Accounting

It will be necessary to establish an estate bank account. After the initial meeting for legal accounting advice, a determination can be made of which property should be used to open such an account.

Upon opening an estate account, the bank will need a tax identification number for the estate (sometimes called an employer identification number or “EIN”). An EIN assigned to the estate can be obtained by the probate lawyer from the IRS.

All money that is received should be deposited to the estate account and all creditors’ claims and expenses of administration should be paid by checks drawn on the account. If the balance in the estate checking account becomes greater than the amount necessary to pay debts and expenses of the estate, an estate savings account may be opened or other short-term investments made. However, all deposits and withdrawals should still be made through the checking account.

It is vital that accurate records be kept of all trust and estate transactions and they need to be separate. Copies of all items deposited to the account should be made and adequate descriptions of all deposits and checks written should be maintained. The records will provide the necessary information for preparation of the trust’s income tax returns and any accountings that may be required.