USER GUIDE - d2oc0ihd6a5bt.cloudfront.net · Estate Accounting User Guide 1 ... Estate Accounting User Guide 3 Chapter 1: ... income tax on terminal return and /or capital gains;

Estate Account and Tax

USER GUIDE

Estate Accounting User Guide

1

Table of Contents

CHAPTER 1: INTRODUCTION ...................................................................................... 3 Introduction to Estate Accounting ............................................................................................. 4 What is Estate Accounting? ....................................................................................................... 4

Statement of Original Assets ............................................................................................................. 4 Original Liabilities ............................................................................................................................. 4 Capital Receipts (CR) ....................................................................................................................... 5 Capital Disbursements (CD) .............................................................................................................. 5 Revenue Receipts (RR) ..................................................................................................................... 6 Revenue Disbursements (RD) ........................................................................................................... 6 Investment Account ......................................................................................................................... 6 Schedule of Compensation ................................................................................................................ 7 Capital (Assets) ................................................................................................................................ 7 Revenue (Income) ........................................................................................................................... 7 Care and Management ..................................................................................................................... 8

CHAPTER 2: GETTING STARTED .................................................................................. 9 Using Estate Accounting for the first time ...............................................................................10 Contact Cards ...........................................................................................................................11 Creating a New Estate File .......................................................................................................12 Entering Information about the Estate ....................................................................................13

Matter Tab .................................................................................................................................... 13 Estate Tab ..................................................................................................................................... 13 Original Assets Tab ........................................................................................................................ 14 Beneficiary Tab .............................................................................................................................. 15 Trustee Tab ................................................................................................................................... 15 Contact Tab ................................................................................................................................... 16 Notes Tab ..................................................................................................................................... 16 Timekeepers Tab ........................................................................................................................... 16

CHAPTER 3: ACCOUNTING INFORMATION ...............................................................17 Original Assets and Liabilities ..................................................................................................18

Sort Field ...................................................................................................................................... 19 Num ............................................................................................................................................. 19

Slips ..........................................................................................................................................19 Date Validation .............................................................................................................................. 19 Enter Original Assets using the Asset Slip (Original Asset button) ...................................................... 20 Bank Accounts (Original Asset button) ............................................................................................ 20 Original Assets with Accrued Interest .............................................................................................. 21 Enter Original Liabilities .................................................................................................................. 22

Entering Assets when not using Slips ......................................................................................22 Realizing Original Assets ..........................................................................................................25

Cash and Bank Accounts ................................................................................................................ 25 Other Types of Receipts ................................................................................................................. 26 Assets with Accrued Interest .......................................................................................................... 26 Full or Partial Disposition ................................................................................................................ 27

More Slips Feature ...................................................................................................................28


2

Transactions .............................................................................................................................31

CHAPTER 4: CONTINUING ADMINISTRATION OF THE ESTATE.................................35 Continuing the Administration of the Estate ...........................................................................36

Investments in the course of Administering the Estate ..................................................................... 36 Maturing GICs/Bonds ..................................................................................................................... 37 Sale of Investments ....................................................................................................................... 38 Quick Entry – Using Recurring Loan Payment to the Estate as example ............................................. 38

Sample Transactions ................................................................................................................40

CHAPTER 4 – REPORTS .............................................................................................42 Generating Estate Reports .......................................................................................................43

CHAPTER 5 – BALANCING ACCOUNTS ......................................................................45 On Screen Summary .................................................................................................................46 On Screen Reconciliation .........................................................................................................46 Account Balance .......................................................................................................................47 Balancing Assistance ................................................................................................................47

Printing Reports ............................................................................................................................. 47 Review Bank Account month by month ........................................................................................... 47 Review Summary report month by month ....................................................................................... 48

Data Entry Errors ......................................................................................................................48 Empty Fields ................................................................................................................................. 48 Incorrect Dates ............................................................................................................................. 48 Report Date Filters ......................................................................................................................... 48 Duplicate Transactions ................................................................................................................... 48 Identifying Asset with an Issue ....................................................................................................... 49 Incorrect Transaction Types ........................................................................................................... 49

CHAPTER 6 – SPECIAL FEATURES .............................................................................50 Archive (Defining the Start Date) ............................................................................................51 Entering Files with Previous Accounting Periods (Bring Forward) ..........................................52 Calculators ...............................................................................................................................54

Interest Calculator ......................................................................................................................... 54 Calculator ...................................................................................................................................... 55 Foreign Tax Calculator ................................................................................................................... 55

Copy Estate to/from Disk .........................................................................................................55 Cheque History .........................................................................................................................56 Transaction Screen Options .....................................................................................................56


3

Chapter 1: Introduction


4

Introduction to Estate Accounting

Welcome to Estate Account and Tax – the estates software solution from Emergent Technologies. Estate Account and Tax produces Estate Accounts in Court Passing format, Income and Capital Tax

Schedules, a variety of Investment Reports and many more accounting schedules and balancing reports.

Using this guide as a reference tool, you will be producing balanced estate accounts with all the necessary documents quickly and easily. And best of all, you will have an electronic record of everything.

This document should only be used in concert with advice from an Estate Accounting authority. Emergent will not be held liable for the use or misuse of the information contained in this document, without limitation.

What is Estate Accounting?

Estate accounting is a method of accounting used for the administration of estates, trusts and guardianships. Estate trustees and guardians have a duty to keep a complete and accurate set of

accounts of their administration for beneficiaries to review upon request. The format for these accounts may vary depending on their purpose. For example, if the accounts are being passed before

a court they must have separate capital, revenue and investment accounts, together with a list of

original assets and investments held by the estate at the beginning and end of the accounting period. If the accounts are being provided to a client, a somewhat more simplified format may be

acceptable.

The following is a breakdown of the different components of “court passing” accounts used by the Office of the Public Guardian and Trustee for estates and guardianships. Examples for both estates and

guardianships are shown.

Statement of Original Assets

For an estate matter, this is a list of the assets held by the deceased at the date of death, along with

their associated market or probate values.

For a guardianship, this is a list of the assets held by the incapable at the date of declaration of incapacity, along with their associated market values.

These values are fixed at this date and, as a rule, will not change throughout the administration. This

schedule will not normally include those assets jointly owned with a right of survivorship, (e.g. matrimonial home, a joint bank account) or assets payable to named beneficiaries, (e.g. a life insurance

policy held by the deceased, but payable to a friend or relative).

Note: Included in the original assets of an estate are calculations of interest accrued and owing to date of death and also any shares quoted ex-dividend at date of death, i.e. dividends that are declared but not

paid.

Original Liabilities

Most people have some liabilities that remain unpaid at the date of death. Each liability source

encountered should be recorded in the appropriate secured, unsecured, commercial or contingent


5

liabilities. The creditor’s name and full disclosure of the debt particulars known are required together

with the amount of debt outstanding plus accrued interest at the date of death for completeness purposes.

NOTE: For faster data entry on the Asset and Transaction Screens, enter dates using the format mmddyy

(no slashes or spaces required).

Capital Receipts (CR)

Capital receipts are funds realized from the sale of original assets. Some examples are:

proceeds from the sale or redemption of stocks and bonds owned by the deceased at

death; proceeds from the deceased’s bank accounts;

life insurance payable to the estate;

Canada Pension Plan Death Benefit1;

accrued interest2 on bank accounts, term deposits, bonds and mortgages;

ex-dividends3;

adjustments on sale of investments by the trustees (capital gains).

