We want to explain the essential practice of guardianship accounting. It’s all about managing the money for people who can’t do it themselves, like those who are too young or unable to care for their finances.
Guardianship accounting means keeping detailed records of all the money-related stuff for these people. It includes keeping track of the money they get, the things they spend, what they own, and any other money-related things that affect them.
Why is guardianship accounting so important? Well, there are several good reasons:
Taking Responsibility: The people who care for the money (called “guardians”) are legally bound to do what’s best for these individuals. Keeping good records helps them show that they’re doing their job responsibly.
Protecting the Money: By keeping track of everything, the guardians can ensure that the money is used for the right things and not wasted or used improperly.
Court Oversight: The court wants to ensure these individuals are being cared for properly. So, they ask for reports on how the money is being managed.
Transparency: With good records, everyone can see what’s happening with the money. This openness builds trust among everyone involved.
Guardianship accounting is usually done once a year or as the court tells them to do it. During this time, the guardians gather all the money-related papers for that year, like bank statements, receipts, and bills.
The process involves the following steps:
Gathering Financial Information: The guardian collects all relevant financial documents, such as bank statements, receipts, and bills, for the accounting period.
Recording Transactions: Meticulous documentation of all income received, and expenses paid on behalf of the ward ensures accuracy.
Preparing Financial Statements: Using the gathered information, the guardian creates comprehensive financial statements, including income and expense statements, balance sheets, and cash flow statements.
Submitting to the Court: The guardian submits the report for review and approval once the accounting is complete.
Maintaining Records: Proper documentation is essential to validate the accuracy of the financial statements, and the guardian must retain all supporting records.
Learn how our expert team can help manage money for those who can’t do it themselves. Schedule your assessment! Click here, reply to this email, or call us at (850) 829-3733