Unit 3: Accounting for Estates and Trusts
Estate accounting is a specialized field within the accounting profession that deals with the financial aspects of administering and distributing a deceased person's property. It is important for estate administrators and trustees to have a thorough understanding of the legal and accounting principles involved in the process, as they are responsible for ensuring that the estate is properly managed and that the decedent's wishes are carried out.
In this unit, we will focus on the legal and accounting aspects of estate and trust administration. Specifically, we will cover:
- Legal Aspects of Estate Administration
The process of probating a will, appointing a personal representative, and managing the decedent's assets.
- Classification of Legacies
The different types of gifts (specific and general legacies) that can be bequeathed in a will.
- Accounting Aspects of Estate Administration
The preparation of financial statements and the management of income and expenses during the estate administration process.
- Accounting and Reporting for Estates
The requirements for preparing and filing financial statements for an estate, including the inventory of assets and liabilities and the statement of income and expenses.
- Legal and Accounting Aspects of Trusts
The differences between estate and trust administration, and the role of the trustee in managing trust assets and distributing income to beneficiaries.