There will be times when it is necessary to enter a Capital Receipt that is unrelated to any estate asset. We will refer to these as Capital Receipts - No Assets. Some examples are:

refunds from phone plans;

driver license refunds;

cable fee refunds.

Capital Disbursements (CD)

Capital disbursements are payments made from the estate on account of debts of the deceased, the estate, distributions to beneficiaries and expenditures made by the estate. Some examples are:

payment of credit card accounts and car loans;

funeral expenses, burial and cemetery costs;

probate fees;

fee for provincial death certificate;

legacies to beneficiaries;

distribution of residue;

legal accounts for estate administration;

income tax on terminal return and /or capital gains;

appraisal and valuation expenses;

adjustments on sale of investments by the trustees (capital losses).

For guardianships, examples of capital disbursements could be:

principal portion on mortgage payment;

1 Although considered a capital receipt for estate accounting, CPP Death Benefit is taxed in the hands of the executors, i.e. it is treated as capital

for estate accounting purposes and revenue for tax purposes. 2 Accrued interest is calculated from the date of the last interest payment up to and including the date of death. 3 Dividends declared but not paid at the date of death are considered capital for estate accounting purposes.


6

medical expenses;

nursing home costs.

Revenue Receipts (RR)

Revenue receipts are funds earned on original assets, as well as income earned on investments made

by the trustees after the date of death. Some examples are:

dividends declared after death;

interest earned on bank accounts;

interest on Canada savings bonds, GICs, Treasury Bills ;

rents received from estate property;

interest on life insurance policies paid after death.

For guardianships, examples of revenue receipts would be:

pension payments i.e. CPP and OAS;

annuity payments;

income from RRIFs;

credits.

Revenue Disbursements (RD)

Revenue disbursements are payments made by the trustees out of the revenue account. Some examples

are:

payment of income to an income beneficiary;

payment of expenses incurred in the earning of income, e.g., investment management

fees; taxes on income retained in the estate;

bank charges (including safety deposit box rental);

accrued interest on purchase of bonds/GICs/term deposits4.

For guardianships, examples of revenue disbursements would be:

interest portion on mortgage payment;

medical expenses;

nursing home costs;

income tax installments.

Investment Account

The investment account reflects details of any investment or reinvestment of funds made by the

trustee during the administration of the estate or guardianship. Details of purchases and sales of

investments are recorded here.

4 This type of accrued interest occurs when investments are purchased by the trustee at a later date than the investment became available. In such a case the estate would have to purchase, not only the principal but also the interest already earned on the investment


7

Note: Gains or losses arising from the sale of investments are shown in the capital account, i.e.

capital receipts for gains and capital disbursements for losses.

The investment account should also reflect the conversion or exchange of one class of securities for another, as well as redemptions and reissue by corporations5.

The investment account does not include original assets6.

Schedule of Compensation

The Court determines the rate of compensation paid to trustees. However, a “rule of thumb” has

evolved over time to enable trustees to calculate compensation on an “average estate of average complexity”.

There are three areas where compensation is calculated:

Capital (Assets)

Compensation is calculated from capital receipt and disbursement transactions during the period, usually

at 2.5% of the total, excluding balances brought forward and book transfers7. The Court has the discretion

to adjust this rate down where the receipts include transactions of large values resulting in an award of a lower amount of compensation than that claimed in the accounts.

Example: One of the original assets of an estate with a total value of $2,000,000 is a shareholding with a

date of death value of $1,500,000. The Court would probably reduce the compensation allowed on a receipt of an item this size from the usual rate of 2.5%.

The Court does not usually allow a trustee to claim compensation on items such as:

payment of fees for the preparation of income tax returns;

capital losses;

payment for work done on Trustee’s behalf;

prior compensation payments to an executor/estate trustee.

Compensation is not payable or calculated on the investment account. The compensation for these

receipts and disbursements is calculated separately (see Care and Management).

Compensation is not calculated on unrealized original assets within the period. Rather, it is taken at the time of their sale (or realization) when the value is reported as a capital receipt.

Revenue (Income)

Compensation is calculated from the revenue receipt and disbursement transactions during the period

usually at 2.5% of the total, excluding balances brought forward and book transfers.

5 Stock splits must be reflected in both the capital receipt and investment disbursement sections of estate accounts 6 Original assets such as stockholdings, bonds, GICs were investments made by the deceased while alive. After death, these personal investments become original assets of the estate and are no longer considered to be investments. Estate investments are only those investments made by the trustees during the administration of the Estate.

7 Recording entries including disbursements to a sub-trust or capitalization of revenue are examples of book transfers


8

Care and Management

The rule of thumb established for care and management allows for 2/5 of 1% of the average annual

market value of the estate during the period.

Generally, care and management fees can only be calculated on assets which require “care and management”, i.e. where bonds or GICs are being renewed or shares are being bought and sold. If no

active investing occurs, notwithstanding that income may be generated, the value of these shares

and other “inactive” assets should not be included in the care and management calculation.

The Court requires that the valuation of those assets included in the calculation for care and management

be provided in order to justify the compensation being claimed.

If GST is payable on the compensation, a separate item showing the GST calculation should appear on

the Schedule of Compensation.

Changing the Compensation Rate

You can set the rate of compensation across the entire estate or individually per transaction. Go to File

then Maintenance and choose Compensation to change the rate across a whole estate (the default rate for

new estates is 2.50%).

To change the compensation rate per transaction, go to the transaction screen and change the compensation rate for the transaction record.


9

Chapter 2: Getting Started


10

Using Estate Accounting for the first time

From this screen, you can create a new estate, edit an existing one or access the Report Options screen.

The dates shown on this screen represent the following:

Edited: Last date that the estate was updated

Archive: Start date of the previous accounting period

Start: Start date of the current accounting period Death: Date of death

Accounting: Is this file licensed for Estate Accounting? Administration: Is this file licensed for Estate Administration?

The Show Matters dropdown will display all open files. Switch the status to Closed to view closed files. To see all files, regardless of status, switch the list to All. The file status is set on the Matter tab next to

the status drop down.

To commence a new matter, click on the Accounting button and choose the size of the Estate required. Click OK and paste the Licence Key provided by Emergent.


11

Contact Cards

Estate Accounting uses a centralized contact database to store information on the contacts (people or companies) that have a role to play in an estate. Once contacts are entered into the contact database

they can be assigned to play many different roles within an estate or over many estates.

Once you are on a field where a contact should be entered, simply type the name of the contact into the field, last name, then first. If that contact already exists in the database Estate Account and Tax will

locate it and complete the name, and you can move on to the next field. If the contact does not

already exist, Estate Accounting will ask you to quick add the contact.

You will see the following:

Any contact must be added to the database, even if you only plan to use them once. Select Yes to add

the contact and No to change the contact information. The Quick Add New Contact feature appears. At this point

The General Tab allows you to enter address and phone information for the contact


12

Click on the Full Name button to make any changes to the name. The format of the contact name in this

field defines the name used in documents and should be entered as required by documents. Change Name will record former names in the event of marriage, divorce or adoption.

The Details Tab provides space for municipality, region and occupation and any other information

required.

After selecting OK, you will see the new contact available in a drop down list. You must select the

contact from the drop down list, even if it is already in the deceased field.

