Updated 4 November 2026
The Ultimate List: The Top 50 Things You Need to Know About Administering an Estate #44: File Final Accounting
Final estate accounts should explain what the deceased owned, what the executor collected and paid, and what each beneficiary received. They are more than a closing bank balance. Every executor must keep proper records, but preparing accounts, filing them and having them passed by the Supreme Court are different obligations.
What are final estate accounts?
Final estate accounts are a structured record of the estate’s administration, including assets, liabilities, income, expenses and distributions. They should explain what happened to each asset and reconcile the remaining balance. The accounts allow beneficiaries to understand the administration and help the executor demonstrate how decisions and payments were carried out.
Start recording transactions at the beginning, rather than reconstructing everything before distribution. Number supporting documents and link them to the relevant entry. This makes it easier to identify missing records, double entries and amounts that need explanation before a final statement is prepared.
Must every executor file accounts with the Court?
No. All executors must keep proper records and account to beneficiaries, but most estates do not require court filing or passing. Section 85 of the Probate and Administration Act 1898 specifies circumstances requiring verified accounts, and the Court can order accounts in a particular estate. Check the requirements before assuming informal reporting is sufficient.
The Law Society’s guidance identifies categories including an executor who is a creditor, a guardian of a minor beneficiary, or administering an estate substantially benefiting charity. Other court-selected or court-directed cases also arise. The actual obligation depends on the statutory category and any orders.
What is the deadline if accounts must be filed?
Where accounts are required, the ordinary rule is filing within twelve months of the grant of probate or administration, subject to extension or other court orders. That timeframe runs from the grant, not the death. An unfinished administration may require an extension or further accounts rather than an inaccurate statement that everything is complete.
The Supreme Court’s guidance explains the filing timetable under Part 78 rule 85. Identify the deadline when the grant arrives and seek advice before it expires. Keep a record of outstanding assets, litigation and tax work supporting any request for more time.
What does having accounts passed mean?
Passing accounts is a formal process in which the Court examines the estate accounts and considers whether transactions should be allowed. Filing accounts simply places them on the court file. A registrar may require supporting evidence or disallow expenditure. Neither preparing an account nor lodging it automatically means the Court has approved it.
Current court practice generally does not require passing unless a beneficiary requests it, commission is sought or the Court orders it. The accounts and commission guidance explains the procedure. Obtain advice on the appropriate application and the current forms before filing.
Which assets should appear in the accounts?
Identify the estate assets at death and show what happened to them: collection, sale, transfer to a beneficiary or retention. Record liabilities separately and explain valuation differences where relevant. Do not automatically include property passing by survivorship, superannuation paid directly to dependants or assets owned by a separate company or trust.
Compare the accounts with the original inventory and investigate omissions. If a previously unknown asset is found, record when it was discovered and how it was dealt with. A property sale should be traceable through the contract, settlement statement and bank receipt.
How should income and capital be recorded?
Keep capital transactions distinguishable from income earned during administration, such as interest, dividends or rent. Record receipts and payments with dates, amounts, descriptions and supporting documents. If the will creates different income and capital entitlements, obtain advice about allocation rather than assuming every receipt belongs in a single pool for distribution.
A bank deposit from a property settlement is not simply rental income. Similarly, a refund may relate to an earlier expense rather than new earnings. Ask the accountant to explain adjustments so the accounts remain understandable to the executor and beneficiaries.
How should expenses and executor payments be shown?
List administration expenses individually and retain the invoice, receipt and reason for each payment. Separate reimbursement of properly incurred expenses from remuneration for the executor’s work. Commission is not an automatic entitlement to withdraw a percentage. The will, a valid agreement or a court order may determine whether payment is authorised.
The Law Society’s accounts and commission guidance discusses agreement by beneficiaries with legal capacity and court applications. Record the relevant authority alongside any payment to the executor. Do not conceal personal withdrawals within general administration expenses or label unapproved commission as reimbursement.
How does tax affect final accounting?
Check the deceased’s outstanding tax affairs and any separate tax obligations arising during the estate’s administration. Record tax paid, refunds received and amounts retained for unresolved liabilities. An estate account is not a substitute for a tax return, and a final distribution should not leave the estate unable to meet an identified tax obligation.
