Guardianship Annual Accounting From Bank Statements

A guardianship annual accounting shows the court what the ward had at the start of the year, what came in, what was spent and what is left. Build it from the ward's bank statements: sort a year of rows into the categories on the court's form, then check that the beginning balance plus income minus spending equals the year-end balance.

What does a guardianship annual accounting report?

A guardianship annual accounting reports how a guardian managed the ward's money over one accounting period. It starts from the assets on hand, adds everything received, subtracts everything spent, and ends with the assets left. The court reads it to confirm the money was used for the ward and that nothing went missing.

Courts set their own forms and deadlines, so the court that appointed you decides the exact format. The guidance from two county courts shows what the job usually involves.

The probate office in Dane County, Wisconsin, explains in its guidelines for preparing a guardian's annual account that guardians of the estate must file the "Account of Guardian or Conservator" by April 15 each year. The account should show that "expenditures are proper and that all income and assets are accounted for and properly managed and invested". It is organized in schedules: income received, money spent, and assets on hand at December 31.

The clerk of court in St. Johns County, Florida, publishes a guardianship accounting checklist that adds a practical test: provide the bank statements that support the ending balance of each account.

In both, the bank statements are the backbone. The income and spending schedules are the statement rows, sorted. The assets on hand are the closing balances. Everything else on the form is a total of one or the other.

Guardianship accounting periods: the starting balance and the year end

The guardianship accounting period sets which statements you use and which number you start from. In a first accounting, you begin with the total on the inventory filed when you were appointed. Every later accounting begins with the previous year's ending balance. Getting this opening figure right is the first step.

The Dane County guidelines put it directly: the first account "begins with the Inventory total", and "subsequent accounts will always begin with the previous year's ending balance and cover the calendar year". The St. Johns County checklist makes the same point as a check: "make sure the beginning balance matches the prior year's ending balance."

The year end is the other anchor. Dane County suggests using the bank's statement values as of December 31, and including only transactions completed before that date. A check written on December 29 that the bank did not pay until January 4 belongs in next year's account, not this one.

Bank statement cycles rarely end on December 31. If the ward's statement runs from December 15 to January 14, you need the balance at the close of December 31, not the statement's closing balance. Read the running balance after the last December line, or ask the bank for a year-end balance letter if the statement does not print one.

Before sorting anything, collect:

• Every statement for every account in the ward's name that overlaps the period.
• Last year's filed accounting, for the ending balance.
• The inventory, if this is the first accounting.
• The year-end figure for each account.

Sorting a year of the ward's statement rows into guardianship categories

Sorting means giving every statement row a category and adding up each category for the year. The court wants totals grouped by kind of expense, not every purchase listed, but also not unlike costs lumped together. A year of statements usually reduces to fifteen or twenty category lines.

The Dane County guidelines give a clear example of the right level of detail. A guardian who spent $250 on clothing for the ward should report "Clothing for ward – $250.00" as one entry rather than listing each purchase. In the other direction, the guidelines warn against combining dissimilar costs, such as "Rent, food and recreation – $5,500.00", into a single line.

Start by turning the statements into rows in a spreadsheet: date, description, amount in, amount out. Then add a category column and work down it. Sorting by description groups repeat payees together, so the twelve rent payments, the twelve pension deposits and the pharmacy charges can each be labeled at once.

Typical categories for a ward living in care or at home:

• Income: Social Security, pension, interest, refunds, insurance payments.
• Housing: rent or care-facility fees, utilities, repairs.
• Personal: food, clothing, personal care, phone.
• Medical: prescriptions, co-pays, equipment.
• Administrative: bond premium, court fees, attorney fees if approved.

Insurance money needs special care. If the ward's property was damaged and an insurer paid out, the payment is income for the year, and the claim paperwork is its backup. Bank statements as proof of purchase in an insurance claim covers using the ward's older statements to support that claim in the first place.

How does the guardianship balance check work?

The guardianship balance check confirms the account adds up: beginning balance, plus total income, minus total spending, must equal the assets on hand at year end. If the two sides differ, a row was missed, counted twice, or placed in the wrong year, and the court will see the same gap.

The Dane County guidelines say the grand total on the assets-on-hand schedule "must correspond to the Ending Balance". They list the most common causes of a mismatch: double-counting or omitting items at the start or end of the period, and changes in the market value of investments that were not recorded as a line item.

A worked example

The figures below are an example for a ward with one checking account. They are made up.

When the difference is not zero, compare its size with your rows. A gap that matches one transaction exactly is usually a missing row. A gap of twice a transaction is usually a row entered on the wrong side.

A spreadsheet is all this takes. A one-account guardianship does not need bookkeeping software, and if you are tempted, what small business accounting software costs per year puts a price on it. To get the rows into the sheet without typing, CheapBankConvert, which is preparing to open, converts a PDF statement into Excel or CSV for one payment per document, and its early pricing lists a bundle of 5 statements at $9.99. See how it works.

Guardianship accounting red flags: shared bills, cash and paying yourself

Some transactions draw questions in any guardianship annual accounting because they can benefit someone other than the ward. Cash withdrawals, shared household costs and payments to the guardian are the usual ones, and some courts require permission before you make them at all.

The St. Johns County checklist is blunt about the standard: "make sure all purchases are for the benefit of the ward… only the ward." It asks for receipts for any purchase made from cash or ATM withdrawals, and it lists transactions to petition the court about first, including:

• Paying yourself as guardian.
• Buying real estate or other expensive items such as cars.
• Making large gifts to family, friends, churches or charities.
• Lending money.
• Spending the ward's money for someone else's benefit.

Shared bills are the subtle case. If the ward lives with you, the ward's account may pay part of the rent, groceries or utilities. Only the ward's fair share belongs there, and you should be able to show how you worked it out. A written split, the same way roommates divide costs, is the clearest record; splitting shared expenses between roommates from statements shows a method that also suits a household with a ward in it.

Cash is the other trap. An ATM withdrawal shows on the statement with no payee. Keep the receipts for what the cash bought, or avoid cash and pay by card or check from the ward's account so the statement names the payee.

What proof goes with a guardianship annual accounting?

Proof for a guardianship annual accounting is mainly the bank statements that support the year-end balance, plus receipts for anything the statements cannot explain. Courts generally want copies, not originals, and account numbers shortened to the last few digits. Check your court's own instructions, because the details vary.

From the two county guides quoted here:

1. Statements supporting the ending balance. St. Johns County asks for the statements that support each account's ending balance.
2. Credit card statements. St. Johns County asks for all statements for the year if any card purchases were made or a balance is outstanding.
3. Receipts for cash spending. Also St. Johns County.
4. Copies, not originals. Dane County asks guardians to send copies of documents verifying asset values as of December 31, or to have a bank official sign the verification on the form.
5. Last four digits only. Dane County says to list only the last 4 digits of account numbers, so accounts can be identified while keeping financial account numbers confidential.
6. A copy for yourself. Dane County asks guardians to keep a copy of the completed account.

Assemble the proof in the same order as the form: income backup, spending backup, then the year-end statements for each account. Put the statement month on each page you attach, so the clerk can match it to the line it supports.