To add or edit information about the contact, right mouse click on the contact name and select Open

Contact.

Creating a New Estate File

To enter a new estate, click on NEW and choose the size of the Accounting matter needed.


13

This is the Estate screen where all the relevant information about an estate is stored (apart from

accounting information).

Clicking on the various tabs along the top of the Window will show different pages containing information fields pertaining to that aspect of the estate. Fill in as much information as you can using

the following as a guide for data entry:

Entering Information about the Estate

The following section will guide you through entering estate information for the purpose of administration. Depending on the Estate, some Tabs may require more or less information.

Matter Tab

Deceased – Enter the name of the deceased person, last then first. If Estate Accounting does not

complete the name automatically, then you must add the contact to the contact database as outlined

above.

File Number – This field is required and can either be a reference to the name of the Estate or the file number.

Estate Tab


14

Report Heading - The data entered in this field will be printed on the header of any accounting reports

produced by Estate Account and Tax . (Eg: The Estate of Bob James or The Estate Accounts of Bob James).

Report Subheading - Text entered in this field will be printed on the header of any accounting

reports, underneath the Reporting Heading. (Eg: Canadian Funds)

Death / Start Date - Enter the date of death or start date for the accounting period in the format mm/dd/yy. This is a required field.

Will Date - Enter the date of execution of the will.

Jurat -The default jurat will appear on all affidavits. It will default to the city of death but is editable by

the user. To change the default jurat to your jurat, select File > Maintenance and “Set Default Jurat Text”

Court – The court city for probate forms must be selected from the drop down of available courts. If the

court is not yet available in the dropdown list type the name in the empty field. You will be prompted to Quick Add the court to contacts. Select Yes and complete the necessary information, such as address

and phone numbers. That court location will then be available to all users for future use.

Original Assets Tab

All Original Assets and Original Liabilities should be added to a matter. Totals of Assets, Liabilities and a Grand total of the estate will appear on the screen. See Original Assets and Liabilities for more information.


15

Beneficiary Tab

Beneficiary - Each beneficiary will occupy one sub-record of the Beneficiary Page. Beneficiaries can be added to the contact records by right clicking on the next blank record and choose Add Contact or Quick Add Contact. Beneficiaries can also be added during the course of administering the Estate at the

distribution stage.

Relation – Use the dropdown to specify the relationship between the beneficiary and the deceased.

Type – Either Beneficiary, Legatee or both. If this field is left blank, beneficiary is assumed to be the type.

Class - This is where you will assign a distinguishable class to a beneficiary (ie. minor, incapable w/guardian, incapable w/out guardian, charity, other).

Trustee Tab

Trustee – Each Trustee will occupy one sub-record of the Trustee Page. Right click to open the contact

card and Update the Trustees Region, Municipality and occupation to complete affidavits


16

Contact Tab

Personal Relations – Enter contacts related to the Deceased and their Relationship.

Offices – Enter contact information for courts, or other government offices in this field.

Banks – Enter the bank name and account number

Notes Tab

Enter notes about the estate in the format you would a “memo to file”.

Timekeepers Tab

Enter the names of the lawyers, clerks and assistants that will be working on this file.


17

Chapter 3: Accounting

Information


18

Original Assets and Liabilities

Types of Assets NOTE: Always assign a CLASS to every asset so that Assets are grouped properly in reports.

List of Asset Types

Type 1 Type 2 Type 3 Type 4

Original Assets

Deceased owned asset or right to asset before date of death

VALUE: always enter the probate value (i.e. market value at death)

Investments Brought Forward

Use when entering an after date of death investment with a previous accounting period

Investments in Period

Use when entering an investment made after date of death

VALUE: 2 STEP PROCESS

1) enter with $0.00 balance

2) enter transaction showing funds invested

Estate Accounts

A bank account or brokerage account opened for the Estate

VALUE: Must always be $0.00

Type 5 Type 6 Type 7 Type 8

Investments Brought Forward

Use when entering an account with a previous accounting period ~ Capital Balance

~ Revenue Balance

~ Investment Balance

Care and Management

THIS IS NOT AN ASSET

Enter the average market value of all investments under administration

Original Liabilities

Deceased had liabilities before date of death Type 6 Capital Disbursement transaction to reduce liability

Trustee Liabilities

Liabilities acquired by a trustee after date of death VALUE: Must always be $0.00

Type 6 to increase liability

Type 5 to reduce liability

List of Asset Classes

Assets Investments Bank Accounts Liabilities Bonds B Canadian Shares CS Bank Account E Business Loan BL Commercial Paper C Debentures D Investment Account I Commercial Credit Liab. CL Cash CA G.I.C. G Income Account IA Contingent Liabilities NL Federal Bonds FB Mutual Funds M Trust Account TA Notes Payable NP Life Insurance Policies L Mortgage Receivable MR Promissory Notes P Other Assets O Shares S Secured Liabilities SL Provincial Bonds PB Short Term Inv. ST Unsecured Liabilities UL Personal Effects PE Treasury Bills T Real Property R Term Deposits TD Bankers Acceptance BA U.S. Shares US

All Original Assets or liabilities can be entered either directly on the grid or by using the Original Asset slip.

Enter the values as of date of death. The date of death is automatically entered and the next button allows for the efficient entry of many items. When all entries have been made, click OK.


19

Sort Field

Each time a new asset is created the Asset Number will increase by one. The Sort Field default value is

also this number. The Sort Field is valuable for changing the order in which assets appear on accounting reports.

When a Statement of Accounts is printed, all of assets with the same Type will be displayed under the

heading. You can define the order of the assets by changing the value of the Sort Field.

NOTE: The Sort Field can take up to 2 decimal places.

Num

Each new asset that is added is given a number that increases incrementally. This is a reference number that will never change or be overwritten.

Asset Class

When presenting a set of accounts, it is appropriate to group assets under subheadings. For example: if

an estate contained a car, jewellery, artwork and furniture, then all of these separate assets could be grouped under the subheading “Personal Effects”. Such subheadings are referred to as Class Types. Estate

Account and Tax comes installed with a comprehensive list of Class Types and the option is available under

the Tools menu for the user to add more as required.

To assign a Class Type to an asset, open the Class dropdown list, select the desired Class type and press ENTER.

Slips

Estate Account and Tax Slips are designed to be similar to bank slips to help enter assets and make

processing of transactions easy and quick.

Date Validation

All Estate Account and Tax Slips will verify the date entered. If the date is either before the start of the accounting period, or after today's date, a notice will appear. This feature will prevent date entry


20

errors from occurring. However, if you still want to use the date, simply choose OK and the transactions

will be processed

Enter Original Assets using the Asset Slip (Original Asset button)

Original assets are assets owned by the estate at date of death and include stocks, bonds, cars, etc. They also include cash in bank accounts at date of death. Click the Original Asset button to activate

the Asset/Liability Slip.

Note: Each Asset should have its own entry. For example, do not make one entry for three GICs.

Type – This will define the item as an asset or liability. Use the dropdown for asset (type 1) or a liability (type 7). Other types are available, but will only be accommodated in the accounting section of

the application

Probate Fee – Estate Account and Tax will calculate the probate fee for the default jurisdiction. Enter all Estate assets to calculate the appropriate fee

Class – The class defines what type of Asset it is. Select the appropriate class that best describes the

asset. For Real Estate, select the class that has the appropriate province which defines the location of the property.

