Probate Form Letter for Clients

FORM LETTER GIVEN TO CLIENTS WHO WISH TO DO THE ESTATE BOOKKEEPING:
(You may print this out)

Based on this office's past experience in handling probate matters, it has become evident that the efficient handling of the matter depends primarily on the accuracy of the bookkeeping and records kept while the estate is being administered. It will be necessary at some point in the proceeding that an accounting be made which balances to the penny of all assets, showing all expenses and showing all income. We have found that in some circumstances, it is more cost effective to have this office maintain the books and accounts during the course of the proceeding. If you wish that this office take over these functions at any stage, we would be happy to do so.

The personal representative has the right, however, to maintain all of these records on their own. Doing so in a manner which will keep all legal expenses as low as possible requires that you conscientiously take the following steps which are nothing more than normal good bookkeeping practices:

1. Keep an accurate daily record of all checks issued.

2. Keep all funds of the decedent in a separate account which is not commingled with any of your own funds or anyone else's funds. In other words, open a separate account and keep a checkbook ledger.

3. It is absolutely necessary that you reconcile the bank statements each month with your own check ledger and insure that the figures balance. If the bank has deducted a monthly service charge, deduct that amount from your checkbook ledger. If the bank has added interest, add that amount in your checkbook ledger.

4. If the bank you use does not return the deposit ticket with the monthly bank statement, make sure you retain a copy of all deposit tickets and that on each deposit ticket you itemize the source of all funds being deposited. In other words, if you are depositing more than one check at a time, list not only who the check is from, but the amount that came from that source, i.e.:

                                            "Medicare refund - $ 22.57"
                                            "Interest - $ 33.85"
                                            "Sale of car - $ 2,375.00"

Don't just list "Medicare refund, interest and sale of car - Total $2,431.42". Chances are, when it's time to prepare the Final Account you won't remember how much the refund was, how much the interest check was and how much the car sold for.

5. Pay all expenses with a check on an account where the canceled checks will be returned to you. Most banks use special checks for estate accounts. Keep all bank statements and canceled checks. In some instances it is necessary to submit the canceled checks to the Court as receipts proving that the expenses were actually paid.

6. DO NOT MAKE CHECKS PAYABLE TO "CASH". IF FOR SOME REASON YOU FEEL YOU MUST, THEN YOU MUST ALSO OBTAIN SIGNED RECEIPTS FROM THE PERSON OR BUSINESS THAT THE CASH IS ULTIMATELY GIVEN TO AND THEN KEEP THAT RECEIPT WITH THE CANCELED CHECK.

If you do not follow these simple requirements for good bookkeeping, it will be necessary for the staff at this office to attempt to reconstruct the records at considerable additional unnecessary expense to the estate of the decedent. If you feel you will not have the time to follow these procedures in maintaining the books and records, it will without a doubt be more cost effective to have our office handle these functions on your behalf. If we were to handle these funds, you (the personal representative) would still have to sign all checks and would retain control of the accounts. We would simply be performing the bookkeeping functions.

It is the personal representative's duty to collect all of the decedent's assets, pay all legitimate bills and once ordered to do so by the court, distribute the remaining balance in accordance with the Order received from the court. If there are insufficient funds in the estate to pay all estate bills, do not pay any bills without first checking with our office. DO NOT DISTRIBUTE ANY OF THE ASSETS OF THE ESTATE TO THE HEIRS UNTIL YOU RECEIVE FINAL APPROVAL OF THE COURT.

If the decedent owned real estate, normally that real estate is sold as a part of the probate proceeding and the proceeds from the sale of that real estate deposited into the estate checking and/or savings account discussed above. We would ask that you contact this office immediately if you find a buyer for the real estate so that we can have the abstract updated and begin working on the papers necessary to complete the sale.

As the personal representative you are entitled to be paid from the estate. If you anticipate charging for your services, I would suggest that you keep track of the amount of time you spend working on estate business. This will help to verify your charge should any of the heirs object to the fee you ultimately charge to the estate.