What law governs accountings in Texas?

Texas law sets standards and procedures for fiduciary accountings under the Texas Estates Code. For the statutory rules governing accountings, see Texas Estates Code, Chapter 309 (Accountings): https://statutes.capitol.texas.gov/Docs/ES/htm/ES.309.htm. County probate courts may also impose local rules and specific form requirements.

Overview — Purpose of the accounting

An accounting gives the court and interested persons (heirs, beneficiaries, creditors) a clear, verifiable record of how the estate’s or ward’s money and property were handled. It must show starting balances, all receipts and disbursements during the accounting period, and ending balances, and it must be supported by documentation (vouchers) and, when required, verified under oath.

Core documents required for annual and final accountings

The list below covers the documents you should prepare and attach. A court may require additional materials depending on complexity, contested issues, or local practices.

• Formal accounting or Statement of Receipts and Disbursements

  This is the principal filing the court reviews. It must be itemized and typically includes:

  • Beginning (opening) balances for each account and asset at the start of the accounting period;
  • All receipts during the period (rents, dividends, sale proceeds, life insurance paid to the estate, loan collections, etc.);
  • All disbursements during the period (payments to creditors, taxes, attorney fees, distributions to beneficiaries, administration expenses, bond premiums, etc.);
  • Ending balances at the close of the accounting period; and
  • Explanation of any transfers or nonprobate receipts (beneficiary-designated life insurance, transfer-on-death accounts, jointly owned property).
• Inventory and schedule of assets (with valuations)

  Although the timing and name vary, you should include a complete list of estate assets (real property, bank and brokerage accounts, business interests, vehicles, personal property) and a valuation for each. Historic valuations showing value at date of death (or at the start of the accounting period) and current values help explain changes. Appraisals or broker statements should support valuations when values are material.

• Bank statements and brokerage confirmations

  Provide copies of bank and brokerage statements that cover the accounting period(s). These are essential for reconciling the account totals and proving receipts and disbursements.

• Cancelled checks, paid invoices, receipts, and vouchers

  Attach copies (or a representative, itemized voucher list) of checks and receipts for significant payments: creditor payments, funeral expenses, repairs, insurance premiums, taxes, attorney and accountant fees, and distributions to beneficiaries. Texas rules expect supporting vouchers for material disbursements.

• Sale and closing documents

  If estate assets were sold (real estate, business interests, securities), attach sales contracts, HUD-1/closing statements, settlement statements, and proof of distribution of proceeds.

• Appraisals or valuations

  Provide professional appraisals for real property or valuable personal property when required or when values are disputed or substantial.

• Tax returns and tax payment records

  Include copies of estate fiduciary income tax returns (Form 1041), federal estate tax returns (if filed), and receipts showing payment of estate, income, or inheritance taxes. Courts expect an accounting of tax liabilities and proof they were resolved or reserved for.

• Creditor claim disposition and proof of notice

  Show which creditor claims were presented, allowed, rejected, and paid, and provide proof of notice to creditors or to those entitled to notice under the Estates Code.

• Proposed distribution schedule

  For a final accounting, include a proposed distribution schedule describing exactly what each beneficiary will receive, with calculations. Attach receipts or releases from beneficiaries when distributions are made.

• Bond and insurance information

  Provide records showing the fiduciary bond (if any), bond premiums paid, and insurance proceeds and payments tied to estate administration.

• Fiduciary fees and attorney fees detail

  Itemize compensation requested for the personal representative, guardian, or attorney, and provide supporting invoices, time records, or statutory computation worksheets as the court requires.

• Oath or verification

  Accountings generally must be sworn or verified by the fiduciary (or verified by an affidavit) under Texas law before the court accepts them.

Specific differences: annual vs. final accountings

Annual accountings (if the court orders them or for guardianships) are periodic snapshots: they need to show activity during the period and supporting documentation for the items listed above limited to that period. A final accounting is comprehensive and must:

• Cover the entire administration from qualification to closing;
• Resolve claims and tax liabilities or show reserves for them;
• Explain and document all significant transactions, sales, and distributions; and
• Include a proposed order of final settlement and a request that the fiduciary be discharged and released from further liability once distributions are made.

Format and best practices required by courts

• Present a clean, chronological accounting or a standard accounting form your probate court accepts.
• Reconcile the accounting totals to the supporting bank/brokerage statements and highlight any reconciling items.
• Label and paginate exhibits; cross-check each line item to a voucher, canceled check, or statement.
• Explain large or unusual items in a short narrative or footnote.
• Serve the accounting on all interested persons and file proof of service with the court per local rules and the Texas Estates Code.

Practical checklist before filing

1. Gather bank and brokerage statements covering the period.
2. Collect canceled checks, receipts, paid invoices, sales closings, and appraisals.
3. Run or create an itemized Statement of Receipts and Disbursements that reconciles to statements.
4. Prepare a proposed distribution schedule (for final accounting).
5. Assemble tax returns, creditor records, bond information, and fee documentation.
6. Attach vouchers and exhibits; label them clearly and paginate the package.
7. Verify or sign the accounting under oath and arrange service on parties and filing with the court clerk.

Helpful Hints

• Keep original supporting documents and provide certified copies on request; courts often review originals if required.
• Use a spreadsheet to track every receipt and disbursement with dates, check numbers, and recipient names — this speeds reconciliation and supports the accounting.
• Get appraisals for high-value or unusual items early; they prevent later disputes over valuation.
• Keep clear records of nonprobate assets and beneficiary-designated proceeds; state these separately in the accounting.
• Save copies of any notices sent to creditors and beneficiaries and proof of service to the court.
• If taxes are owed or likely, consult a tax professional before distribution; you may need to withhold or reserve funds for tax liabilities.
• When distributions are made, obtain signed receipts and releases from beneficiaries to document final settlement.
• If the estate or accounting will be contested, consult a probate attorney early — account preparation changes when litigation is expected.