Date - Enter the date of death in this field.

Units - For Assets with units, such as stocks or Mutual Funds, enter the number of units of the field

provided. For assets that do not have units, leave this field blank.

Description - Enter the description of this asset or liability. Double click on this field for a larger text box if you need more space to enter information.

Value – Enter the value of the Asset or Liability at the date of death

Bank Accounts (Original Asset button)

Enter all Bank accounts that the estate had open at the date of death. When the Asset is defined as a

Bank Account or Cash activate the tickbox if the bank account will be used as an Estate Account, and a second entry will automatically be created with the Class as E for later use. If you plan to open a new

separate account to manage the Estate, do not activate the tickbox and then create the separate account

as outlined below.


21

Broker, Investment and other types of accounts can also be added at this point. It is strongly recommended

to create a holding account to process “in/out” transactions from dividend reinvestments or roll - overs. Additional accounts can be added at any time in the future by clicking the More Slips dropdown and

choosing Create Estate/Investment Account. The opening value should be $0.00.

Once you have entered all of your original assets, print the unrealized original assets report. Set the

end date to one day after the death date. Compare this report with the information you have. It should be identical.

NOTE: Type 1 Bank Accounts are listed in the description field and define where the cash is. However,

they do not function as bank accounts, but only represent the original asset of cash and must be realized (transferred) to the Estate Bank Account. Bank Accounts to be used for Estate purposes must be Type 4

Bank Accounts.

Original Assets with Accrued Interest

Some Assets, such as GICs, or Savings Bonds have regular payments of interest prior to maturity. When

entering these Assets, there will be a further step offering to calculate the accrued interest as a separate Type 1 Original Asset covering the period from last interest payment date to the Date of Death. Enter the

details in the usual manner and click OK.

A further screen appears asking if Accrued Interest should be calculated. If necessary, click YES.


22

A second Type 1 Original Asset entry will be created for the interest accrued to the date of death.

Enter Original Liabilities

Not all estates have amounts owing at the date of death. If there are no Original Liabilities do not

complete this step.

Type 7 – Original Liabilities

Class –

o CL Commercial Credit Liabilities (such as a loan for business purposes)

o NL Contingent Liabilities (a possible liability depending on future circumstances) o SL Secured Liabilities (mortgage or car loan)

o UL Unsecured Liabilities (credit cards) Date – Date of Death

Value – Value of liability at date of death

Once you have entered all of your original liabilities, print the unrealized original liabilities report.

Set the end date to the day after the death date. Compare this report with the information you have. It should be identical.

Entering Assets when not using Slips

Each Asset of an estate is recorded on this screen and takes up one full line. When you open the Accounting

screen Estate Account and Tax provides you with a blank record field. To enter a new asset, use the Record Selector at the bottom of the window or scroll down to the bottom of the page to reach the blank

record field.

To enter a new asset you must complete the Type field and the Value field. The following guide will help you complete the information fields on the asset screen:

Date

Use this field to enter the date that the asset became part of the estate. For original assets, this will be

the date of death. For investments, this will be the date the trustee purchased the investment.


23

Dates must always be entered with the format mmddyy.

Asset Description

The Asset Description field is where information describing an asset is entered. The description entered

here will appear in the accounts.

Asset Description Change

The description of an asset can be changed either directly on the Asset Description line, or double-click on the Asset Description if more room is required for the description.

Value

The Value field for an asset is a numeric field. The value entered will depend on the asset type given to

the asset:

Original Assets (Asset Type 1) the probate value (market value at date of death) of the asset Investments in Period (Asset Type 3) - always $0.00 Bank Accounts in Period (Asset Type 4) - always $0.00 Care and

Management (Asset Type 6) enter the average market value of investments under administration.

Original Liability (Asset Type 7) the value of the liability at the date of death

Trustee Liability (Asset Type 8) – always $0.00

Asset Type Field

This field is where the asset is defined for estate accounting purposes. All personal belongings, investments, bank accounts and investments made by trustees after an estate comes into existence are

considered to be Assets of the estate. Generally speaking, all assets of an estate are either original assets (held at date of death) or investments (purchased after death).

Estate Account and Tax categorizes assets using the following types that appear in the dropdown list for

this field:

Asset Type 1 - Original Assets

Choose this if the deceased owned the asset or the right to the asset at the time of death.


24

Asset Type 2 – Investments Brought Forward

This Asset Type is used when you are entering accounts for a file that has a previous accounting period.

Asset Type 3 - Investments in Period

Use this Asset Type when entering investments made by the estate trustee. A separate asset must be set

up for each investment in the period in order for Estate Account and Tax to calculate any gains or losses and keep track of the book value of the investment.

Entering an investment asset is a two-step process; First, the asset must be entered (when entering an

investment always enter a value of $0.00 in the value field).

Then, an Investment Disbursement transaction must be entered to show that funds from the estate account were invested. For more information about entering transactions, see the next section.

Asset Type 4 - Estate Accounts

Choose this type if the asset is a bank or brokerage account opened for the estate. The value given to

assets with this Asset Type must always be $0.00.

NOTE: Every Estate file must have at least one Asset Type 4. Estate trustees will often use as an estate account a bank account that the deceased used before death. If this is the case, this bank account will

have to be entered into Estate Account and Tax twice: Once as an Original Asset (Asset Type 1) with a value of the balance of the account at the date of death, and once as an Estate Account (Asset Type 4)

with a value of $0.00. See the next section for the transactions necessary to deal with this situation.

Asset Type 5 - Balances Brought Forward

This Asset Type is used when you are entering accounts for a file that has a previous accounting period.

Balances for assets like revenue, capital or investment

Asset Type 6 - Care and Management

This is not an asset. Estate Account and Tax will calculate the Care and Management amount for inclusion on the Compensation Schedule. Simply enter an asset with an Asset Type of 6, a date within the accounting

period and the average value of monies under investment throughout the accounting period. WindUp will calculate 2/5ths of one percent of this amount and add it to the Compensation Schedule.

Asset Type 7 – Original Liabilities

Choose this if the deceased had any liabilities at the time of death.

Asset Type 8 – Trustee Liabilities

Use this type when money is being sent from the estate to a trustee.

All of the above fields contain information that is essential to either the accounting or the layout of the

estate accounts. While some of these fields are optional, as a safety precaution, Estate Account and Tax will not allow you to move from one asset to another unless the Type and Value fields have been completed.


25

Realizing Original Assets

Types of Assets Transactions

Type 1 Type 2 Types: 3, 4 & 5

Revenue Receipts Funds earned on original assets Income earned on investments made by trustees after death date

Revenue Disbursements

Funds disbursed by trustees out of revenue account after death date

Capital Receipts

Funds realized from sale of assets. Note: Using Types 3, 4 & 5 ~ Type 3 when “entire” asset sold. ~ Type 4 when “portion” asset sold. ~ Type 5 when receipt not linked to an asset. Enter in Bank Account VALUE: Actual amount received

dividends declared after date of death income paid to beneficiaries proceeds sale of stocks

bank interest management fees 2/3 Capital – 1/3 Revenue proceeds Est. Bank Acct.

