NEW YORK ESTATE ACCOUNTING & TAX GUIDANCE
Estate Accounting & Tax Guidance for New York Estates
Administering an estate requires more than collecting assets and making distributions. Executors and administrators must be able to account for what came into the estate, what was paid, what changed in value, and what ultimately passed to beneficiaries.
Eldon helps fiduciaries organize and evaluate the financial activity of an estate, prepare estate and fiduciary accountings, calculate distributions and commissions, identify potential tax considerations, and coordinate the information needed by accountants and other tax professionals when tax filings are required.
An Estate Must Ultimately Account for Every Dollar.
An executor or administrator is responsible for property that belongs to someone else. That responsibility includes maintaining records showing what the decedent owned, what the estate received, what it spent, what was sold or distributed, and what remains.
Proper estate accounting helps protect beneficiaries—but it also helps protect the fiduciary. Clear and complete records can demonstrate how estate property was handled, support proposed distributions, and identify potential problems before the estate is closed.
Eldon works with executors and administrators to reconstruct and organize estate transactions, determine the proper treatment of receipts and expenses, calculate proposed distributions and commissions, and prepare the financial information necessary to demonstrate that an estate has been administered appropriately.
When an estate presents income, estate, fiduciary, or other tax considerations, we help identify those issues and coordinate with the estate's accountant, CPA, or other tax professional as appropriate.
We guide fiduciaries through the financial and legal responsibilities of estate administration with clarity and confidence.
On This Page
Understanding Estate Accounting
What an Executor Must Track
Preparing an Estate Accounting
Executor Commissions & Distributions
Tax Considerations During Administration
Working with Accountants & Tax Pros
Informal vs. Judicial Accountings
Common Accounting Problems
Frequently Asked Questions
What Is Estate Accounting in New York?
Estate accounting is the process of documenting the financial administration of an estate from the time the fiduciary takes responsibility through the final distribution of estate property. It provides a financial history of the estate and allows beneficiaries, fiduciaries, attorneys, and, when necessary, the Surrogate's Court to understand how estate property was handled.
Depending on the circumstances, an estate accounting may include:
Assets received by the estate, income earned during administration, and changes in the value of estate property.
Payments of debts, taxes, expenses and fees, as well as other amounts properly paid from estate assets.
Distributions to beneficiaries, fiduciary commissions, and assets remaining for final distribution.
Need help understanding an estate's financial activity? Talk with an Estate Administration Attorney
What Does an Executor Need to Keep Track Of?
Good record keeping begins at the start of administration. Executors should maintain organized records of:
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Assets owned by the decedent
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Date-of-death values
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Estate bank account activity
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Deposits and receipts
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Investment income and activity
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Real estate income and expenses
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Properly sales
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Creditor payments
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Funeral and administration expenses
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Legal and professional fees
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Taxes paid by the estate
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Executor or administrator advances
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Beneficiary distributions
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Fiduciary commissions
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Assets remaining in the estate
Preparing an Estate Accounting
1 — Identify the Starting Estate
We identify the property and financial interests that came under the executor's or administrator's control and establish the starting point for the accounting.
2 — Reconstruct Estate Activity
We review available records to identify receipts, expenses, asset sales, transfers, income, and distributions occurring during administration.
3 — Categorize Transactions
Estate transactions must be properly identified and organized so that the accounting accurately reflects what occurred and why.
4 — Reconcile Estate Funds
Available records are compared against estate accounts and transactions to identify discrepancies, missing information, or amounts requiring further explanation.
5 — Calculate Amounts
We help determine available balances, proposed beneficiary distributions, fiduciary commissions, appropriate reserves, and other amounts relevant to completing the estate.
6 — Prepare the Accounting
The estate's financial activity is organized into a form that can be reviewed by beneficiaries, used in settlement discussions, incorporated into closing documentation, or presented to the court when a judicial accounting is necessary.
Let Attorneys and Accountants Work Together
Eldon helps identify tax issues affecting the administration, organize and evaluate estate information, and determine amounts relevant to administration and distributions.
When preparation of a tax return or specialized tax advice is required, we coordinate with the estate's accountant, CPA or other appropriate tax professional.
Estate Accounting & Tax Resources
Understanding statutory commissions and which estate assets may be included.
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Understanding the different types of tax filings that can arise after a death.
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How executors account to beneficiaries and when court involvement may be required.
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Make Sure the Numbers Tell the Right Story.
Whether you are beginning an estate administration, preparing for final distributions, trying to reconstruct financial records or facing questions about an existing accounting. Eldon can help you understand the estate's financial picture and the legal responsibilities that come with it.
Frequently Asked Questions About Estate Taxes & Accounting:
What is an estate accounting?
An estate accounting is a detailed record of the financial activity of an estate. It generally shows the assets received by the executor, income earned, expenses and debts paid, distributions made to beneficiaries, and the property remaining to be distributed.
Does every New York estate require formal accounting?
No. Not every New York estate requires a formal judicial accounting. Many estates are settled informally when the executor provides appropriate information to the beneficiaries and the interested parties agree to the proposed distributions. A formal accounting may be necessary when disputes arise, a beneficiary requests court review, or other circumstances require Surrogate’s Court involvement.
Can a beneficiary ask an executor for an accounting?
Yes. Beneficiaries generally have the right to receive information concerning the administration of an estate and may request an accounting from the executor. If adequate information is not provided voluntarily, a beneficiary may be able to ask the Surrogate’s Court to compel the executor to account.
Who prepares the estate’s tax returns?
The executor or other personal representative is responsible for making sure required tax returns are filed, although the returns are commonly prepared with the assistance of an accountant, tax professional, or attorney. Depending on the estate, this may include the decedent’s final income tax return, estate income tax returns, and potentially federal or New York estate tax returns.
Does an executor get paid in New York?
Yes. New York law generally allows an executor to receive commissions for administering an estate. The amount is typically calculated under a statutory schedule based on the value of property received and paid out by the executor, although the calculation can vary depending on the circumstances of the estate.
Can an executor distribute the estate before taxes are complete?
Sometimes, but an executor should proceed carefully. The executor is responsible for addressing the estate’s debts, expenses, and tax obligations before making final distributions. In appropriate circumstances, partial distributions may be made while tax matters remain open, provided sufficient assets are retained to cover anticipated taxes, expenses, and other estate obligations.