WorkflowTrusts, Estates & Probate

Fiduciary Accounting

Fiduciary accounting software that reads a trust’s statements, places each line in principal or income with the rule beside it, and ties the court account to the penny.

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The problem

Years of statements rekeyed, each custodian’s code taken on trust

The fiduciary accountant keys years of brokerage, bank and partnership statements into a spreadsheet, then decides line by line whether each receipt and expense belongs to principal or income. The custodian’s transaction code is the only hint on the page, and it can be wrong: a mutual fund’s capital gain payout can carry a dividend code.

Keyed as coded, that payout goes to the income beneficiary and comes out of the remaindermen’s share. The trust instrument can depart from the act, charging all trustee pay to principal, and nobody’s spreadsheet remembers it. A missing month or an unexplained difference stops the filing, and an error a remainderman’s counsel finds costs a hearing, fees charged to the trust and the fiduciary’s credibility.

Built forFiduciary accountantsTrusts partnersProbate paralegalsTrust administrators

The Problem Today

A trust’s account is rebuilt from years of statements, each line coded principal or income from memory.

$124T: of wealth to transfer through 2048, much of it in trust published

The work today

Statements
Coding
Tie-out
Schedules

Codes that misleadA fund’s capital gain arrives labeled a dividend
The will overrides the actIts own rules for fees and income, easy to forget

The Solution

Statements read and citedEach line tied to the statement page it came from
Principal or income, ruledEach line placed under the state act or the will, with the rule cited
Conflicts held for a personWhen a statement’s code and the rule disagree, the line waits
Tied out, then signedEach account tied to the penny; the partner signs the petition

Built-in controls

Discretionary powers decided only by the partner
No balancing entry ever forces a tie
Only the last four digits of an account shown

What You Get

The partner signs an account a beneficiary’s counsel can check line by line, with the rule behind each allocation.

8 hours: of review for a three-year account, from 50–80 by hand our estimate

Both sides see the effectEach judgment call shows what it does to each beneficiary
Trustee fees recheckedEach quarter recomputed from the fee agreement
Filed in the court’s formatSchedules with each sale’s gain or loss, and the petition

Statement to signature

How fiduciary accounting software builds a trust’s court account

The account as it comes together, one feature to a screen, with the role each feature serves and the trouble it spares them.