The NSW executor guide identifies taxation as part of the administration. Ask an accountant which returns and records are required for this estate. Explain any reserve in the accounts and update the figures when assessments, refunds or final professional invoices arrive.
How should distributions to beneficiaries be recorded?
Record each beneficiary’s entitlement, the assets or money transferred, the date and any earlier interim distributions. Obtain receipts or other evidence of transfer. Where property is transferred rather than sold, identify it and the valuation basis used. The total distribution record must match the will or intestacy entitlements and any relevant orders.
Legal Aid NSW recommends written receipts and proper records. Avoid treating a receipt acknowledging payment as automatic approval of every estate transaction. If a release or settlement is proposed, its scope and the beneficiary’s opportunity to obtain independent advice need separate consideration.
What does reconciling the estate accounts involve?
Reconciliation checks that the recorded receipts and payments explain the funds actually held, while separately accounting for assets transferred or retained. Compare every estate bank account with the ledger at the same date. Investigate differences, outstanding payments and unrecorded charges before describing the accounts as final or calculating the final distribution.
For an arithmetic check only, $100,000 received less $20,000 paid leaves $80,000 before further transactions. That figure is not necessarily distributable: outstanding liabilities, restricted gifts and assets outside the cash account still need separate treatment. Never force an unexplained difference into a miscellaneous entry.
Provide intelligible accounts that show how their entitlements were determined and what remains outstanding. Respond reasonably to requests for explanations and relevant supporting records. The information required depends on the beneficiary’s interest and circumstances. An unexplained bank statement or a collection of unsorted documents may not adequately account for the administration.
Keep a written record of questions and responses. If a request is unusually extensive, concerns confidential information or would involve significant expense, seek advice about an appropriate response. Regular updates can prevent the final accounts from being the first explanation beneficiaries receive.
What if a beneficiary disputes an expense or balance?
Ask the beneficiary to identify the disputed entry and explain the concern, then compare it with the supporting evidence and legal authority. Correct genuine errors transparently. If disagreement continues, legal advice, negotiation or a court accounting process may be needed. Do not alter records silently or withhold all information because one item is disputed.
Retain the original version and explain each amendment in a dated correction note. Separate arithmetic errors from challenges to the executor’s authority or conduct. A formal objection requires attention to the applicable procedure and directions; an email complaint is not necessarily the required court document.
What does a real NSW accounts case demonstrate?
In Everts v Liepins [2022] NSWSC 1021, a residuary beneficiary sought accounts after prolonged administration and unanswered questions. The Supreme Court ordered complete written accounts verified by affidavit, together with supporting records and reconciliation. The decision illustrates why an executor must be able to explain transactions, not merely report a bank balance.
The Court required dated, consecutively numbered entries and documents supporting receipts, expenses and distributions. In Everts v Liepins (No 2) [2022] NSWSC 1598, it later ordered the executor personally to pay the applicant’s costs of the motion following incomplete compliance. These were specific orders, not a standard fee schedule.
Can the executor close the file once accounts are prepared?
Preparation alone does not complete the administration. Check that required filings or orders have been addressed, distributions and receipts are recorded, liabilities are resolved or properly provided for, and ongoing trusts have been identified. Retain the records securely. The appropriate retention period depends on the documents, tax requirements and any continuing obligations.
An optional notice of intended distribution provides only conditional protection for certain unknown claims; it does not approve the accounts. Keep enduring documents, such as the will and grant, accessible and obtain advice before destroying transaction records or closing accounts needed for unresolved matters.
What is Christine’s practical recommendation?
My recommendation is to prepare an account that another person can follow from the original asset list to the final receipt. Reconcile it before circulation and explain unresolved items openly. Check court filing and commission requirements early, rather than assuming every estate follows the same process or needs approval from every beneficiary.
CM Lawyers can assist with estate administration, accounts and applications concerning executor obligations. Contact Christine Manolakos on (02) 9557 9000 or email lawyers@cmlaw.com.au. Bring the will, grant, asset inventory, statements, invoices and distribution records, including any questions already raised by beneficiaries.
General information about NSW law as at 4 November 2026, not legal or financial advice. The reported judgment is a real decision; its outcome depends on its facts. Obtain advice about the particular estate before acting.
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