How to Classify Estate Distributions?

[Christopher Singley]

On Thu, Sep 23, 2010 at 6:43 AM, Mike or Penny Novack
<stepbystepfarm at mtdata.com> wrote:
> rsbrux at yahoo.com wrote:
>
>> Please excuse my posting this here.  It is really more a question about
>> accounting rather than one about GnuCash, but I have searched the web
>> diligently without finding an answer and hope that another GC user can give
>> me a tip.
>> I am preparing the accounting for my mother's estate using GC 2.29 and
>> can't figure out what to do with the distributions to beneficiaries.  The
>> forms I have found online treat distributions as a top level account........
>>
>
> Maybe somebody here does know the answer but we shouldn't (not being
> accountants) be giving advice. What I will do is suggest that you surely CAN
> find out, possibly form the web but certainly from books (and the web can
> help you find those). It's a lot of work for you work in strange territory
> acting as executor of your mother's estate. And THAT is where you begin your
> search. Not trying to directly find the answer to this specific question but
> titles like "Accounting for Estates", "Accounting for Executors", etc.

This is good advice.  The journal entries here are the least of your worries.

That being said, a trust distribution is not an item of income or
expense, so if anything related to those (or to liabilities like
accounts payable) appears, you're doing it wrong.  The top-level
account you are looking for is equity.  The transaction you want to
record is to debit an equity subaccount, and credit an asset
subaccount (such as cash or various property accounts).