01Statements read
Statements read in each custodian’s layout, each month tied to the last
How it works
- Brokerage, bank, partnership and year-end tax statements read in each custodian’s own layout
- 195 statements for 6 accounts over 36 months, with a page citation on each line
- Each opening balance checked against the prior closing, 186 of 186 pairs
- The coverage grid shows no missing month in any account
Probate paralegalKnows the file is complete before the accountant starts; no missing statement surfaces in the last week to keep the account from tying.
02Fund payouts against tax statements
Each fund payout checked against the fund’s year-end tax statement
How it works
- Each mutual fund payout matched to the same amount on the year-end tax statement
- 9 capital gain distributions found across the period, totaling $74,612.58
- Eight carry the custodian’s CG code; one of $18,400.00 is coded DIV
- The payout whose code disagrees is flagged before it reaches the ledger
Fiduciary accountantSees the capital gain filed under a dividend code without opening each fund’s tax statement and comparing it with the custodian’s line herself.
03Lines where the will governs
A two-page ledger with principal on the left, income on the right
How it works
- Each line from the statements lands on the principal page or the income page
- The rule that placed it sits in the gutter beside the description
- Where the will overrides the act, the line cites the will’s article
- A trustee fee of $9,687.50 is charged to principal under the will’s ninth article
Fiduciary accountantCan answer a beneficiary’s counsel on any line with the rule printed beside it, instead of reconstructing from memory why it went where it did.
04Held payout
A payout held when the custodian’s code and the allocation rule disagree
How it works
- The $18,400.00 payout stays off both pages, marked held
- The statement line and the tax statement line sit side by side
- The rule is quoted with the proposal: principal
- Keyed as coded, income for the period would read $531,088.34
Fiduciary accountantCatches the one line in 2,140 the custodian coded wrong, before it moves money from the remaindermen to the income beneficiary.
05Payout placed in principal
Court schedules that fill as lines land, balanced with no plug
How it works
- The accountant places the held payout in principal with one confirmation
- Income for the period settles at $512,688.34 and Schedule A at $268,940.52
- Principal against the statements moves from $18,400.00 short to $0.00
- The confirmation is logged in the accountant’s name with the rule
Fiduciary accountantSees the account balance to the penny as the last line lands, with no balancing entry left to explain to the court.
06Decision on the timber payout
Judgment calls showing what each choice does to income and remainder
How it works
- 12 calls the act leaves to judgment go to the trusts partner
- Each comes with a proposal, the rule text and the effect on both sides
- A $64,000.00 partnership payout from selling 22% of its timberland is proposed as principal
- Only the partner approves, edits or declines; the accountant prepares
Trusts partnerDecides a partial liquidation with the rule and the cost to each beneficiary on one screen, so the reason is on the line if a beneficiary objects.
07Power to adjust, declined
A power to adjust shown as two options for the partner alone
How it works
- The income beneficiary’s counsel asked for an adjustment of $52,000.00
- No agent proposes how to use a discretionary power; both options are shown
- With no adjustment, income stays at $512,688.34 for the period
- The partner declines with his reason, and the petition says so
Trusts partnerExercises or declines a discretionary power on the record, with a written reason ready before the income beneficiary’s counsel asks for one.
08Trustee fees
Each quarterly trustee fee recomputed from the fee agreement
How it works
- 12 quarterly fees recomputed from the fee agreement, 0.75% a year billed at 0.1875%
- Q3 2024 was charged $10,280.00 against $9,080.00 due
- The base included the rental property, which the agreement excludes
- The fee stays in Schedule C as paid and becomes an exception in the petition
Fiduciary accountantPuts the corporate co-trustee’s billing error in the petition before a remainderman’s counsel can recompute the fees and find it.
09Signed petition
A petition for allowance, signable only once the account is complete
How it works
- Drafted from the schedules, with a link from each figure to its schedule
- Three exceptions explained: the fee overcharge, the prepaid rent and the legal fees
- Signing opens only when 2,140 of 2,140 lines are placed and 12 of 12 decided
- Only the trusts partner signs; the preparer cannot
Trusts partnerSigns a petition he can check against its schedules, with each exception already written out in plain words for the court and the beneficiaries.

A capital gain under a dividend code, and a fee billed on the rental house

Four items from one three-year account that a spreadsheet keyed as coded would have carried to the court.

A capital gain coded as a dividend

A payout of $18,400.00 made in December carried a DIV code. The fund’s year-end tax statement reports a capital gain distribution, so it belongs to principal.

A trustee fee on property it excludes

The third-quarter 2024 fee used a base that included the rental property at $640,000.00. The agreement excludes real property: $1,200.00 over.

Rent paid for the next account

$3,150.00 received in December for January to March is carried to the next account and named in the petition as an exception.

A partnership payout that is a partial liquidation

The timber partnership sold 22% of its timberland and paid the trust $64,000.00. At over 20% of its gross assets, the payout is a partial liquidation and goes to principal.

One $18,400.00 payout, keyed as the custodian coded it and placed by rule

The same account before and after the accountant confirms the rule on that one line.

Line of the account	Keyed as coded	Placed by rule
Income received in the period, Schedule E	$531,088.34	$512,688.34
Receipts of principal, Schedule A	$250,540.52	$268,940.52
Principal on hand, Schedule H	$5,747,639.95	$5,766,039.95
Income on hand, Schedule I	$34,074.97	$15,674.97
Principal against the statements	$18,400.00 short	$0.00

Around the ledger

The statement page, the schedules and the audit trail behind the account

What the accountant, the partner and the paralegal open around the ledger.

