Maryland Probate Cases: Accounting and Inventory

An accounting is used in regular estate administration cases. An accounting is a very detailed reporting to the court that lists all of the income, return of principle, changes of assets and any expenses paid during the administration period.

Generally, you file an accounting within nine months from the date of appointment and then every six months thereafter. The accounting is typically prepared by the Maryland probate attorney for the case. Sometimes in estate administration, you can file a first and final accounting. In this way, there is only one accounting that reflects all of the income changes, returns or principle, expenses, and distributions pursuant to the terms of the last will and testament or according to the laws of intestacy.

Information Included in Maryland Accounting

An accounting includes the inventory value of the estate if it is the first accounting. If the accounting is a subsequent accounting, it will include the carryover value from the previous accounting period. The account will then provide all of the income, changes of assets, returns of principle, disbursements or expenses and debts that have been paid. Finally, it includes the distributions, if any, during the accounting period.

An accounting is only required in regular estates. Small estates are generally a more simplified estate proceeding, which do not require accounting.

Filing an Accounting

The Register of Wills provides a sample accounting form. Many attorneys have adapted the sample form and use their own accounting templates. The accounting becomes a matter of public record. Anyone can view the accounting once it has been filed.

Auditors working for the Register of Wills will review the accounting and either request additional information, or present the accounting for approval by the Orphans’ Court.

Using an Accurate Accounting in Maryland Probate Cases

The best way to ensure an accurate accounting is to keep a good record of all of the transactions that the personal representative has made during the course of the administration of the estate. Better record keeping by a personal representative can lead to more efficient preparation of the accounting.  This is the most important step in ensuring that an accounting is accurate.

Inventory of Property and Interests

An inventory is used to provide a date of death value of all of the assets in the probate estate. The rules for valuing assets as of the day of death are dependent on the nature of the asset itself. For example, real estate is valued by an appraiser, while a personal representative can value bank accounts or stock holdings independently. The inventory will list all of the assets that the decedent owned in his or her sole name on the date of death that do not have a joint owner or beneficiary designation.

Regular Maryland estates that have not been converted to a modified administration do require an inventory. Small estates do not require an inventory.

If Decedent Dies Without a Will

If a decedent died without a will, then an estate will be distributed pursuant to laws of intestacy. The nature of the decedent’s assets and the heirs the decedent leaves will determine or dictate the amounts, the percentages and who will receive the estate.

Administrative probate is the most common and occurs when there is clarity for who shall serve as a personal representative. Judicial probate is used when there is some sort of issue in a case that cannot be resolved without a hearing. For example, judicial probate may be required if none of the individuals named to serve in the last will and testament are able to serve. Judicial probate may also be initiated if an interested person challenges the appointment of the personal representative.

How a Maryland Probate Lawyer Can Help

In Maryland, an attorney can assist you by recommending appraisers for real property and tangible personal property. They can also assist you in valuing the stock or determining the date of death values of bank and brokerage accounts. It is best to provide any information you have regarding an asset to an attorney so that they can properly determine the date of death value.

Additionally, an accountant may assist with valuing partnerships, closely-held businesses or family businesses. Determining the date of death value for an asset is unique to the type of asset. It may be helpful to consult with a Maryland probate lawyer who is familiar with the valuation rules both for probate and the Maryland and/or federal estate tax laws. An attorney can assist you in preparing for any hearing if there is one and assist you during the judicial probate process. A Maryland probate attorney can represent you at any required hearings and advise you of your duties as either special administrator or personal representative.