Estate distribution statement & account balance discrepancies

WLJ60

I am in the process of drafting the final account statement for my late mother which I had thought would be a fairly straightforward process. The issue lies in the fact there is a sum of money (sub 1K) which I cannot account for after taking into the balances at death, plus interest accrued, additional income and minus all liabilities during the period of administration.

I have run through the figures over and over again, most of the accounts were deposit accounts / premium bonds so these clearly add up. I wonder if one particular set of building society accounts, including current account, were miscalculated at the time, as having received the final statements I am struggling to understand how interest has been calculated. I have gone back and asked for statements for all these accounts to see if I can account for the sum in question.

A little research suggests this in not an uncommon issue, however I need the final statement to balance. In the event I cannot trace the root cause of the issue can the additional sum be accounted for as a supplementary amount ?

badmemory

I don't suppose this will help but one of my mother's accounts notified us of one amount but then added some interest at date of death. It seemed odd as the amount didn't appear on the statement as the statement date was already passed. Sorry haven't explained very well.

poseidon1

It's possiby the accrued interest figure at date of death which is provided by the savings institutions as an additional number added to the savings account balance as a reportable capital 'asset' for IHT and probate purposes, but of course not actually received by estate (in the case of fixed interest accounts) until potentially many months afterwards.

Reconciling this when dealing with the final estate distribution accounts usually requires notional transfers between capital and income accounts ( to balance the books).

However unless one has a solid grasp of double entry bookkeeping techniques as they apply to estate accounting, I have always been curious how non professionals who DIY this process, actually manage to handle this issue especially where they do not separate the income accounting aspects of estate transactions from those relating to capital.

Things get even more complicated if the interest which is subsequently received ends up being taxable because it exceeds the £500 de minimis reporting threshold ( but that's a whole other story).

In your case I do wonder if you may have double accounted for interest, by not making the appropriate adjustment between the capital and income account for the accrued interest figure included in your opening balance of the capital assets at date of death.

WLJ60

Both useful thank you.

WLJ60

I have managed to balance the figures at last. There was some activity in a current account including a credit and expense debit which had both been included in the value for probate figure, so without going into any further detail I have successfully reconciled the figures.

FWIW II do have a accounting diploma so should have realised earlier and saved myself a considerable amount of time and aggravation.

Thanks

John