Custodian statement page, opened from its citation, with the $18,400.00 capital gain line highlighted and the account number masked down to four digits — **The page behind a line**A citation opens the custodian’s page as read, the $18,400.00 line marked and account numbers masked down to four digits.

Probate court accounting summary: principal on hand $5,766,039.95, income on hand $15,674.97, total $5,781,714.92, balanced to the penny — **The summary of account, balanced**Principal of $5,766,039.95 and income of $15,674.97 add to $5,781,714.92, equal to the six accounts and the property.

Schedule B listing each asset sold over the three years by date, with its gain or its loss in separate columns — **Gain or loss for each asset sold**Schedule B lists 15 sales by date, gains of $412,377.95 against losses of $61,204.30, for a net gain of $351,173.65.

Tie-out of six accounts and the real property against their closing statements, principal and income cash apart, each difference $0.00 — **Each account against its closing statement**Six accounts and the property tie to their year-end statements, principal and income cash apart, and the opening balances equal the prior account.

Trust accounting software drafting a refund request for a $1,200.00 trustee fee overcharge, waiting for the co-trustee partner to send it — **A refund request, drafted**The fee check drafts the letter asking the corporate co-trustee to refund $1,200.00. The partner sends it, or it stays a draft.

Audit trail of the account listing who read the statements, placed lines, approved and declined decisions and signed, with times — **Who read, placed, decided and signed**Each read, placement, decision and signature on the account, by person or agent, kept 10 years after the final account.

The partner rules on discretionary powers, and no difference is plugged

Agents prepare the account. The fiduciary and counsel make these calls.

Discretionary powersNo agent proposes how to use the power to adjust. The partner sees the options and their effect, and decides.

A code that conflicts with the ruleA line whose statement code and rule disagree waits for the accountant to confirm where it lands.

Balancing entriesThe tie-out never adds a plug. A difference stays on screen until a person explains it or a line is placed.

Signing and filingThe petition is drafted, never signed or filed by an agent. Only the trusts partner signs, and the preparer cannot approve a partner’s decision.

Contact with the trusteeThe fee check never writes to the corporate trustee. The partner reads the refund request and sends it.

Changes to the rulesOperations proposes changes to the governing act, the holds and the roles; the trusts partner approves them.

Fiduciary accounting software, in the questions a trusts partner raises

What is fiduciary accounting software?

Fiduciary accounting software builds the account a trustee or executor owes the probate court from the estate’s or trust’s statements. This one reads each statement, places each line in principal or income with its rule cited, ties each account to its closing balance, and drafts the court schedules and petition for the trusts partner’s signature.

How does principal and income allocation work when the will overrides the act?

Lines are placed under the state’s principal and income act, and under the will wherever it speaks. In this account the will charges all trustee compensation to principal, so those lines cite the will’s article instead of the act. Discretionary powers and large lines with no mandatory rule go to the trusts partner.

What happens when a custodian codes a capital gain as a dividend?

The line is held. When the statement calls a fund payout a dividend and the year-end tax statement reports a capital gain distribution, the line waits for the accountant with both lines and the rule beside it, and lands only when she confirms it.

Can it draft the probate court accounting schedules?

Yes. The summary of account and schedules A to I are drafted in the court’s format from the ledger, with the gain or loss for each asset sold. Each total is the sum of cited lines, and drafting a schedule cannot change an allocation.

How are the trustee’s fees checked?

Each quarterly fee is recomputed from the fee agreement and the quarter-end statement. A difference over the agreed threshold is flagged, named as an exception in the petition, and a refund request is drafted for the partner, who sends it himself.

Who prepares, who decides and who signs?

The fiduciary accountant prepares and confirms the rule-based lines. Only the trusts partner decides judgment calls and signs the account and petition; the preparer cannot approve, and the signer cannot edit the ledger. The probate paralegal gives notice to the beneficiaries after signature.

Trusts, Estates & Probate