Browse estate and trust terminology
Estate Accounting Terms
These terms describe the arithmetic and recordkeeping used to explain what came into an estate, what went out, and what remains. Use the Estate Accounting & Reconciliation Calculator to check the numbers. Estate Accounting & Reconciliation Calculator.
Estate Accounting
A record of estate assets, receipts, gains, expenses, debts, taxes, distributions, losses, and assets remaining during an administration period.
Accounting Period
The span of time covered by an estate, trust, or fiduciary accounting, with a beginning date and an ending date.
Opening Inventory
The assets and values used as the starting point for an accounting period, often based on an inventory or prior accounting.
Additional Assets Discovered
Assets identified after the opening inventory that must be added to the property being accounted for.
Receipt
Money or property received during the accounting period, including income, refunds, sale proceeds, reimbursements, or other inflows.
Income
Earnings received by an estate or trust, such as interest, dividends, rent, or other income, subject to the applicable accounting treatment.
Disbursement
Money paid out by an estate, trust, or escrow account for an authorized purpose, expense, debt, tax, distribution, or other obligation.
Administration Expense
A cost incurred in administering an estate or trust, such as professional fees, filing costs, property expenses, or other administration charges.
Creditor Claim
A demand for payment asserted against an estate or other fund; whether and how a claim is paid depends on the governing documents and applicable law.
Gain or Increase
An amount that increases the property being accounted for, such as a realized gain or another accounting increase entered for reconciliation purposes.
Loss or Decrease
An amount that reduces the property being accounted for without being treated as a distribution or ordinary expense, such as an entered loss or decrease in value.
Ending Assets
The cash, investments, property, or other assets still held at the end of the accounting period.
Accounting Variance
The difference between the amount that should remain after entered activity and the ending assets actually entered in the accounting.
Reconciliation
The process of comparing independent totals or sides of an accounting equation to identify whether they agree and, if not, the amount of the difference.
Beneficiary Distribution Terms
These terms describe how an available estate or trust pool may be allocated and how prior distributions affect what remains due. Use the Beneficiary Distribution Calculator for the arithmetic. Beneficiary Distribution Calculator.
Beneficiary
A person or entity entitled or potentially entitled to receive property, income, or another benefit from an estate, trust, account, or other arrangement.
Distributable Amount
The amount entered as available for allocation after any reserve, holdback, or other amount not currently being distributed is removed.
Residuary Estate
The portion of an estate remaining after applicable debts, expenses, taxes, specific gifts, and other required charges or transfers are accounted for.
Specific Bequest
A gift of identified property or a specifically described asset under a will or other governing instrument.
Pecuniary Bequest
A gift stated as a fixed dollar amount rather than as a percentage or specific item of property.
Beneficiary Share
The portion of an estate or trust allocated to a beneficiary under the governing instrument, applicable agreement, or other controlling authority.
Pro Rata Share
A proportionate share calculated according to an entered percentage or ratio.
Interim Distribution
A distribution made before final administration or final accounting is complete, usually leaving other property or reserves still held.
Prior Distribution
An amount already distributed to a beneficiary that should be considered when determining what remains due under a later distribution calculation.
Final Distribution
A distribution intended to transfer the remaining amount due after administration, reserves, prior distributions, and other required adjustments are accounted for.
Distribution Schedule
A worksheet or report showing the amounts allocated, previously distributed, currently due, or otherwise associated with each beneficiary.
Overdistribution
A condition in which prior or current distributions to a beneficiary exceed the target amount produced by the entered distribution assumptions.
Underdistribution
A condition in which a beneficiary has received less than the target amount produced by the entered distribution assumptions.
Trust Accounting Terms
These terms describe the books and ledger concepts used when tracking money held in trust. Use the Trust & Escrow Reconciliation Calculator to compare book, bank, and ledger totals. Trust & Escrow Reconciliation Calculator.
Trust
A legal arrangement in which a trustee holds or administers property under a governing instrument for one or more beneficiaries or purposes.
Trustee
A fiduciary who holds or administers trust property according to the governing instrument and applicable requirements.
Trust Accounting
The recordkeeping used to track trust property, receipts, income, disbursements, allocations, distributions, and balances over time.
Trust Principal or Corpus
Property treated as principal of a trust rather than current income, subject to the governing instrument and applicable accounting rules.
Trust Income
Income attributable to trust property, such as interest, dividends, rent, or other earnings, subject to the governing instrument and applicable accounting rules.
Trust Receipt
Money or property received into the trust and recorded in its accounting records.
Trust Disbursement
Money paid from trust funds and recorded as an outflow in the trust accounting records.