GIC interest tax preparation fees life insurance payable Estate

Bond interest income taxes Canada Pension Benefit

T-Bill interest bank charges accrued interest before date of death

rental incomes safety deposit box rent ex-dividends before date of death

life insurance interest interest mtge. payment income from CPP

income from annuities medical expenses income from OAS

income from RRIFs nursing home costs

foreign interest legal fees for administration

foreign dividends

credits

Most common asset transactions follow one of these steps. You do not need to realize all original assets before proceeding to next steps. In fact, some original assets may not be sold for some time.

In all cases, either the Deposit/Sale Slip can be used or click on the Trans Button to record transactions.

Note: Using the DEPOSIT/SALE and CHEQUES/PAYMENTS Slip result in a “one-step” transaction.

Entering information directly to the grid is a “two-step” process, enter the asset information and then enter the necessary information once again on the corresponding Bank Account.

Cash and Bank Accounts

For example, a Type 1 Original Asset was created for cash found in the residence of the Deceased, which

then should be deposited into the Estate Account. For this example, a separate Estate Account was

created rather than using an existing bank account, but either method is correct.

To realize the Cash Found in Residence asset into the Estate Account, click on the Deposit/Sale button to display the Deposit Slip, enter the necessary information and click Next for further transactions or OK to


26

finish. Use a Capital Receipt (No Asset) when money is deposited into the estate which is not associates

with an asset, such as Newspaper subscription refund

Click the Trans button to view the details of the transaction

Other Types of Receipts

1 Revenue Receipt

1A Interest - Revenue

1B Dividends - Revenue

1C Foreign Interest Revenue

1D Foreign Dividends - Revenue

3 Capital/Investment Receipt (Total Sale)

4 Capital/Investment Receipt (Partial Sale)

Assets with Accrued Interest

If the Asset was not created with a separate entry for accrued interest, divide the Transaction as Type 1A

for the interest on the Asset prior to date of death and Type 3 (or 4) as the total or partial sale of the Asset.


27

Full or Partial Disposition

Type 3 for the full amount or Type 4 for partial disposition. There are no capital gains on original assets. If there is a loss on the investment, it will be recorded in the Statements of Account automatically.

Distribution to Beneficiary

If the Beneficiary is receiving cash from an Estate bank account, use the Cheque/Payments button and

enter the cheque information. To distribute a specific Asset to a Beneficiary, choose the More Slips and Asset Distribution to Beneficiary

This Slip allows for the realization of an asset and distribution of the proceeds to a beneficiary. Define

the Date of the transaction, the transaction type, bank account, asset, beneficiary and amount to complete this transaction. Estate Account and Tax will dispose of the asset and complete a capital

distribution to the beneficiary. Since Estate Account and Tax expresses all items in dollar values, the

asset must be disposed of in a dollar value, even of the physical asset was given to a beneficiary.

Click the Trans Button to view the transaction.


28

More Slips Feature

The More Slips Feature has many different types of transactions available, divided into sections

Bank Transactions

Create Estate/Investment Account

If a bank account was not created while adding the Original Assets, create the bank account with this feature. Remember – bank accounts must start with a zero balance.

Bank Interest or Charges

Use these slips to record any interest received on a bank account or any fees charged to the account

Transfer

This is the slip to use when transferring funds from one bank account to another in Estate Account and Tax


29

Reinvestment of Interest or Dividend

If an asset receives regular interest or dividend payments, these slips can be used to reinvest the funds. Enter the amount being reinvested and the number of new units being purchased. Choose the Asset related to the

interest or dividend being reinvested. The Trans Button will show the reinvestment transaction and a new entry will be created for the shares acquired by reinvestment.

Trust Units and Update Trust Units

Trust Units are a unique asset in that income is receipted throughout the year as Revenue, but at the end

of the year, the actual breakup between Capital and Revenue is reported. Initial setup is by creating the Trust Asset using the Original Asset and selecting Trust Unit in the dropdown. A Quick Entry can then be

created or use the Deposit/Sale Button to record additional Units. Transactions can be viewed using the Trans Button.

The Update Trust Units slip allows the different capital and revenue adjustments at the end of the Period.


30

When the form appears, select the trust unit asset and then the Revenue Receipts to be adjusted. Enter the Date of the Adjustment and then the Interest Revenue, Dividends Revenue, Capital Gains, Return of

Capital and the Net Foreign Income. Estate Account and Tax will complete a Revenue Disbursement to remove the value from the Revenue Account that has accumulated throughout the period. It will then

complete the necessary Revenue and Capital Receipts to correctly record the income of the trust unit.

Return of Capital

The Return of Capital slip will reduce the value of the selected asset, but will not produce a capital gain or

loss for the item. If, over a period of time, investment totals need to be readjusted, use this slip. Return of Capital is not considered income, but decreases the value of the investment. This can occur when

Investment Accounts have to be readjusted if there have been rounded off entries.

Foreign Interest or Dividend

These slips record the interest or dividends of foreign assets

Book Entry

This slip is used to record changes in assets, for example a share split or consolidation. For share splits, enter the additional number of units received rather than the total number of units held after the split. Estate

Account and Tax keeps a running total of the number of units. If the change of units is a reduction, enter the decreased amount of units as a negative number.

Update Market Value

This slip is used to record changes in the value of an asset when there has been no other change to the asset.

Asset Distribution to Beneficiary

See Distribution to Beneficiaries for an explanation of this slip


31

Transactions

Once Assets have been entered, Transactions can be assigned to them. Estate Account and Tax tracks

transactions by the asset they are linked to. To enter transactions against an asset click on the next

to the Asset Value field and the following screen will appear.

Note: The title bar of the Transaction screen displays information about the linked asset.

Entering transactions is very similar to entering assets. Each transaction is a record that is numbered sequentially. Once a new transaction is created each of the fields should be completed. Use the drop

down boxes when available to obtain the appropriate value for that field. Use the following as a guide for

selecting the proper values.

Although many transactions can be entered manually, it is preferred that the Slips, Dropdown and Button features be used, and are included in the transaction type headings.

Transaction Type Field

Estate Account and Tax contains different transaction types to choose from which break down into 6 major

categories:

• Revenue Receipts • Revenue Disbursements • Capital Receipts • Capital Disbursements • Investment Receipts • Investment Disbursements

Transaction Type 1 - Revenue Receipt (Deposit/Sale button)

Revenue Receipts are entered using Transaction Type 1. Examples of revenue receipts include interest

(GIC, Bond, bank, etc.), dividends, rental income and foreign interest and dividends.


32

Transaction Type 2 - Revenue Disbursement (Purchase button)

Revenue Disbursements are entered using Transaction Type 2 and include such things as bank service

charges, investment counsel fees, and income tax preparation fees.

Transaction Type 3 – Capital/Investment Receipt (total sale) (Deposit/Sale button)

Capital or Investment Receipts are funds resulting from the sale of assets. The value to input is the actual

amount received from the sale of the entire asset.

Example: Realizing an Estate Account that was in use before the date of death.

Many times, you will continue to use the bank account that was in use at the date of death as the estate account. As explained previously you will have to enter two assets: a Original Asset (Type 1) for the bank

account with a value of the balance at the date of death, and a Estate Account (Type 4) with a $0.00

balance. You must then enter a Capital Receipt (Type 3) for the amount of money being deposited into the Estate Account to show that the estate account now has the balance as of the date of death.

Transaction Type 4 – Capital/Investment Receipt (partial sale) (Deposit/Sale

button)

If only a portion of an original asset is sold enter this transaction using a type 4 (e.g. 50 shares out of a total holding of 100 shares). The value to input is the actual amount received from the sale of the asset.

