Tips for Filing your Trust Account

TIPS FOR FILING YOUR TESTAMENTARY TRUST ACCOUNT

 

  • Accounts must be signed by all trustees. Signatures must be original; facsimiles are not acceptable.
  • Supporting schedules must be submitted in a clear and concise format of 10 point font or larger.
  • Accounts cover a calendar year.  The first account should begin the date the trust was funded and end on December 31st of that year.  Each subsequent account should cover from January 1st thru December 31st until the trust terminates.
  • Itemize in chronological order all principal receipts such as capital gains distributions and principal distributions from the estate received during the accounting period.
  • Itemize in chronological order all income receipts such as interest, dividends, rental income, and other receipts earned during the accounting period.
  • Do not include intra-account transfers as receipts or disbursements.
  • Whenever an asset is sold, if the sales proceeds are greater than the carrying value, the difference should be listed as a gain.
  • If the proceeds of sale equal the carrying value of the asset, then no gain occurs.  You should still show the transaction; however report -0- as the gain.
  • Wherever real property is sold, a copy of the executed HUD-1 is required.
  • For securities sold by a broker, provide the original broker’s statement or a signed settlement sheet as verification.
  • Any corrections to the values of assets from the inventory or prior account should be made on “Line 5: Adjustments.”  Corrections must be substantiated. 
  • Generally, fiduciary compensation and administrative expenses are allocated equally between principal and income disbursements. 
  • All disbursements should be listed in chronological order showing the date, payee, and amount. You may group disbursements by payee.
  • For reimbursements, you must provide evidence that the individual being reimbursed made a payment on behalf of the trust.
  • For legal and accounting expenses, you should submit a copy of the invoices detailing the work provided.
  • Whenever an asset is sold, if the sales proceeds are less than the carrying value, the difference should be listed as a loss.
  • Principal distributions are payments made to or on behalf of a beneficiary.
  • All distributions should be listed in chronological order stating the beneficiary’s name, description of asset distributed and its value.
  • Proper vouchers to support disbursements and distributions should be an image of a cancelled check included in your bank statement or a signed statement of receipt.
  • Bank statements showing wire transfers are not documentation of distributions.
  • Assets on hand are the assets remaining on the end date of the reporting period.  Provide supporting documentation for these assets.  Include two columns for each asset, one for carrying value and one for fair market value (current value).
  • Assets are reported at carrying value (original value listed on the inventory) in the account until the asset is sold or reinvested.  For stocks and securities in dividend reinvestment programs, add any reinvested dividends to the carrying value of the security and increase the number of shares to reflect the additional shares purchased.  Do not report market fluctuations.
  • If you are filing a Final Account, ending Assets on Hand should be $0.00 and bank/brokerage statements should reflect this amount.




 



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