Manage Estate Cash

The Cashflow tab is a place for you to record cash flowing into and out of the estate. You use the Cashflow tab to record estate expenses (such as utility bills or tax payments), income (such as stock dividends or interest payments), asset sales, debt payments, and ultimately, cash distributions to heirs.

Cashflow tab showing imported transactions

Getting Started

You control which asset's transactions you are viewing via the asset selector in the top right of the tab. In the example diagram above, transactions involving the asset named "Estate Checking Account" are being displayed.

It's best practice to open an estate account and handle estate transactions using that account. However, it can sometimes be necessary to deal with transactions within other estate assets as well, and you can use the asset selector to work with those assets as needed (see Asset Transactions for advice on such transactions).

In any case, when you enter your first transaction, EstateExec will ask you if you want to create an estate account asset (unless you have already done so on the Assets tab). You can choose to do so, or proceed to enter a transaction for a different asset. You will have the opportunity to choose the affected asset for each transaction you enter.

When dealing with an estate account, note that there are 3 common ways to make an initial deposit:

  • Transfer: You can transfer money from an existing asset to the estate account (see Transfer below).
  • Sell: You can sell an existing asset, depositing the proceeds into the estate account (see Sale below).
  • Loan: You (or anyone) can loan the estate money, recording the deposit of Category "Executor Loan to Estate", and creating a new Debt.

Manual Entry versus Automated Bank Downloads

You can enter transactions yourself, and/or download them automatically from your estate account's bank (most banks and financial institutions in the US and Canada are supported).

Many people don't discover EstateExec until partway through the settlement process, and the ability to automatically download previous bank activity can be a real time-saver. That being said, you will likely find it easier to record some things via manual entry (such as executor expense reimbursements).

Note that each EstateExec estate supports a connection to at most one bank, for a single asset (typically, the estate account). You can download transactions from your chosen bank whenever you like.

The rest of this page explains how to manually create and manage transactions; see Bank Import for instructions on automatic downloads, as well as potentially integrating with manually created transactions.

Creating a Transaction

To manually create a new transaction,

  1. Click the "Create Transaction" button on the Cashflow tab.
  2. In the top right of the Transaction dialog that appears, select the Asset for the transaction (e.g., the estate account).
  3. Select the Type of transaction for the asset: Deposit, Withdrawal, or Adjustment.
  4. Enter the remaining requested information, and press the "OK" button.
  5. Your new transaction will appear in the appropriate date-sorted position in the table of transactions. If you enter a very old transaction, you may need to extend the list to include older dates if you want to see it in the table.

To later change a transaction, simply click on any cell in its row, and the Transaction dialog will appear. Make any desired changes, and press OK.

The sections below provide specialized instructions for specific types of transactions.

Record a Bill Payment

To record a bill payment for a:

  • New Estate Expense: Simply create a new transaction, and enter the requested information (the transaction dialog is set to record general expenses by default, so no need to set Type:Withdrawal and Category:Estate Expense, but you may wish to change the category to something more specific if appropriate).
  • Debt at Death: If the debt existed at the time of death, first make sure the debt has been entered on the Debts tab, then follow the instructions for Paying Off a Debt.
  • Estate Loan: If you borrowed money for the estate, first make sure the loan has been entered on the Debts tab (via the Borrow button), then follow the instructions for Paying Off a Debt.

Transfer Funds Between Assets

To record that you have transferred money from one asset to another,

  1. Click the "Create Transaction" button on the Cashflow tab, causing the Transaction dialog to appear.
  2. Ensure you have selected the source of the funds in the asset selector in the top right of the dialog.
  3. Select Type "Withdrawal" and Category "Transfer".
  4. Select the other asset involved from the Item list.
  5. Enter the remaining information in the dialog and press "OK".

You can accomplish the same thing even more easily via the Assets tab: simply select the desired source asset and use the Edit | Transfer menu.

Reimburse Executor Expenses

It's common for the executor to incur expenses that should be reimbursed by the estate: you can use the Expense Log on the Executor tab to track and manage these expenses (see Log Executor Expenses for instructions).

When the time comes to make a reimbursement, you can record it directly from the Executor Expense Log (causing it to also appear as Cashflow Transaction), or you can accomplish the same thing by creating a Cashflow Transaction of Type "Withdrawal" and Category "Reimbursement".

Create a Distribution

To create a distribution to an heir,

  1. Click the "Create Transaction" button on the Cashflow tab, causing the Transaction dialog to appear.
  2. Select Category "Distribution".
  3. Enter the remaining requested information, and press the "OK" button.

