Two different jobs
Accounting for a trust or estate means two different jobs. The titles fiduciary CPA, fiduciary accountant and fiduciary tax accountant are used for both:
- The court accounting (or the trustee’s account to beneficiaries): the summary of charges and credits and its schedules, in the California Probate Code §§1060–1064 format or the Judicial Council GC-400 layout, balanced to the penny. See a complete example.
- The fiduciary income tax returns, federal and California, prepared by a CPA or other tax professional.
Some probate accountants, estate accountants and trust CPAs do both; many do one. Before you hire an estate CPA, a trust accountant or a CPA for trust accounting, confirm which job they do.
What drives the fee for the accounting
A court accounting is usually billed by the hour, and the hours depend on the number of accounts, the activity in them, securities and corporate actions, transfers between accounts, and whether it balances on the first pass. That is why the accounting is often the single largest cost of an administration, and so hard to predict. More on what an accounting really costs.
Questions to ask before you hire
- Have you prepared California court accountings in the §1060–1064 or GC-400 format before?
- Is the fee fixed, or hourly with an estimate? What happens to it if the accounting does not balance or needs revisions?
- What is included: every schedule, market values, the principal and income allocation, a tax summary?
- How long will it take, and who reviews it?
A technology alternative for the accounting
Balanced is a new kind of software for California fiduciary accountings. From the PDF bank and brokerage statements, Balanced generates the accounting in minutes to hours, rather than the days, weeks or months of manual work it otherwise takes: transactions classified to their schedules, carry values tracked lot by lot, each account reconciled to its own statements, the summary balanced to the penny, and each entry cited to the statement and page from which it was drawn, delivered as one fully editable Excel workbook. $699 per accounting.
A fiduciary can keep their CPA for the tax returns and use Balanced for the accounting itself; Balanced’s workbook includes a tax summary by year for the CPA.