is not required to prepare an accounting on their own initiative. Most estates are distributed against receipts and releases, with at most a summary of receipts and disbursements, and no formal account is ever drawn up. An accounting becomes necessary in three situations.
A beneficiary asks for one. Once asked, the fiduciary must account. Seven months after letters issue, a beneficiary who has not received one can petition under SCPA 2205 to compel it, and the court will order it. See whether an executor must show an accounting.
The fiduciary wants a discharge. A decree on a judicial accounting binds everyone cited and ends the fiduciary’s exposure. Fiduciaries choose it after a difficult administration or when a beneficiary will not sign a release.
The court requires it. Where an interested party cannot sign a release (a minor, a person under disability, unknown or missing heirs, a charity) or the Public Administrator serves, the account must be settled judicially.
Whichever situation applies, the account is prepared the same way. A fiduciary who keeps proper records from the first day can produce it in weeks; one who has to reconstruct years of transactions from bank archives will need months, and a court that has ordered an accounting allows far less than that.
The Accounting Period and the Opening Figures
The account covers the period from the date letters issued (or from the last settled account, for an intermediate accounting under SCPA 2210) to a closing date shortly before the account is delivered or filed. The opening figures are the date-of-death values of the probate assets: bank and brokerage balances from the statements covering the date of death, securities at their closing prices that day, real property and business interests at appraised value. Assets that passed outside the estate, such as joint accounts, accounts with named beneficiaries and life insurance payable to individuals, are not included. Where an estate tax return has been filed, the account should use the same values, because a difference between the two invites a question.
The Schedules
SCPA 2208 and the court’s official form set out the schedules. Not every estate needs every schedule, but the ones that apply must be complete, and each entry needs a date, a description and an amount. The table shows what each schedule holds and where problems usually appear.
| Schedule | Contents | Common problems |
|---|---|---|
| A — Principal received | Every probate asset at its date-of-death value, and anything received later that is principal (a refund, a lawsuit recovery, a tax refund) | Assets left off; values that do not match the estate tax return or the appraisal; non-probate assets mixed in |
| A-1 — Realized increases | Gains on sale or collection of principal assets, measured against the Schedule A value | Sale proceeds shown net of expenses that belong on Schedule C; gains not tied to the Schedule A entry |
| A-2 — Income collected | Interest, dividends, rent and other income earned during administration, by source | Income posted as principal; rent from a house never collected or never explained |
| B — Realized decreases | Losses on sale or collection, and assets found uncollectible | Below-market sales; sales to relatives or to the fiduciary; a loss on an asset held too long |
| C — Funeral and administration expenses charged to principal | Funeral bill, court fees, appraisals, attorney’s and accountant’s fees, carrying costs of real property, taxes paid | Personal expenses of the fiduciary; expenses without invoices; attorney’s fees paid without court review; duplicate reimbursements |
| C-1 — Unpaid administration expenses | Expenses incurred but not yet paid, including the fees for the accounting itself, and a reserve for closing costs | Reserves that are too large; fees estimated without a basis |
| C-2 — Administration expenses charged to income | The portion of expenses properly chargeable to income | Everything charged to principal (or to income) without regard to the allocation rules |
| D — Creditors’ claims | Claims presented, paid, rejected and pending, with the amount and the fiduciary’s position on each | Claims paid without proof; the fiduciary’s own claim paid without disclosure; claims paid after the seven-month period at the fiduciary’s risk |
| E — Distributions of principal | Specific bequests and partial distributions already made, to whom and when | Unequal advances to some beneficiaries; distributions made before seven months without a reserve for claims; no receipts |
| E-1 — Distributions of income | Income paid out during administration | Income distributed to the wrong beneficiaries under the will’s terms |
| F — New investments and exchanges | Securities bought, reinvested or exchanged, and stock dividends and splits | Speculative investments; trades that generated fees without a purpose; the same asset appearing under two names |
| G — Principal on hand | What remains, asset by asset, at both the Schedule A value and current value | Does not agree with the summary; securities listed at stale values |
| G-1 — Income on hand | Undistributed income at the closing date | Income and principal cash not separated |
| H — Interested parties | Every person entitled to notice, their relationship, their interest, and whether they are under a disability | A beneficiary or unpaid creditor left out, which leaves the decree open as to them |
| I — Computation of commissions | The SCPA 2307 computation, receiving and paying-out, on the amounts actually received and paid, and any commissions already taken | Commissions on specifically devised real property or on non-probate assets; commissions taken early without consent or order; more full commissions than the statute allows for the size of the estate |
| J — Other pertinent facts and cash reconciliation | Anything the court should know (pending litigation, tax audits, the estate’s tax returns), and the reconciliation of the estate bank accounts to the schedules | The reconciliation does not balance; a transaction with no explanation |
| K — Estate taxes paid and allocation | Federal and New York estate tax paid and how it is apportioned among the beneficiaries | Tax charged entirely to the residue when the will or the apportionment rules put part of it on other beneficiaries |
The schedules feed a summary statement at the front of the account: principal received (A) plus increases (A-1), less decreases (B), expenses (C), claims (D) and distributions (E), equals principal on hand (G); income collected (A-2), less expenses charged to income (C-2) and income distributed (E-1), equals income on hand (G-1). If the arithmetic does not close, the account is not finished.
