Preparing a Charge & Discharge Statement

Instructor: Martin Gibbs

Martin has 16 years experience in Human Resources Information Systems and has a PhD in Information Technology Management. He is an adjunct professor of computer science and computer programming.

Administering an estate or account brings with it the responsibility to report the flow of cash in and out. This lesson will define the charge and discharge statement, and provide guidance on how these statements are compiled.

Charge & Discharge Statement

A charge and discharge statement is an accounting statement prepared for an estate or an account. An executor (or account manager) must show accountability for estate property and income. An executor is a person or professional firm responsible for managing an estate after the owner passes away. The executor prepares the charge and discharge statement.

Think of the charge and discharge statement as a dashboard showing transactions made during the course of administering the estate. It includes the total value of the estate (called the principal), and any income, in or out. It also shows fees, expenses, and payments to beneficiaries.

The statement is also a way for the executor to show accountability for the estate. Beneficiaries and other family members can see how money and property are being distributed. A charge and discharge statement can be either quite simple or very complicated depending on the size of the estate.

This table shows a high-level breakdown of the items on the statement. It is broken into principal (total value of the estate) and income.

Principal Income
Assets Payment of income to beneficiaries
Expenses, bills, fees Income received
Material good distributed
Transferred capital from the estate

Completing the Statement

Now that we've defined the statement, let's put one together. We'll be completing this in stages, however. The final document will look like this:

charge and discharge example

Notice the statement is broken into two major pieces, principal (the value of the estate), and income. We'll start with the principal section. Notice the ''I'' statements at the beginning. This is being prepared by the executor. If this were prepared by an accounting firm, it might say ''The Trustee.''

Principal

In the principal section there are two sub-sections: charges and credits. These are similar to debits and credits in an accounting statement.

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