Your new distribution will appear in the appropriate date-sorted position in the table of transactions. If you did not set a date (because the distribution has not yet actually been made), then it will only appear if the "Include future Plans" checkbox is selected at the top of the table. For your convenience, EstateExec automatically turns on this checkbox when you create a new future distribution.

You may find it easier to create and manage distributions via the Distributions tab: see also Manage Distributions.

Borrow Money for the Estate

Sometimes an estate needs to borrow money to pay certain expenses before estate funds become available. To record such a transaction (which will create a new Debt of Type "Executor Loan" and automatically record the deposit of the loan amount into the asset selected in the top right of the Transaction dialog),

  1. Click the "Borrow" button on the Debts tab.
  2. Fill in the Transaction dialog that appears, and press OK.

Deposit Sale Proceeds

To record that you have deposited the proceeds from an asset sale, simply record the asset sale on the Assets tab and EstateExec will automatically create the corresponding transaction for you.

  1. Click the asset's "Sold" cell on the Assets tab.
  2. Enter the requested information in the dialog that appears, ensuring that the asset selector in the top right shows the account into which you deposited the sale proceeds, and press "OK".

Record Loan Repayment

To record that a loan from the estate (i.e., a loan the decedent or the estate made to someone else) is being repaid,

  1. Click the "Create Transaction" button on the Cashflow tab, causing the Transaction dialog to appear.
  2. Select Type "Deposit" and Category "Loan Repayment".
  3. Select the loan involved from the Item list.
  4. Enter the remaining information in the dialog and press "OK".

To record that a loan to the estate (i.e., often from the executor) is being repaid, follow the above instructions, but select Type "Withdrawal" and the desired Category.

In both cases, these repayment transactions should include only principal, since EstateExec will automatically reduce the loan's current asset value (and remaining cost basis) according to the transaction amount. If the payment involves interest, you should split it apart and also record a separate interest transaction.

Forgive Loan

To record that a loan from the estate is being forgiven, see Asset Disposal (you are basically discarding the loan asset). Be careful when forgiving a loan from the estate – as the executor you may be able to write off a bad loan for which there is no chance of collection, but you do not have authority to simply decide to be generous to someone. See also Forgiving Heir Debts.

To record that a loan to the estate is being forgiven, see Forgive Debt (you must do this from the Debt tab, as no cash actually changes hands).

Adjust Value

Sometimes there's no real-world transaction that corresponds to an asset's value change (for example, market conditions have changed over time, and the value of a house has increased from $450K to $500K).

In such cases, you can enter a transaction of Type "Adjustment", and select a Category of "Increase", "Decrease", or "New Value". Increase and Decrease are relative, and change the value by the amount specified (e.g., an increase of $50K). The category New Value is powerful, and simply sets the value absolutely (e.g., $500K), regardless of what has come before. This category can be convenient, but be aware that any transactions you enter for an earlier date will no longer have any effect on the asset's current value.

It's usually a waste of time to continuously update the market value of assets: you really only need the latest value when you are generating an Accounting report, or when recording the settlement of an asset (e.g., distributing it, selling it, etc.). And if you sell an asset, there is no need within EstateExec to first adjust its value: you can simply enter the net sales price within the sale transaction dialog, and EstateExec will understand that the final value of the asset was the sale price.

You can also use the Adjustment transaction type if you simply cannot make an account balance (this is very traditional in checkbook balancing, and accounting in general, although it can be hard to explain to a judge). In such cases, it is best to use the Increase or Decrease category.

Notes

Here are a few other helpful things to know about the Cashflow tab:

  • Alternate Entry Methods: Any transaction that involves an external item (e.g., an asset, debt, distribution, executor reimbursement) can be created and edited from the Cashflow tab, or from the corresponding item's tab. For example, you can record an asset's sale from the Assets tab, or on the Cashflow tab. In either case, the data will be updated in the other place as well.
  • Category: When defining a standard transaction, you must assign a category to the transaction. The list of categories automatically changes depending on whether you are recording a deposit or a withdrawal.
  • Item: When defining a transaction, if you select the "Asset Sale" or "Debt Payment" category, a list of defined estate items (i.e., assets or debts) will become available in the "Item" field. Grayed out items are unavailable for selection (for example, because they've already been paid off, sold, distributed, or whatever). You can narrow the list by typing a sequence of letters that must appear in the item's name.
  • Include Older Transactions: Because you may end up recording a significant number of transactions throughout the course of managing the estate, EstateExec does not automatically show all transactions in the Cashflow table. To see more transactions, click the "Include Older Transactions" button in the bottom right of the table. If that button says "All dates included", it means there are no more transactions.

See also Using Tables for an illustration of many things you can do with EstateExec tables in general.

Copyright © 2014-22 EstateExec