The Reconciliation
Schedule J ties the account to the bank. For each estate account, the closing balance on the bank statement is adjusted for outstanding checks and deposits in transit and compared with the cash shown on Schedules G and G-1. The two figures must agree exactly. The reconciliation is where most preparation problems surface: a deposit never categorized, a check to the fiduciary with no invoice behind it, a transfer between accounts entered as income. We build the account from a transaction-by-transaction ledger of every estate account, assign every entry to a schedule, and only then draft the schedules, so that the reconciliation closes by construction rather than by adjustment at the end.
Example. An estate consists of a $600,000 co-op apartment, a $150,000 brokerage account and $50,000 in a bank account. The co-op is sold for $640,000 with $40,000 in closing costs; the brokerage account is liquidated at $160,000. Schedule A shows $800,000; Schedule A-1 shows gains of $40,000 on the co-op and $10,000 on the brokerage account; Schedule C shows the $40,000 in closing costs alongside the funeral bill, the legal fees and the maintenance paid while the apartment was on the market. The gross sale price is what the fiduciary received and the closing costs are an expense of administration. Netting them understates both, and the beneficiaries’ lawyer will notice.
Principal and Income in a Trust Accounting
An estate accounting usually treats income as a minor matter. A trust accounting cannot, because the income beneficiary and the remainder beneficiaries are usually different people with opposite interests. Every receipt is classified as principal or income and every expense allocated between them under the trust instrument and New York’s principal and income rules; trustee commissions under SCPA 2309 are charged one-third to income and two-thirds to principal unless the instrument says otherwise. The schedules are the same, but the income side (A-2, C-2, E-1, G-1) carries as much weight as the principal side, and an error in allocation is itself an objection. See when a trust accounting is required and the Prudent Investor Act, which governs what the trustee did with the money.
The Records Behind the Account
Before the schedules are drafted, the fiduciary should assemble, for the entire accounting period, every statement for every estate bank and brokerage account, from opening to closing; the date-of-death statements and appraisals behind Schedule A; closing statements for real property sales, with the contract and broker’s invoice; invoices and cancelled checks for every expense on Schedule C, and the time records behind attorney’s and accountant’s fees; each creditor’s claim as presented, the proof demanded, and the payment or rejection; the estate’s income and estate tax returns, with closing letters; receipts for every distribution.
In an informal accounting the fiduciary delivers the account with these records or makes them available on request; a beneficiary is entitled to see them before signing a release. See whether a beneficiary can see the bank statements. In a judicial accounting the records are produced in the SCPA 2211 examination and in discovery.
Commissions Computed on the Account
Schedule I computes the fiduciary’s commissions under SCPA 2307: 5% of the first $100,000, 4% of the next $200,000, 3% of the next $700,000, 2.5% of the next $4,000,000 and 2% above $5,000,000, half for receiving and half for paying out, computed on the sums actually received and actually paid. Specifically devised real property and assets passing outside the estate are not commissionable. Where more than one fiduciary serves, the statute limits how many full commissions the estate bears. The computation is shown in full so that every beneficiary can check it, and commissions already taken during administration, with the consent or order that authorized them, are disclosed and credited against the total. Commissions are the most common objection in accountings, usually because they were computed on the gross estate rather than on what the fiduciary handled.
Informal Delivery or Judicial Filing
An account in the court’s format can be used either way. Delivered to the beneficiaries with a receipt, release and waiver of citation, it is an informal accounting; if every beneficiary signs, the estate is distributed without a court filing. If a beneficiary will not sign, or someone cannot, the same account is filed with a petition under SCPA 2206, everyone on Schedule H is cited, and the court settles the account by decree. Preparing the account in the court’s format from the start means a change of course costs nothing; a “summary” that has to be rebuilt into schedules costs months. See judicial accountings in New York.
Mistakes That Draw Objections
| Mistake | What follows |
|---|---|
| Missing assets | A beneficiary who knows about an account or a collection that does not appear on Schedule A will object, and the fiduciary will have to explain where it went. |
| Values that do not match | An estate tax return that says one thing and a Schedule A that says another. |
| Expenses without backup | Reimbursements to the fiduciary, cash withdrawals, and payments to family members are disallowed if they cannot be documented and explained. |
| Commissions on the wrong base | Commissions on the house that passed by specific devise, on the joint account, or on the life insurance. |
| Commingling | Estate money that passed through the fiduciary’s personal account, contrary to EPTL 11-1.6, is presumed to have been misused until the fiduciary proves otherwise. |
| Delay | A house left unsold for years, cash left uninvested, a legacy paid late and without interest. Delay that cost the estate money is a surcharge. |
| A reconciliation that does not close | Any gap between the bank and the schedules is treated as unexplained, and the fiduciary bears the burden of explaining it. |
How objections are made and resolved is covered on our pages on objecting to an accounting, defending one, and surcharge.
Preparing the Account
We prepare estate and trust accountings in-house, in the court’s format, for fiduciaries who have been asked to account, who want a discharge, or who must account because a beneficiary cannot sign a release; an uncontested accounting is prepared for a flat fee. We also review accountings for beneficiaries who have been asked to sign a release. Call 212-233-1233 or email [email protected].
About the Author
Albert Goodwin Esq. is a licensed New York attorney with over 18 years of courtroom experience. His extensive knowledge and experience make him well-qualified to write authoritative articles on a wide range of legal topics. He can be reached at 212-233-1233 or [email protected].
