PROBATE RULE 9: ACCOUNTS, REPORTS, FEES, COMMISSIONS, AND DISTRIBUTION
A. FORM OF ACCOUNTS
B. ALLEGATIONS REGARDING CREDITOR’S CLAIMS AND REPORT OF ACTIONS TAKEN UNDER IAEA
C. FRANCHISE TAX BOARD CERTIFICATE
D. STATUTORY COMMISSIONS AND FEES
E. COMPENSATION FOR EXTRAORDINARY SERVICES
G. COMPENSATION FOR GUARDIANS, CONSERVATORS, TRUSTEES, AND THEIR COUNSEL, AND FOR COUNSEL FOR A CONSERVATEE OR WARD
H. NO COMPENSATION WITHOUT COURT ORDERS
I. PROPERTY TO BE DISTRIBUTED AND DISTRIBUTEES MUST BE LISTED
J. AGREEMENTS FOR DISTRIBUTION OF ASSETS
K. FILING OF RECEIPTS FOR PRELIMINARY DISTRIBUTIONS
A. FORM OF ACCOUNTS
(1) ACCOUNTS IN DECEDENTS' ESTATES AND IN TRUSTS
All accounts filed in decedents' estates and in trusts, must follow the format described in Probate Code §1061:
a. TIME PERIOD
All accounts must set forth specifically the period covered by the account.
b. SUMMARY OF ACCOUNT
Accounts must contain a summary or recapitulation in substantially the following format:
SUMMARY OF ACCOUNT
The petitioner is chargeable, and is entitled to the credits, respectively, as set forth in this Summary of Account. The attached supporting schedules are incorporated by reference.
Amount of Inventory and Appraisal
(or if subsequent account, amount
chargeable from prior account)
$_________________ Additional Property Received (or
$_________________ Receipts during Account Period
Other than Principal (Schedule ___)
$_________________ Gains on Sales (Schedule ___) $_________________ Net Income from Trade or
Business (Schedule ___)
$_________________ Total Charges: $_________________
Disbursements during Account
Period (Schedule ___)
$_________________ Losses on Sales (Schedule ___)
(e.g., property distributed,
homestead or other property
$_________________ Net Loss from Trade Or Business
$_________________ Distributions (Schedule ___) $_________________ Property on Hand (Schedule ___) $_________________ Total Credits: $_________________
c. SEPARATE SCHEDULES
Each figure on the summary of the account must be supported by separate schedules. These must include schedules of receipts and disbursements showing the date, amount, payor, payee, and nature or purpose of each item. Whenever possible, disbursements must show check numbers. The gain and loss schedules must reflect the sales price, the inventory or carrying value, and resultant gain or loss. The schedule of assets on hand must be itemized showing the inventory or acquisition value. For all accounts there must be an additional schedule showing estimated market value of assets on hand as of the end of the accounting period, and a schedule of the estimated market value of the assets on hand as of the beginning of all accounting periods subsequent to the initial account. The fiduciary may provide a good faith estimate for the value of real estate, a closely held business, or other assets without a ready market.
Whenever an accounting period exceeds one year, or whenever income is received from any particular source more than twelve times in an accounting period, or whenever payments are disbursed to a particular payee more than twelve times in an accounting period, it is required that the schedules for receipts and for disbursements be categorized into subschedules reflecting the particular income sources or payees for whom there are more than twelve entries per accounting period. See 2 California Decedent Estate Practice §§19.19 and 19.22 (Cal CEB 1986).
When a trust accounting submitted for approval by the Court contains disbursements for trustee or attorney fees, the trustee or attorney must furnish evidence to support the disbursements for fees in a manner consistent with the requirements of the trust instrument. If the trust permits “reasonable fees” without court approval, for instance, the trustee shall furnish an explanation of how the “reasonable fee” was calculated.
d. INCOME AND PRINCIPAL ACCOUNTING
All accounts for entities that have separate principal and income beneficiaries must allocate receipts and disbursements between principal and income.
