For several years you’re taking care of Mom, dashing her to many doctors and handling her finances. All this while juggling a full-time job. Suddenly your siblings ask, “What have you done with Mom’s money?” “Please account for Mom’s funds for the years you were in charge.”
As children you fought over the teddy bear. Now you’re fighting over a million dollars or more. Family members tend to accuse the financial in-charge of mismanagement, improper transactions and pocketing funds. The financial in-charge may be a guardian, trustee or executor with control over a trust or estate, or a Power of Attorney in charge of the assets of an aging person.
Family monetary disputes can escalate quickly. Providing an accounting to interested parties can prevent explosive family battles and avoid costly litigation.
An accounting? No problem! After all, you kept all the bank statements and receipts for every expense. However, unfortunately, a formal accounting must be in a specific format strictly mandated by NJ Statutes in the Uniform Principal and Income Act. The following do not constitute a formal accounting:
- A stack of all the bank and brokerage statements
- Boxes, envelopes and binders of all receipts for all expenses paid
- The check register for the estate checking account
- The fiduciary income tax returns for the trust or estate (Form 1041) or the individual income tax returns (Form 1040)
- An Excel summary of all expenses paid
- A profit and loss summary from Quickbooks
- Mom’s medical records
Preparing a formal account can be an overwhelming process for a fiduciary. The starting point is a list of all assets for the first day of the account period. All receipts, disbursements, gains and losses from disposition of assets, transfers and distributions are detailed.
We can relieve your burden, take your crates of documents and convert them into a formal accounting. If there is a dispute about a specific asset or disbursement, we will add additional documentation to clarify, strengthen and justify our client’s position. Please contact us to see how our CPA firm can assist you.