This FAQ explains, under Montana law, what statements and financial documents you typically must prepare and keep when filing annual and final probate accountings. It describes the kinds of records courts expect, the typical format of an accounting, and practical steps to assemble a complete filing. This is educational information only — not legal advice. See the disclaimer at the end.
Detailed Answer
What an accounting is and who files it
An accounting is a formal financial report a fiduciary (personal representative/executor, administrator, or successor fiduciary) provides to the probate court and to beneficiaries. It shows how estate funds and property were collected, managed, and distributed during the reporting period. In Montana, the authority and duties of fiduciaries, including accounting and reporting obligations, come from the Montana Probate Code (see Montana Code Annotated, Title 72) and local court rules. For the general statutes on fiduciary administration, see the Montana Code (Title 72): https://leg.mt.gov/bills/mca/title_72/.
Core pieces every annual or final accounting should include
Both annual and final accountings normally include a clear set of financial statements plus supporting documents. At minimum, prepare the following:
- Cover statement / certification: A short cover page that identifies the estate, the fiduciary, the reporting period (for an annual accounting) or that this is the final accounting, and a certification that the accounting is true and correct to the best of the fiduciary’s knowledge.
- Beginning balance: Estate cash and liquid asset balances at the start of the accounting period (or at the time letters were issued for the estate).
- Receipts / additions: A chronological or categorized list of all incoming funds and property during the period (examples: sale proceeds, rents, interest, dividends, tax refunds, insurance proceeds, proceeds from sale of real estate, values placed on non-cash assets received by the estate).
- Disbursements / expenditures: Detailed list of all payments: creditor claims paid, funeral and burial expenses, administrative costs, attorney and fiduciary fees (if allowed), taxes (estate and income), repairs/maintenance on estate property, mortgage or lien payments, distributions to beneficiaries, and other expenses.
- Ending balance: Cash and asset values remaining at the end of the accounting period (or immediately prior to closing the estate for a final accounting).
- Schedule of assets and dispositions: Inventory of all estate property at relevant times with values (initially and at accounting close), and description of how each asset was handled (held, sold, transferred to beneficiary, etc.).
- Proposed distribution schedule (final accounts only): A clear plot showing who receives what, how distributions are calculated, and the proposed dates of distribution.
- Receipts, releases, and proof of payment: For final accounts, attach beneficiary receipts/releases when property or cash is distributed. For both annual and final accounts, include paid invoices, canceled checks, bank statements, wire confirmations, and closing statements (e.g., real estate closing HUD statements) to support each listed disbursement.
- Inventory and appraisals: Appraisals or valuation statements for significant assets (real estate, stock positions, collectibles). If the estate clerk previously required an inventory, include the inventory submitted and any updated valuations.
- Tax filings and correspondence: Copies of estate income tax returns (federal Form 1041 and Montana state returns if filed), estate or inheritance tax filings (if applicable), and correspondence with tax authorities about assessments or liens.
- Bond and surety information: If the fiduciary posted a bond or is covered by surety, include the bond amount and surety company details and proof the bond remains in place or has been discharged.
- Supporting ledger and transaction detail: A simple spreadsheet or ledger that ties each receipt and disbursement to a source document (bank statement page, check image, invoice number). Courts and beneficiaries typically expect numbers to reconcile to bank statements.
Documents frequently required as attachments
- Complete bank statements covering the accounting period.
- Images or copies of canceled checks and deposit records.
- Brokerage statements showing securities activity and year-end positions.
- Real estate appraisal reports, deeds, and closing statements.
- Invoices and receipts for repairs, funeral expenses, professional fees, and other paid claims.
- Proof of paid claims: creditor receipts, paid-in-full letters, or order approving payment.
- Attorney fee applications and court orders awarding fees (if applicable).
- Beneficiary acknowledgments, receipts, or waivers when distributions are made.
Final accounting: additional items to close the estate
For the final accounting you must show closing of all estate business. In addition to the items above, include:
- A proposed final distribution plan and supporting calculations.
- Evidence that all known debts and legitimate claims were resolved or a statement describing unresolved claims and how they will be handled.
- Proof of payment (or court order approving payment) of fiduciary and attorney fees and expenses.
- Completed tax clearance or documentation that estate tax obligations have been satisfied or properly reserved for.
- Signed receipts/releases from beneficiaries for distributed property or funds whenever possible.
- A closing statement requesting the court to discharge the fiduciary and enter an order closing the estate.
How to present an accounting (format tips)
Courts expect accountings to be clear and reconcilable. A commonly accepted structure:
- Start with a one-page summary: beginning balance, total receipts, total disbursements, and ending balance.
- Provide a chronological ledger or table with these columns: date, description, source/recipient, amount in, amount out, running balance, and reference to supporting document.
- Group transactions by category (assets sold, income, taxes paid, distributions, fees) and include subtotal lines.
- Include an attachments index with a numbered reference so a court reviewer can match ledger lines to supporting documents.
Where Montana law and local courts come in
Montana’s probate statutes govern fiduciary duties, inventories, claims, and court supervision. Local probate courts and clerks may have forms or local rules dictating the preferred accounting format or additional filings. Consult the Montana statutes (Title 72) for statutory requirements and your local county probate clerk for specific filing requirements. Montana Code Annotated, Title 72 is available here: https://leg.mt.gov/bills/mca/title_72/. For court forms and procedural guidance, check the Montana Judicial Branch self-help pages: https://courts.mt.gov/selfhelp.
Helpful Hints
- Start record-keeping immediately. Good organization reduces disputes and speeds the court process.
- Keep originals of critical documents (deeds, signed releases, closing statements) and submit copies with a clear index to the court.
- Label each supporting document with the date and the ledger line it supports.
- Use bank and brokerage statements to reconcile your ledger—courts often request reconciliations.
- If you pay professional fees (attorney, appraiser, CPA), get written fee agreements and itemized invoices to attach to the accounting.
- Ask beneficiaries for signed receipts when you distribute property or cash; that speeds approval of the final account.
- Check whether your county has local probate rules or a required accounting form — court clerks can provide filing checklists and local guidance.
- If the estate is small or assets pass outside probate, Montana procedures may allow simplified filings—ask the clerk or an attorney about summary procedures.
- Retain estate records for several years after closing (many fiduciaries keep records 3–7 years) in case of later tax or beneficiary questions.
- When in doubt about valuation or complex transactions (business interests, closely-held stock, unusual assets), obtain a professional appraisal or accounting help.
When to get help
If accounting numbers are large, if beneficiaries dispute distributions, if claims are contested, or if tax issues arise, consult an attorney experienced in Montana probate. An attorney can prepare a court-ready accounting, help obtain court orders to allow unusual transactions, and represent the fiduciary at hearings.
Disclaimer: This information is educational only and does not constitute legal advice. It summarizes typical accounting components under Montana probate practice and points you to state resources. For advice about a specific estate, statutory deadlines, or to confirm local filing requirements, consult a licensed Montana attorney or the probate clerk in the county where the estate is opened.