If a financial institution makes only online statements available to the fiduciary, the fiduciary may submit exact printed copies of the online statements in place of the original statements required by Probate Code § 2620 (c ) and shall attach to the printed copies of the statements submitted for each account a declaration under penalty of perjury that the printed copies are exact replicas of the online statements provided by the financial institution.
e. WAIVER OF ACCOUNT
The petition for final distribution on waiver of account must contain the information required in CRC 7.550, as well as the fair market value of assets on hand, and must comply with CRC 7.551-7.552.
a. All accountings in guardianships and conservatorships filed on or after January 1, 2008, must follow the content and format required in CRC 7.575. Accountings are designated as either standard or simplified. All accountings must use Judicial Council Form GC-400(SUM)/GC-405(SUM) for the Summary of Account. Guardians and conservators presenting standard accounts may, but are not required to, use the option Judicial Council forms designated as GC-400. Those guardians and conservators presenting standard accountings who do not use the optional Judicial Council forms are required to use the content and format called for in those forms, by may submit accountings prepared on conventional accounting programs. Guardians and conservators presenting simplified accounts must use the Judicial Council forms designated as GC-405(SUM) .
b. Organization of Schedules: All accountings must provide all information required in Probate Code §§1060 - 1064.
Receipts schedules must use the categories and format used by the optional judicial forms:
- Dividends; Interest; Pensions, Annuities, other Periodic Payments; Rent; Social Security, Veterans Administration, and Other Public Benefits; Other Receipts.
Schedules for Receipts of Principal, Gains on Sales, Income from Business, and Loss on Sales do not have a mandated format.
Disbursement schedules must use the categories used by the optional Judicial Council forms:
- Caregiver Expenses; Residence or Long Term Care Facility Expenses; Ward's Educational Expenses; Fiduciary and Attorney Fee Expenses; General Administration Expenses; Investment Expenses; Living Expenses; Medical Expenses; Property Sale Expenses; Rental Property Expenses; and Other Expenses. See CRC 7.575(e).
c. At the time the Court appoints a conservator or guardian, and unless the court waives the requirement of the conservator or guardian to file periodic accountings with the Court, the court must set a compliance date for the conservator or guardian to file his or her first account and report, which must be on the Friday calendar at 10:00 a.m. no later than 60 days after the first year anniversary of the appointment of the conservator or guardian. If the conservator or guardian has filed the accounting, this will be a nonappearance matter. At the time the court hears an account and report, it must set a compliance date for the next account and report, which must be on the Friday calendar at 10:00 a.m. no later than 60 days after each subsequent biennial anniversary of the conservatorship or guardianship.
d. Pursuant to Probate Code §2620, the guardian or conservator may elect to lodge with the Court the originals of the account statements and all other documents referenced in §2620(c). The originals of all such documents shall be released by the Court as provided in §2620(c)(8).
(3) STATEMENT RE SUFFICIENCY OF BOND IN REPORTS ACCOMPANYING ACCOUNTINGS
Fiduciaries must allege in all reports accompanying accountings whether or not the bond in the case is sufficient under Probate Code § 2320 and CRC 7.207, and, if not, what steps are being taken to comply with the law and rule.
It is not sufficient in any petition for distribution to allege merely that all claims have been paid. Petitioners must provide all information required under CRC Rule 7.403. The allegations regarding disposition of all claims must appear in the petition for final distribution even though they may have appeared in whole or in part in prior petitions. See 5.C for report of actions taken under IAEA.
Where an estate's inventory is appraised at $1,000,000.00 or more and $250,000.00 or more is distributable to beneficiaries not residing in California, an estate income tax certificate must be obtained from the Franchise Tax Board before the court will order final distribution. See Revenue and Taxation Code §19513 and Title 18 CCR §19513 and CRC Rule 7.551.
All parties and counsel are directed to CRC Rules 7.700 and 7.701.
(1) PAYABLE AFTER COURT ORDER
Statutory commissions and fees (herein "statutory compensation") are payable only after a Court order authorizing them.
(2) BOTH HALVES OF COMMUNITY PROPERTY PROBATED
If both halves of the community property are properly included in the probate proceeding, statutory compensation calculated on both halves of the community property will be allowed.
