Overview

Commissioner of Accounts

Inventory

Accountings

Disbursements & Distributions

Insolvent Estates

In connection with Virginia estate fiduciary accountings, the word disbursements typically refers to payments made from the estate to pay debts of the decedent, funeral bills, and costs of administering the estate. The word distribution refers to payments or delivery of estate assets to the beneficiaries or heirs of the estate.

Assuming the estate is solvent and all debts and expenses can be paid (insolvent estates are discussed in a later section) the payment of debts and obligations of the decedent and administrative expenses is fairly straight forward. There are, though, some important things to keep in mind.

The duty of the personal representative is to pay enforceable obligations of the decedent or the estate. This suggests that reasonable inquiry should be made to determine and document the enforceability of the debt.

If a debt is barred by an applicable statute of limitations it should not be paid. If someone claiming to be a creditor of the decedent cannot document their claim, it deserves further scrutiny and perhaps the personal representative should have an attorney review the matter.

It is very important to document all disbursements made from the estate. Personal representatives should be prepared to provide a copy of the bill or claim paid, the canceled check, or a paid and signed receipt for each disbursement. The commissioner of accounts will require these supporting documents when auditing accountings.

Distributions to beneficiaries and heirs also must be handled in a careful manner. Although it may appear clear to a personal representative from their reading of a will how an estate is to be distributed, a mistake can result in personal liability to the personal representative.

Errors are often made when a beneficiary named in the will has predeceased the testator. Special rules of interpretation under the law may apply to such instances, and legal advice from an attorney experienced in estate administration should be obtained.

If there is no will, distribution must be made according to Virginia law, and again legal advice is recommended in interpreting and apply applicable statutes to the circumstances of the estate.

Like disbursements, all distributions to heirs or beneficiaries must be properly documented. Original canceled checks should be retained for all cash distributions. Written signed receipts for deliveries of assets in kind should be obtained. If stocks or bonds are transferred in kind to heirs or beneficiaries, proper documents of transfer should be obtained.

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