5. Some Questions and Answers Redacted from the Interview of Arlington County Commissioner of Accounts William Murray.
The full interview can be seen at Resources-Television Show
a. Virginia Probate Process
The probate process in Virginia is somewhat unique in comparison with other states, especially the Office of the Commissioner of Accounts. What is the history behind the creation of this office?
The Circuit Court appoints the Commissioner of Accounts, who must be an attorney. The Court also appoints an Assistant Commissioner of Accounts to handle cases in which the Commissioner has a conflict. The Commissioner serves at the pleasure of the Circuit Court. Under Virginia law, the Commissioner of Accounts has general supervision of all fiduciaries admitted to qualify before the Court or before the Clerk, those being Executors, Administrators, Trustees, Conservators, and Guardians. A person is called an Executor when he or she is named under a Will, and is called an Administrator when there is no Will. Collectively, they are called Personal Representatives.
Virginia is the only jurisdiction in the United States with a system comparable to the Commissioner of Accounts system. The system began in 1849. All other states have Probate Courts and Probate Judges. Virginia does not.
b. Role of Commissioner of Accounts
What are the duties and responsibilities of the Commissioner of Accounts?
The Commissioner of Accounts provides general supervision of Personal Representatives within the Court=s jurisdiction. My office ensures that Personal Representatives properly dispose of the Estate assets under their control. The Commissioner also holds hearings to resolve disputes between the Personal Representative and beneficiaries or creditors.
What is the volume of cases being handled by the Arlington Commissioner of Accounts office and how is it staffed to support that workload?
In Arlington County, the Commissioner=s office has about 800 account filings each year. We have two full time and one part-time staff members. The Commissioner=s office is located in the Arlington County Courthouse, 1425 N. Courthouse Road, Suite 6500. Our office is open Monday through Friday, 8:30 a.m. to 4:30 p.m. Our staff members are available to speak with Personal Representatives and beneficiaries by telephone or in person. Although we never turn a person away, it is better for all if an appointment in made for a consultation.
c. Recommended Reading and Initial Steps
What information and materials are offered to each Personal Representative?
The Arlington Commissioner of Accounts has prepared an Instruction Booklet for Administrators and Executors, which is given to the Personal Representative at the time of qualification with the Probate Clerk. The Probate Clerk also hands out the Inventory forms and the Estate Account forms prepared by the Supreme Court. Our staff is prepared to answer all questions if a Personal Representative calls on the phone or sends an email.
After someone qualifies to probate an estate, whether with or without a Will, what are some of the very first steps they should take in order to be able to properly administer an estate that your office will be auditing along the way?
The Personal Representative=s very first step should be to read the Instruction Booklet carefully. One of the next steps that all Personal Representatives should take is to obtain an Estate tax identification number from the IRS. Once the Estate identification number is obtained, the Personal Representative should open a bank account which should be properly titled in the name of the Estate. It is very important to request the bank to provide copies of all cancelled checks with the monthly statements, as the Personal Representative is required to provide verification of all disbursements and distributions shown on the Accounts that are filed with the Commissioner.
d. Estate Inventory and Accountings
A critically important role of the Commissioner is to oversee, audit, and approve accountings made by each fiduciary. How does that process work?
The first step in overseeing an Estate is to make sure that the required documents are filed in a timely manner. The Virginia Code requires all Inventories to be filed within four months from qualification. The First Account covers the first twelve months of the Estate, and subsequent accounts cover each succeeding twelve month period.
If an Inventory or Account is not filed within the required time frame, our office sends a late letter to the Personal Representative. This letter gives the Personal Representative an additional thirty days to file. If we still do not have the required documents, we then issue a summons against the Personal Representative, which is served by the Sheriff. If the document is still not filed within thirty days from the issuance of the summons, we then ask the Court to issue a Show Cause rule against the Personal Representative, to show cause in open Court why they should not be removed.
All Inventories and Accounts must be completed properly and submitted with the proper verification. This means the auditor must see verification of all disbursements, sales and distributions. Proof of the assets remaining in the estate on the ending date of the account period must be provided.
Finally, we determine that all disbursements are proper and any distributions to the beneficiaries are in accordance with the Will or the List of Heirs, if an intestacy.
Can you discuss the need for verification to support what is reported to you on the inventory and accountings?
Virginia law does not require any verification of the assets listed on the Inventory, but Virginia law requires that all sales, disbursements, distributions, and Assets on Hand be verified on the Account. This enables our office to determine that the information stated on the Account is correct.
Based on the experience of your office over the years, do you have any you have any tips for filing an Estate Account?
The Personal Representative should be keeping good records from the beginning of the probate process through the time they begin to prepare the Account. If they wait to do the Account the day before it is due they could find that they are missing copies of cancelled checks, or they can’t identify the deposits made to the checking account, or are missing other
important documents. The Personal Representative should make sure to read the Instructions and Sample Account they were given at the the time of qualification. If they have questions about the preparation of the Account, they should call the Commissioner’s office for assistance.
What is the most common reason an account is not approved by your office?
Our auditors frequently have to request additional documentation to verify the disbursements, sales, or distributions to the beneficiaries. Supporting documentation for reimbursements is another thing fiduciaries forget to include.
e. Creditors of the Estate
One of the important roles of your office is to protect the Creditors of the Estate. How is that done?
If a creditor is not getting paid by a Personal Representative, they have the right to file a claim with our office. We notify the Personal Representative of the claim and make a note in our file not to approve a Final Account until the claim is either paid in full or settled in some way. If the claim is contested by the Personal Representative, the Commissioner holds a hearing to determine the validity of the claim.
f. The Insolvent Estate
An Insolvent Estate is a very serious problem. Explain for us what that means, the risks that a fiduciary faces with an insolvent estate, and how your office can help deal with insolvency?
An insolvent Estate is one where there are not enough assets in the probate Estate, to pay all the debts, taxes, administrative expenses and allowances. Virginia law provides exactly in what order these claims must be paid. Our office works with the Personal Representative to ensure that the insufficient assets are properly allocated among the claims. It is extremely important that, where the Personal Representative suspects the Estate is insolvent, the Personal Representative not pay any claims without the approval of the Commissioner. Otherwise, the Personal Representative may be in the unenviable position of attempting to ask a creditor for money back.
g. Closing Comments
Does a fiduciary need to hire an attorney or a CPA to help them get through all of these details?
With most Estates, the Personal Representative will be able to handle the Estate without professional help, especially if the Personal Representative reads the instructions and takes advantage of the assistance our office can offer. If an Estate is complicated by tax issues or other issues, the Personal Representative probably should hire a professional to assist him or her.
Do you have any final thoughts you would like to share with our viewers about the Arlington County Commissioner of Accounts Office?
Our office takes pride in serving the public. Being a fiduciary can be a challenging task, especially for a person not experienced in estate administration. We are there to help.