NOTE: If an asset has a fluctuating market value and only a portion of the asset is sold, it may be necessary

to enter the book value of that portion of the asset in order for Estate Account and Tax to calculate the appropriate gain or loss on the sale.

To calculate book values use the following equation:

Book Value =

# shares/units sold

X $ value of holding prior to sale

total # shares/units

held

To enter a book value for a transaction, click on the next to the Transaction value. Enter the book value in the Book Value field and click OK.

Transaction Type 5 - Capital Receipt (No Asset) (Deposit/Sale button)

This is a Transaction Type created so that you can include in your accounts a capital receipt independent of an asset. An example of a transaction of this sort would be a refund of insurance premiums overpaid

by the deceased before death.


33

Transaction Type 6 - Capital Disbursement (Cheques/Payment button)

Capital Disbursements are entered using the Transaction Type 6 and include such items as legal fees,

distributions and capital tax payments.

Transaction Type 9 - Investment Disbursement (purchase) (Purchase button)

Investment Disbursements are entered using Transaction Type 9. This transaction type is used when estate money is withdrawn to purchase an investment after date of death.

Transaction Type 10 - Distribution to Beneficiary Total Asset (More Slips)

A distribution in specie (sometimes called “a distribution in kind”) is a distribution to a beneficiary of an

original asset, other than cash. This type of transaction is reflected in the accounts with a Capital Receipt and Capital Disbursement, both with the same value (the value of the asset). To enter both the capital

receipt and capital disbursement in one entry, use Transaction Type 10, if the entire asset is distributed.

Transaction Type 11 - Distribution to Beneficiary Partial Asset (Deposit/Sale

button)

Use this Transaction Type if only a portion of an original asset, other than cash, is distributed. Like Transaction Type 10, this will enter both the capital receipt and capital disbursement in one entry.

Transaction Type 12 - Bank Transfer (More Slips)

When an estate holds more than one estate bank account, it is sometimes necessary to transfer funds from

one account to another. Such a transaction is not required to appear in the accounts but must be entered into Estate Account and Tax in order to reflect true balances in the estate accounts.

To perform a bank transfer access the Transaction Form for the estate account from which the funds are

being transferred. Enter the transaction using Transaction Type 12, the date and value of the transfer and, in the Account field, enter the Asset No. of the estate account the money is being transferred to.

Transaction Type 13 - Recording Entry (i.e. Stock Split) (More Slips)

This Transaction Type is used when a recording entry is to be shown in the Capital Receipts section of the

accounts with a $0.00 value.

For example, let’s say a company offers a stock split on a shareholding owned by the estate. This split must be recorded in the accounts. To record the entry properly, insert a transaction using Transaction

Type 13, enter the date and description of the split and a $0.00 value.

Liabilities

From time to time it may be necessary to include with a Statement of Estate Accounts, a Schedule of

Liabilities. This schedule will list all pending transactions that have not yet been entered in the estate accounts.

To enter a liability, simply enter the pending transaction as you would any other transaction using a

Transaction Type 2 or 6 (depending on whether the liability is of a capital or revenue nature) then click on


34

the next to the value field and click on the Liability checkbox. When you print a Schedule of Liabilities these transactions will be listed.

Once the transaction has been confirmed, uncheck the Liability checkbox and the transaction will appear

in the estate accounts.


35

Chapter 4: Continuing

Administration of the Estate


36

Continuing the Administration of the Estate

Once the Original Assets and Liabilities have been entered and initial transactions such as depositing the various cash, bank accounts, CPP payments into on account, there may be further steps to be taken, such

as tracking Assets disbursed to Beneficiaries, payments of Original Liabilities such as Credit Card Statements or mortgages, and investment transactions.

Investments in the course of Administering the Estate

Asset Transaction Types

Types: 6, 10 & 11 Type 9 Types: 12 & 13

Capital Disbursements

Payments made from Estate on account of debts of deceased, expenditures of Estate and distributions to beneficiaries.

Investment Disbursements Funds invested or reinvested by trustees during the administration of the Estate. Details of sales and purchases are made here

Bank Transfers and Recording Entries

payment of debts purchase of securities after date of death Transfer funds between bank accounts

payment credit cards purchase of investments after date of death Recording entries such as stock splits

funeral expenses exchange of securities burial costs redemption securities probate fees distribution of capital management fees 2/3 Capital – 1/3 Revenue income tax cap. gains income tax on final return appraisal expenses capital loss adjust. principal mortgage payments medical expenses

If the estate does not wind up immediately, Investments may need to be made. All investments are two-sided transactions showing the bank account withdrawal and the asset purchase. Using the slips

creates both transaction entries at once.

Note: GICs, Investments, and other transactions will appear as a “0” value on the On-Screen Summary. Click on the Asset to see the Current Value.

To begin, click on the Purchase Button to display the transaction slip and complete the necessary information. Click Next for another transaction or OK to finish


37

The transaction will then display on the grid, showing Type 3 Investments in Period.

Click the Trans Button to view the reciprocal bank account transaction showing Type 9 Investment Disbursement.

To conduct an investment purchase without using the Purchase Slip,

1. Enter the information on the grid, then click the . Enter the description of the transaction and click OK. Finally, enter the value of the investment.

2. Click on the Trans Button to enter the reciprocal bank account transaction showing Type 9

Investment Disbursement, and complete the Date, Description, Value and any other necessary fields.

Maturing GICs/Bonds

Using the Deposit/Sale button, enter the Date and then use the dropdowns to choose the Transaction Type (full or partial), the Bank Account (in this example the created “Asset Transfer Account”), the Asset

and value and click OK. The Accrued Interest, if any, can be realized the same way, or can be deposited to the Estate Account, if the funds are not being reinvested.

Note: Any interest or profit received after Date of Death is Revenue, not Capital.


38

Sale of Investments

There is the ability to keep track of partial sales of Assets as well as full sales.

Using the Deposit/Sale button, enter the information in the usual manner.

Click on the Trans Button to view the current status of the Asset Transactions. In this example, the Sale Value and the Book Value (original purchase price) are shown.

Note: There are no gains or losses on Original Assets. If the shares are purchased as Investment in

Period and subsequently sold at a gain or loss, the calculations will automatically be referenced in the appropriate Statements of Account.

Quick Entry – Using Recurring Loan Payment to the Estate as example

Quick Entry is designed to speed up similar entries that are made in an estate. Quick Entries are specific

to the Estate Matter they have been created in.


39

The Estate may hold a loan that pays on a monthly basis. Create a quick entry to simplify the entry of this

data. Open one of the slips, such as Deposit/Sale. Enter the name that you want to use to select this entry.

Estate Account and Tax will ask you if you want to create this quick entry. Select Yes. Enter the rest of the information and select Update Quick Entry.

When you need to record a payment, just select the Deposit/Sale slip and select from the Quick Entry

Dropdown, or directly from the main screen. Click the Trans Button on the corresponding Asset to view the record of related payments.

To update a quick entry select it, make the necessary changes and click the Update Quick Entry Button.

Once a quick entry has been created, it can be managed from the Maintenance section. Select File > Maintenance > Edit Quick Entries.

Select the desired estate. Changes can be made to the entry, or it can be deleted. There is also a print button to print a list of quick entries.