Unless statutory compensation is waived, calculation of the statutory compensation (including calculation of the fee base) and any prior payments of statutory compensation must be included in the petition for compensation.
(4) ALLOWANCE ON ACCOUNT
Allowances on account of statutory compensation will generally be allowed in proportion to the work completed.
(5) ACCOUNTING WAIVED
Where the accounting is waived, the basis of the statutory compensation shall be the inventory value of the estate plus, if applicable, receipts, gains on sales, less losses on sale, as provided in CRC 7.550 and 7.705. Such receipts and gains or losses must be reflected in the report of the personal representative.
(6) PAYMENT OF COSTS, FEES, AND COMMISSIONS WHERE CASH INSUFFICIENT
Where the estate at final distribution has no cash or insufficient cash to pay costs, attorney’s fees, and/or personal representative's commissions, an explanation of the source of payment of these obligations must be submitted.
(1) EXPLANATION REQUIRED
A detailed explanation of the extraordinary services performed and the amount of compensation requested for such services must be separately stated in a declaration under penalty of perjury executed by the person rendering the services. See also the standards set forth in Section 9.G. The explanation must include the statement of facts required by CRC 7.702.
The Court may consider the amount of statutory fees when determining compensation for extraordinary services.
(2) COURT APPEARANCE
In all cases in which there is a request for compensation for extraordinary services, the attorney for the personal representative or the personal representative must be present at the hearing, unless the matter is on the approved calendar.
(3) ALLOWANCE ON ACCOUNT
Allowances on account of compensation for extraordinary services ordinarily will not be allowed.
Where reimbursement for costs incurred is requested by the personal representative or attorney, the cost items advanced by such party must be separately stated with a description of each cost item.
A petition for compensation of a guardian, conservator, trustee, and counsel, or for counsel for a conservatee or ward, must be accompanied by a complete statement of the services rendered, an explanation of the value or benefit of those services to the estate, and the total amount requested for such services, made under penalty of perjury and executed by the person rendering the services. The nonexclusive factors the Court may consider in determining the fees of a guardian or conservator are listed in CRC 7.756. The nonexclusive factors the Court may consider in determining the fees of a trustee are listed in CRC 7.776. Where a trust accounting that is submitted for court approval shows payments made to the trustee, guardian, conservator, or his or her counsel, or counsel for a ward or conservatee, it must be accompanied by the information described in this paragraph, even though the trust instrument may provide for such payments without requiring court approval. All petitions for compensation to a conservator, guardian, or counselor for a conservator, guardian, conservatee, or ward, or for compensation to a trustee or counsel for a trustee in a matter where a trust has been created to hold the assets of a conservatee or ward, must be served on the Court Investigator as well as on all persons required under the law to be served. The local form entitled "Referral for Investigator-Compensation" (Attachment PB-4064 ) must be completed and submitted at the time the Petition is filed.
A conservator or guardian who is a professional may not necessarily be compensated for all services rendered at that person's ordinary professional rate. Requests for fees by family-member conservators, including registered domestic partners, for visits to the conservatee will ordinarily not be approved.
There is no authority for paying any compensation to an executor, an administrator, a guardian, a conservator, or an attorney for any such fiduciary, or an attorney for the conservatee or ward, from the estate in advance of a Court order authorizing such payment. There is no authority for paying any compensation to the trustee or the attorney for the trustee from a trust which CRC 7.903 applies in advance of a Court order authorizing such payment.
A petition for distribution must describe in detail all property to be distributed as set forth in CRC 7.651-652.
An order of distribution must be drafted so that it is complete without reference to the petition, and without reference to any documents that are not part of the order. Complete legal descriptions of all assets (e.g., real property, securities, and security interests) and the full names of all distributees must be set forth in the order. It is suggested that an order of distribution include the current address of devisees of real property and the assessor's parcel number of the property.
If distribution is to be other than according to the terms of the will or the laws of intestate succession, there must be on file a written agreement signed by all parties affected by the distribution.
Receipts for property distributed pursuant to a petition for preliminary distribution must be on file before the Court will approve a petition for final distribution.