Trust Ledger
A record of transactions and balances for a trust account, trust matter, beneficiary interest, or other tracked trust activity.
Client or Matter Ledger
A subsidiary ledger that shows the transactions and balance attributable to one client, matter, beneficiary, or other separately tracked owner of funds.
Book Balance
The balance produced by the accounting records after recorded receipts, disbursements, credits, fees, and adjustments are applied.
Three-Way Reconciliation
A comparison of the book balance, adjusted bank balance, and total subsidiary client or matter ledger balances to determine whether all three agree.
Escrow Reconciliation Terms
These terms describe the bank-reconciliation side of funds held temporarily or for a designated purpose. The Trust & Escrow Reconciliation Calculator can compare the core balances. Trust & Escrow Reconciliation Calculator.
Escrow
Money, documents, or property held by a third party or fiduciary for release or application when specified conditions are satisfied.
Escrow Account
An account used to hold escrow funds separately for an identified transaction, matter, purpose, or group of matters, subject to the applicable requirements.
Bank Statement Balance
The ending balance reported by the financial institution on the bank statement before reconciling outstanding or timing items.
Adjusted Bank Balance
The bank statement balance after adding or subtracting entered reconciling items such as deposits in transit or outstanding checks.
Deposit in Transit
A receipt recorded in the books that has not yet appeared as a completed deposit or credit on the bank statement being reconciled.
Outstanding Check
A check or withdrawal recorded in the books that has not yet cleared the bank statement being reconciled.
Reconciling Item
A timing difference, bank activity, posting issue, or other identified item used to explain why two reconciliation balances differ.
Reconciliation Difference
The dollar difference between two balances that should agree after the relevant reconciling items are entered.
Escrow Reconciliation
The process of comparing escrow accounting records with bank activity and any subsidiary ledgers to identify whether the balances agree.
Reserve and Holdback Terms
These terms describe amounts intentionally retained instead of immediately distributed. Use the Beneficiary Distribution Calculator to see how an entered reserve changes the current distribution pool. Beneficiary Distribution Calculator.
Reserve
An amount intentionally retained rather than currently distributed so funds remain available for future obligations, expenses, taxes, claims, adjustments, or uncertainty.
Administration Reserve
A reserve retained for expected or possible costs of completing administration, such as professional fees, property expenses, filing costs, or other remaining charges.
Tax Reserve
An amount retained for expected or possible tax liabilities, return preparation costs, estimated payments, or tax adjustments.
Claims Reserve
An amount retained because a creditor claim, reimbursement demand, disputed obligation, or other potential liability has not been finally resolved.
Distribution Holdback
An amount withheld from an otherwise available distribution pending a future event, calculation, approval, release, tax issue, claim resolution, or other matter-specific condition.
Contingent Liability
A possible obligation whose existence or amount depends on a future event or unresolved circumstance.
Fiduciary Terminology
These terms identify common roles and concepts that appear in estate, trust, and fiduciary administration. The definitions are general and do not determine a person's legal authority or duties in a specific matter. Estate Accounting & Reconciliation Calculator.
Fiduciary
A person or entity acting in a position of trust or responsibility for property, money, interests, or affairs belonging to or benefiting another person or entity.
Fiduciary Capacity
The role in which a person or entity acts as a fiduciary, such as personal representative, executor, administrator, trustee, guardian, or another authorized role.
Personal Representative or Executor
A fiduciary authorized to administer a decedent's estate under the applicable appointment, governing instrument, and law.
Administrator
A fiduciary appointed or authorized to administer an estate, commonly when an executor is not serving or another form of administration applies.
Decedent
A person who has died and whose property, obligations, or affairs may be subject to estate administration.
Estate
The property, rights, obligations, and interests associated with a decedent or other legally recognized estate being administered.
Fiduciary Accounting
An accounting prepared by a fiduciary to explain property received, transactions during the accounting period, distributions, and property remaining.
Principal and Income Allocation
The classification of a receipt, expense, gain, loss, or other item between principal and income according to the governing instrument and applicable accounting rules.
Accounting to Beneficiaries
The process of providing beneficiaries or other entitled persons with an accounting or financial report concerning fiduciary administration, when required or appropriate.
How the glossary connects to the calculators
- Reconcile estate activity. Use terms such as opening inventory, receipts, disbursements, ending assets and accounting variance with the Estate Accounting & Reconciliation Calculator.
- Plan beneficiary distributions. Use the concepts of distributable amount, reserve, beneficiary share and prior distribution with the Beneficiary Distribution Calculator.
- Reconcile trust or escrow funds. Use book balance, adjusted bank balance, client or matter ledgers, deposits in transit and outstanding checks with the Trust & Escrow Reconciliation Calculator.