40

Sample Transactions

Original Assets with Accrued Interest – The Original Asset AND the Accrued Interest to Date of Death are Capital Receipts. Interest after Date of Death is treated as Interest Revenue.

Refunds – the Estate will often receive refunds of advance payments or contract payments, such as cell

phone plans, insurance policies, cable TV, etc. Use the Deposit/Sale button and the transaction type is Capital Receipt (No Asset) to record these transactions.

Payment of Debts – payments of debts, such as funeral expenses, final credit card statements, etc. Use

the Cheques/Payment button and complete the information.

Payment of Cash from Estate to Beneficiaries – use the Cheques/Payments button and complete the necessary information.

Disposition of Specific Asset from Estate to Beneficiaries – use the More Slips>Asset

Distribution to Beneficiary and complete the necessary information.

Forgiveness of Loan to Family Member – Record as Original Asset and the transaction type is Other or Promissory Note. If the loan is being forgiven, then use Deposit/Sale button and the transaction

type is Capital Receipt (Total Sale) and enter the value of the loan being forgiven. Next use the

Cheques/Payments button to record the Capital Disbursement. This essentially cancels each entry out and this technique is mostly used for “Hotchpot” calculations.

Sale of Property – there are two ways to handle a sale of the Original Asset property.

1. Using the Deposit/Sale button record the sale transaction using the NET value and provide details

in the description for the various costs, such as real estate commission, legal fees, etc. The description will be included in the Capital Receipts statement.

2. Using the Deposit/Sale button to record the sale transaction using the GROSS value. This will

then be included in the Capital Receipts statement. Use the Cheques/Payments button to pay the closing costs, such as real estate commission, and legal fees, and these will be set out in the

Capital Disbursements statement.

Investments – investments should be entered as either Original Assets (Type 1) or Investments in Period (Type 3).

Sale of Investment – use the Deposit/Sale button to record the sale transaction using the NET value

and provide details in the description for costs such as broker commission. The description will be included in the Capital Receipts statement. If using the GROSS value, then use the Cheques/Payments button

to pay costs, such as the broker commission and these will be set out in the Capital Disbursements

statement.

Ex-Dividends declared before Date of Death are recorded as Capital Receipts even if paid after Date of Death.

Dividends declared and paid after Date of Death are recorded as Dividend Revenue.


41

Mortgage Receivable – Use the Deposit/Sale button and the transaction type as Capital/Investment

Receipt (Partial sale) to record ongoing transactions, or create the Quick Entry. Monthly payments are divided between principal and interest. The first mortgage payment received after Date of Death is

recorded separately as principal and accrued interest to Date of Death as Capital Receipt. Interest after Date of Death is Interest Revenue. Subsequent mortgage payments received are divided between Principal

Capital/Investment Receipt (Partial sale) and interest as Interest- Revenue (type 1A)


42

Chapter 4 – Reports


43

Generating Estate Reports

Once the assets and transactions for an estate have been entered it is time to generate the accounts for the estate. To do this you must be in the Report Screen. Choose File, then Print Estate or by clicking on

the Printer/Reports button on the toolbar.

To generate an accounting report, select an estate, select a report and enter the day after the end date for the accounting period. Estate Account and Tax provides the option for reports to be viewed on the

screen or printed.

The following is a brief description of Estate Account and Tax Estate Account’s reports:

Asset Reconciliation

This report is a balance summary. It shows reconciled balances of cash investments and original assets left in the estate.

Asset Transaction Report

This report shows each asset along with all of its transactions including income, disbursements and

realizations. This report is useful for viewing the history of an asset.

Bank Statements

The bank statements are Estate Account and Tax Estate Account’s version of the activity in the bank

accounts. They are the primary reconciliation document to be used for reconciling the accounts to the actual cash values in the bank.

Statement of Accounts

This report is a statement of accounts in the required format for filing in the Ontario Court (General

Division). This report also includes the Summary (see below). This report comes in two formats; one showing the Investment Account on separate schedules of receipts and disbursements and one showing

one schedule of receipts and disbursements


44

Summary

This is a summary of the accounting of an estate showing how the estate investments and cash are

represented by the capital and revenue accounts. This report forms part of the Court Report.

Summary of Assets

This report lists all the original assets of the estate (those given Asset Type 1) and groups them by Class Type. Estate Account and Tax uses Probate Types to sort assets into seven different categories, e.g. Real

Estate, Money on Deposit, Stocks and Bonds, etc. Each Probate Type heads a separate page with its grouped assets and their values listed underneath. The front page of this report totals the values of each

separate page.

PDF Report Format

Estate Account and Tax can produce reports in PDF format to allow for compilation of the report as well as

quick and easy distribution of the reports. Select the PDF button to create the report and then choose a location and name for the PDF file.


45

Chapter 5 – Balancing

Accounts


46

Finding your accounts out of balance can be an all too common and frustrating experience. However,

Estate Account and Tax reports can turn reconciling and balancing into a relatively easy exercise.

On Screen Summary

Use the on screen summary on the right of the display to ensure that the latest entry made does not create an out of balance situation. The totals for Capital and Revenue must equal the totals for investments and

cash. If they are not in balance, stop entering new transactions and correct the last entry which caused the out of balance condition.

The Remaining Original Assets displays the values of all Original assets which have not been realized.

Click on a particular Asset line to display the Current Asset Value and Current Asset Unit information. If

the value is incorrect, review the last transaction for that asset.

On Screen Reconciliation

From the Asset screen, click on the $$ Statement button on the Asset Toolbar.

You will then be prompted to select the bank account from the dropdown list and an end date. Use the

day after the needed end date, as Estate Account and Tax uses “to end date” rather than “to and including end date”. (The start date defaults to Date of Death or the beginning of the new accounting

period). Once you have made your selections, click OK and the following screen will appear:


47

All of the transactions that occurred in the selected estate account will appear in date order on this screen,

with notations of the type of transaction, such as Capital Receipt, Investment Disbursement, etc. The Account Total at the bottom of the screen represents the cash balance of the estate account at the end

date. The Running Sum value represents the total value of all checked transactions. Clicking on the checkbox to the right of the transaction values will change the Running Sum total. Once all the transactions

have been checked both the Running Sum and the Account Total will be the same.

Account Balance

When no accounting information has been entered on an estate file for a long time, the first thing that is necessary is to check the bank balances. This will tell you whether your accounts balance to cash or not

and give you a better idea of where to start with data entry. To check the account balances on each estate

account, click on the $ Balance button on the Asset toolbar, and a window will appear showing the current balance in all of the estate accounts.

Balancing Assistance

Printing Reports

To check if your accounts are in or out of balance, print the Asset Reconciliation. If your accounts are balanced, the end numbers of these two reports will be the same and the Cash on Hand value of the

Summary will equal the Estate Accounts Remaining value on the Asset Reconciliation.

Review Bank Account month by month

Generate Estate Account and Tax bank statements and compare with “actual” bank statements. This is

easy to do since Estate Account and Tax Bank Statements list transactions chronologically by bank account.


48

Begin reconciling these Bank Statements against Estate Account and Tax’s generated Statements. Using

the on screen Bank Statement, select a month end and bank account. If the value for this month end matches the Bank Statement, then move forward month by month until you find the month where the two values do not balance. If the values for this month end do not match the Bank Statement, move to the

previous month until you reach the period where the two statements do balance. This process will allow

you to identify the specific month where your problem is occurring, making it easier to search for the transaction in question. If there are a lot of transactions in this month, you can use the same process to

determine the specific date of the problem transaction.

