CHAPTER LXV PRELIMINARY MATTERS § 561. Advice to the Accountant Painstaking care is seldom so much needed as when dealing with a mass of papers accumulated by a man who is no longer living and who therefore cannot furnish a clue to any obscure meaning. In an excellent little book, which unfortunately is not of much service in this country because it deals with English law and English money, the following suggestions are offered to the accountant, public or otherwise, who intends to open a set of estate accounts: It may be assumed that all men, no matter how unmethodical they may appear, have a system of dealing with papers and documents; it may be a very bad and imperfect system, but it is there, and the accountant's first care must be to find it out, as, once found, it will materially assist him in understanding the testator's affairs. Sometimes it may not appear until weeks have been spent upon the papers, but there is little doubt that the system is there. First, it is desirable to run quickly through the papers, disregarding all which are manifestly irrelevant, then to classify the remainder, and, as far as possible, arrange them in order of date, then to proceed to reduce the information which they contain to notes, and it will be found that by patient comparison, an unfailing memory, and that trick which accountants acquire of recalling a figure which they saw an hour or a week before, it is possible eventually to construct a coherent account. Practice and the habit of concentration will enable the accountant to recall two or three amounts scattered over various papers and mentally adapt them to balance the sum of them which has appeared elsewhere. . . . One word of advice is desirable in conclusion-never to put hasty work into executors' accounts. There are so many § 562. First Steps The first thing of an accounting nature which the representative should do is to serve notice of the decedent's death upon all banks in which he had funds, in order that they may cash no more checks against his account, should any be outstanding. The bank accounts should be balanced immediately and, upon securing the bank statements and canceled checks, the statements should be reconciled in the usual manner. If the decedent had a good set of books kept up to within a short time of his death, the work of the accountant and the representative will be noticeably easier. Soon after his appointment the representative should have these books brought fully up to the date of death and closed. Much valuable information as to the decedent's affairs will be secured in this way if the work of closing the books is done thoughtfully instead of mechanically. Recent disbursements of the decedent should be examined to see if they will not disclose unknown assets; recent receipts may be partial payments of interest on unknown accounts receivable or may otherwise disclose valuable information. § 563. Briefing the Will The first thing which an executor should do toward active work on the estate books is to analyze or "brief" the will, reducing it to a few short and intelligible sentences. It may not infrequently be desirable to obtain the advice of a solicitor to interpret some clauses in a will, but usually an accountant's knowledge is sufficient." Care should be taken, however, to make sure that this is accurately done. An example of a brief of the long will shown in Form I follows: ANALYSIS OF WILL of Henry H. BECKWITH To Esther R. Beckwith, wife, use during her life of house, 91 West 72nd St., New York City, and of garage in said city, subject to taxes, water rates, and necessary repairs. To Esther R. Beckwith, wife, all linen, bric-a-brac, works of art, household goods and furniture (useful and ornamental), china, plate, silverware, books and pictures, and motor cars and appurtenances thereto belonging. To Esther R. Beckwith, wife, use during her life, to extent of $3,000 quarterly, of income from such sum between $200,000 and $300,000, as in the opinion of trustees will be amply sufficient to produce annual income of $12,000. To lineal descendants, equally per stirpes, use of remainder of income from above trust. To Henry H. Beckwith, Jr., son, parcel of land on which is summer home at Bristol, Massachusetts, all buildings, contents thereof and appurtenances thereto, and all land in town of Bristol. To Henry H. Beckwith, Jr., son, all jewelry, wearing apparel, personal ornaments, and effects. To Rufus A. Beckwith, brother, income during his life from trust of $100,000. To Maud Beckwith, sister-in-law, income during her life from trust of $50,000. To June Stimson, cousin, income during her life from trust of $20,000. To Syrian Protestant College, Beirut, Syria, $10,000. To all legatees, release from payment of any indebtedness due deceased. To Anne Bays, Helen Gardner, Mary Beckwith Cox, Henry Beckwith, Jr., children, use of income from re II. (a) 15. 12. 13. 14. 16. (b) (c) mainder until forty years of age; then one-half of principal of his or her share and use during life of income from other half, principal to be paid over as directed by will of each child or to child's heirs-at-law. To Charles A. Barnes, cousin, annuity of $3,000 to be paid semiannually during life. To Morton F. Barnes, cousin, the same. To Tuskegee Institute, Tuskegee, Alabama, principals of two funds furnishing annuities to Charles A. Barnes and Morton F. Barnes, to be paid upon termination of each annuity. To Esther R. Beckwith, wife, all property not otherwise disposed of. (Residuary legacy.) Special Stipulations No amortization to be charged against life tenants. Executors and trustees have power to continue any existing investment although of character not now permitted by law to trustees. May invest in real estate anywhere, or in bonds of any state or government (foreign included), or in bonds, notes, or other paper secured by real estate mortgage anywhere, or in any stocks or bonds of companies in United States or Canada in good credit and standing, or (with written consent of beneficiary) in any property whatever. Executors and trustees may compromise and adjust any claim in any way. No security required from any executor or trustee in any jurisdiction. It is not a bad plan to copy this brief in the journal or other book of original entry, before any entries have been made. The will may then be put away in a safe place. The original of course will be probated, becoming a court record and therefore accessible, but the executor should preserve his copy to save time and avoid embarrassment. The will and the inventory comprise the basis for nearly all of the accounting, and no set of books is really complete without a copy of these documents.❜ Gottsberger, Accountant's Guide. The administrator, having no will to go by, should familiarize himself with the law of distribution prevailing in the state of the decedent's residence. It does not pay to rely upon one's memory about this law because it is frequently amended in the different states. REVIEW QUESTIONS 1. What causes difficulty in dealing with the financial records of a decedent? How may a decedent's papers be classified? 2. What should be done first by an accountant for an estate? What should be done with the books of the decedent? 3. What is "briefing" the will? What is the object of briefing the will? Where may this brief be placed of record? |