What is a Charge And Discharge Statement

A charge and discharge statement is an accounting statement for an account or estate over which someone has a fiduciary responsibility. Charge and discharge statements ultimately reconcile all distributions of income and principal going into and out of the account or estate. Thus fiduciaries are given a clear snapshot of the cash flow that they are administrating.

BREAKING DOWN Charge And Discharge Statement

The charge and discharge statement of an estate is produced for several purposes. The document lists the assets originally included in the estate. The statement also reports assets that have been distributed to date to satisfy debts, expenses or the stipulations of the decedent's will. It lists all of the charges of principal that are paid on the principal in the account or estate. Then they delineate the discharges, or fees and expenses, related to the principal that are paid out. Then the statement repeats this process for income that is received and paid. These statements typically also record such items as administrative fees and expenses, income taxes, and investment income. It also includes the value of the assets still being held and indicates whether they are attributed to principal or income.

Charge and Discharge Fiduciary Accounting was the most popular form of fiduciary accounting in the 19th century, explained Robert Whitman, a professor at the University of Connecticut School of Law in an industry newsletter. Now, computers have simplified the process and allow professionals to more easily generate periodic fiduciary accounting statements with a greater amount of information statements that beneficiaries can easily understand. The statements now also provide performance data, enabling beneficiaries to gain an in-depth understanding of the details of the estate's or account's administration on a regular and ongoing basis.