Review Summary report month by month

Print the Summary Report month by month, ensuring that you balance.

Capital + Revenue = Investments + Cash If your cash balances against your Bank Statements, then the problem is with an investment. All of your investments in the period should equal your investment

balance on the summary.

Data Entry Errors

Empty Fields

All Fields must be complete. Empty fields can cause Estate Account and Tax to ignore a transaction. In

the asset Window, the Type, Class, Date, Description and Value fields must be completed. The transaction screen requires that the Type, Bank Account, Date, Description, Compensation rate and Value field be filed.

If you want a value field to have a 0 value, you must insert $0.00. If you leave it blank, Estate Account and Tax will treat it as an empty field and will not include it in its calculations.

Incorrect Dates

Check that the dates entered are in the correct format. It is easy to enter the year 2031 when you wanted 2013.

Report Date Filters

Ensure that the end date of the report is after the start date and use the day after the end of the reporting

period.

Type 3 (Total sale) transactions cannot have any other transactions (except Revenue Receipts) following it. Since the asset has been sold, Estate Account and Tax will not recognize any additional transactions.

If you wish to purchase more of this asset, create a new Asset and then purchase additional units.

Duplicate Transactions

Print the Bank Statements. Transactions could have been entered twice. Check for duplication.


49

Identifying Asset with an Issue

There are often multiple types of a particular asset. For example, there may three TD Canada Trust GICs

to be recorded. Ensure there is an identifier to the asset, such as the account number or TD GIC1, TD GIC2, TD GIC3 so that if there is a discrepancy in the accounts, the asset in question can be quickly

identified.

Incorrect Transaction Types

Print an Asset Transaction Report. This is a good way to see what transactions have been entered for each

asset. By keeping a list handy of different Transaction Types, it is easy to spot whether a particular transaction has been given the wrong Type.


50

Chapter 6 – Special Features


51

Archive (Defining the Start Date)

The Archive feature of Estate Account and Tax gives you the ability to adjust the start date for an accounting period. This is especially useful if you deal with Trust accounts that are periodically passed before court or

if you prepare tax returns and need to start a new accounting period in an estate file.

When an estate file is archived the Capital, Revenue and Investment balances are calculated to the end of the period. These balances, along with any unrealized original assets and remaining investments in the

period are carried forward into a new accounting period. The new accounting period has a start date of

the day following the end date of the previous period.

To archive an estate file, Choose File > Maintenance > Archive Estate

The following screen will appear.

Select the estate file you want to archive and click on the New Archive button and enter the end date of the current period. For example, if the estate year-end is December 31, 2013 and you want the new period

to begin on January 1, 2014, you would enter December 31, 2013 as the end date.


52

Before the file is archived a diagnostic check of the file is completed. This is to ensure that the

accounting for the archive period is balanced. If the accounts are not in balance the archive will not occur and you will be prompted to balance the accounts first and Estate Account and Tax will then

archive the estate.

The Estate List will now display the Archived Date as well as the Start and Death Dates.

When the Archived Estate is reopened, three new entries have been created: Capital Balance Brought Forward, Revenue Balance Brought Forward and Investments Balance Brought Forward.

Click the Trans button to see that the balances from prior to the archive date have been entered with

0.00% Compensation rate.

It is recommended that if there is another Archive Period, the Estate be Rolled Back before setting the

next Archive Date. This will ensure that all transactions will be available without having to reference many archive periods.

Entering Files with Previous Accounting Periods (Bring Forward)

Occasionally, you may have to enter the accounts for an existing estate, one that has capital, revenue and investment balances from a previous accounting period, into Estate Account and Tax. Estate Account and

Tax is well equipped to deal with such files.

For accounts with a previous accounting period, the remaining values for the revenue, capital, and investment accounts must be entered, along with the remaining original assets and investments.

Open a new file in Estate Account and Tax and enter the Start Date of the new period in the Date of Death

field on the Main Estate Screen.

Access the Assets Screen for the new file and create the Capital Balance Brought Forward, Revenue Balance Brought Forward and Investments Balance Brought Forward entries


53

For each of these new assets a transaction will have to be recorded. It is the transaction that will let Estate Account and Tax know how much money is held in these accounts. These transactions must be entered

with a 0.00% compensation value in order that Estate Account and Tax excludes them from the

compensation calculation. Note that it is Type 3 and there is no Account chosen.

The transaction for the Revenue Account Type 1 will look like this:

If the Revenue account was operating in deficit at the end of the previous period, the Transaction Type

would be 2 (for Revenue Disbursement) rather than 1 (for Revenue Receipt)

The transaction for the Investment Account Type 9 asset will look like this:

The Summary Screen to the right will now display all amounts entered:


54

Once the above three assets have been entered with their appropriate transactions, the next step is to

enter any investments, bank accounts and original assets remaining at the end of the previous accounting period.

Enter investments brought forward using Asset Type 2 (Investments Brought Forward), with the value of

the investment at the end of the previous period.

The total value of all of the investments brought forward (those Assets with an Asset Type 2), MUST equal

the Transaction value for the Investment Account Brought Forward, Transaction Type 9.

Enter any estate accounts remaining at the end of the previous period using an Asset Type 4 - Estate Accounts, and their actual value at the end of the previous period.

Enter any original assets remaining using an Asset Type 1- Original Assets with the value they had at the

date of death.

When entering original assets, estate bank accounts and investments remaining from a previous period,

only one entry is required. Unlike the Capital, Revenue and Investment accounts brought forward, no transaction is needed.

Once all of the above entries have been made, carry on with the accounting for the present period. There

are no more special considerations to be given to files with previous accounting periods.

Calculators

There are three calculators in Estate Account and Tax on the standard toolbar:

Interest Calculator


55

Use the Interest Calculator to calculate the capital and revenue portions of accrued interest up to the date

of death.

Calculator

Use the Calculator to make basic calculations, and display the results in a “tape” format.

Foreign Tax Calculator

Use the Foreign Tax Calculator to calculate Non-Resident Tax owing on earnings from foreign sources.

Copy Estate to/from Disk

Estate Account and Tax can send a specific estate to a file to send it to or from another firm. This is

intended when a timekeeper is switching firms and bringing clients/files with them. Select File and Maintenance and then Copy to Disk. Select the estate and choose Copy Estate to Disk. Save and name

the file. To import an estate into Estate Account and Tax, select File, Maintenance and Copy Estate from Disk. Select the file and choose OK.

Contact Emergent for assistance with this feature.


56

Cheque History

Cheques written in Estate Account and Tax can use names listed in the Beneficiary section, or names can be entered directly onto the cheque. Once a name has been entered, it is saved with the estate and can

be selected again. If there is a need to delete or change an entered name, select File > Maintenance and Edit Cheque History.

Select the appropriate estate and then change or delete the entry.

Transaction Screen Options

Transaction Screens can be sorted and remembered by setting these options in File > Maintenance > Set Transaction Screen Options. Sort from the top or bottom of the list by Number, Date or Amount.

Documents

USER GUIDE - d2oc0ihd6a5bt.cloudfront.net · Estate Accounting User Guide 1 ... Estate Accounting User Guide 3 Chapter 1: ... income tax on terminal return and /or capital gains;