How to document and file receipts for payments to heirs or service providers from a New Hampshire estate

Short answer: Keep written invoices/contracts, itemized receipts signed by the payee, cancelled checks or bank statements showing the payment, an accounting entry that explains the reason for the payment, and any court orders or written authorizations. File required records and final accounts with the probate court when you submit inventories and the estate accounting. Keep complete records for several years in case of questions, estate audits, or beneficiary disputes.

Detailed answer

This FAQ explains how a personal representative (executor or administrator) in New Hampshire should document and file receipts for estate payments to heirs or to vendors and service providers. It assumes you have authority from the will or from the probate court to make payments. If you do not have formal authority, get court approval before spending estate assets.

Why strong documentation matters

• Protects the personal representative from personal liability by proving payments were proper and authorized.
• Helps the probate court and beneficiaries verify distributions and expenses during estate accounting.
• Makes tax reporting and closing the estate cleaner and faster.

What documents to collect and keep for every payment

For every payment from estate funds—whether to an heir, a funeral home, a contractor, an attorney, or any vendor—collect and keep:

• Written authorization or basis: A copy of the will clause, court order, or written beneficiary authorization that permits the payment (if applicable).
• Invoice or contract: A detailed invoice or a signed contract showing services performed, dates, hours/items, and the agreed price.
• Receipt signed by the payee: A dated receipt that states the amount received and the reason (example: “$3,000 received as payment for roof repairs to 12 Main St., estate of Jane Doe”). For payments to heirs, the receipt should state whether payment is a final distribution, a loan, or an advancement on the heir’s share.
• Proof of payment: Cancellable evidence such as a copy of the cancelled check, bank statement showing ACH/wire, or a cleared online payment record showing payee, date, and amount.
• Ledger or accounting entry: A contemporaneous entry in the estate’s bookkeeping that ties the payment to the invoice/receipt and to the estate account used.
• Supporting documents: Photos of work completed, delivery receipts, lien waivers from contractors, W-9 for vendors (for tax reporting), and any communication that shows approval or acceptance.

Special rules for payments to heirs

• If you intend a payment to be an advance on inheritance, document that clearly in writing and have the heir sign an acknowledgment indicating the payment will be treated as an advance. Note the amount and date so it can be credited against that heir’s share during final accounting.
• If the payment is a final distribution, have the heir sign a receipt and, if appropriate, a release or waiver stating that they accept the distribution in full satisfaction of their claim (use plain language and consider having the probate court review the release if the estate is contested).
• Avoid informal cash payments without receipts. If an heir insists on cash, get a signed receipt that records the reason the payment was made and whether it is a distribution, loan, or reimbursement.

Payments to vendors and service providers

• Use written contracts for significant work (repairs, home preservation, selling costs). The contract should include scope of work, price, timeline, and payment schedule.
• Obtain lien waivers from contractors when you pay for improvements. This protects the estate property from mechanics’ liens.
• Keep vendor tax forms (W-9) for payments that may require Form 1099 reporting.

Filing records with the New Hampshire probate court

New Hampshire probate procedure expects the personal representative to inventory assets and file an accounting at appropriate times. When you file an inventory or a final account, attach or be prepared to present the supporting documentation for major disbursements (contracts, invoices, receipts, canceled checks, and any court orders). Check local probate forms and practice for required attachments.

General probate resources for New Hampshire are available from the New Hampshire Judicial Branch (Probate Division): https://www.courts.state.nh.us/. For statutory authority and detailed statutes governing wills and estate administration, see the New Hampshire Revised Statutes: https://www.gencourt.state.nh.us/rsa/html/.

Accounting best practices and timeline

1. Open a dedicated estate bank account and use it for all estate receipts and payments.
2. Record each transaction immediately in a ledger or accounting software (date, payee, amount, reason, invoice/receipt reference).
3. Keep originals of large invoices and receipts. Scan and back up electronic copies securely.
4. Prepare interim accountings if beneficiaries request them or if the court orders them. When closing the estate, file the final accounting with the probate court and provide beneficiaries with account details and supporting receipts for significant items.
5. Retain records for at least several years (commonly 3–7 years depending on tax or court requirements). Confirm retention periods with local counsel or the probate court clerk.

Tax and reporting considerations

• Payments to independent contractors or service providers may require Form 1099 reporting if they exceed federal thresholds. Collect W-9 forms from vendors before payment.
• Keep receipts for deductible estate expenses (funeral expenses, estate administration costs, repairs) to substantiate deductions on estate or fiduciary tax returns.
• Consult a tax professional for filing the estate’s returns and issuing any required information returns to payees.

If a payment is disputed or questionable

• Do not make additional distributions until the dispute is documented and, if necessary, resolved through the probate court.
• Consider obtaining a court order approving the questioned payment or distribution. A court order provides protection against later claims by creditors or beneficiaries.
• If you suspect self-dealing (for example, paying yourself or a related party), document the reasonableness of the charge, obtain beneficiary consent in writing, or seek court approval.

Helpful Hints

• Use a simple, consistent receipt form: include estate name, payee name, purpose, amount, date, method of payment, and signature of recipient.
• Label scanned documents clearly (e.g., “Estate_JaneDoe_Invoice_Contractor_2024-05-08.pdf”).
• Keep a running spreadsheet for distributions and advances to heirs showing date, amount, document ref, and whether it’s an advance or final distribution.
• Before paying a large bill, confirm the estate has adequate liquidity or obtain court permission to sell assets for cash.
• When in doubt, get beneficiary consent in writing or ask the probate court to approve the payment—this reduces later litigation risk.
• Collect W-9s from vendors and be ready to issue federal information returns where required.
• Keep original receipts for at least the period recommended for tax records and any statutory limitations on challenges (consult your tax advisor or probate clerk).

Sample receipt language (example)

“Received from [Name of Estate/Personal Representative] the sum of $[amount] on [date] as [final distribution / advancement on inheritance / payment for services – specify]. Signature: ____________________ (payee).”

Where to look for more New Hampshire-specific guidance

• New Hampshire Judicial Branch (probate information and forms): https://www.courts.state.nh.us/
• New Hampshire Revised Statutes (RSA) and state legislative materials: https://www.gencourt.state.nh.us/rsa/html/
• Contact the clerk of the local probate court for local filing requirements and required attachments to inventories or accounts.

Disclaimer: This article provides general information about recordkeeping and documenting estate payments in New Hampshire. It is not legal advice. Laws and court procedures change. For advice tailored to your situation, contact a licensed attorney or the probate court.