Virginia's commissioners of accounts: who they are and what they do

By Joan D. Aaron, CPA

Virginia's Commissioner of Accounts system dates back to an 1849 revision in the Code of Virginia. There have been changes over the years, but the basic structure remains intact.

Virginia Circuit Courts, present in every city and county in the state, have ultimate responsibility for the system. Circuit Court judges appoint the commissioners, who must be lawyers. Commissioners supervise, review and approve the inventories and accounts of estate and trust fiduciaries, guardians, conservators and, increasingly, the work of foreclosure trustees.

There has been some speculation that foreclosures may eventually comprise the bulk of commissioners' job loads. Foreclosures continue to escalate, and revocable living trusts, which are not subject to probate and thus do not fall under the commissioners' purview, are being used instead of estates.

In no other state is there a commissioner system that closely parallels Virginia's. Some states have no official participation in the probate process. Others operate networks of probate courts, generally funded with tax dollars.

Commissioners and judges frankly acknowledge that the public comprehends little about the system and about its purpose. In fact, even the legal establishment may have an imperfect understanding of the system.

A no-nonsense attitude pervades the rules. The math on inventories and accounts must be correct — literally to the penny. (This sometimes frustrates CPAs, who are accustomed to rounding their financial statements and their tax returns up or down to the nearest dollar.) Details are important: Every dividend, every interest payment, must be separately reported. Each stock the decedent owned — even if it is one of a hundred — must be individually listed on the inventory.

The work can be tedious, even for professionals. An attorney who no longer does the actual addition and subtraction admits that it was hard for him "to get the figures to balance."

A daughter who had been named her father's executor recently revealed, "I was sure I could do the work myself." After the commissioner rejected her work for a third time, the woman engaged a CPA. An executrix is responsible for the preparation of the inventory and account. Because the document preparation was delegated to a paid professional, the commissioner will have to reduce the maximum fee that the daughter could charge.

Although it may be unique and not well understood, Virginia's system is widely considered to be both efficient and cost-effective. Virginia commissioners get no tax money. Their income derives from the fees they charge for their services. They pay their own operating expenses: office rent, assistant salaries, office supplies, computer expenses, etc. Their take-home pay is the net, which can be considerable. One commissioner disclosed that his taxable income in his first year on the job was in excess of $100,000. He had been advised that he was under no obligation to make the disclosure, but he nevertheless chose to do so. The revelation was in response to a newspaper inquiry.

The Circuit Court, not the commissioners, sets commissioner fees, and the current fee schedule had to receive approval from the Virginia Supreme Court. This schedule mandates that fees should be based on a percentage of the value of properties involved and/or on a percentage of the income such properties generate. However, if a commissioner performs extra work, he or she may, with Circuit Court permission, raise the fee.

Each commissioner controls his or her personal work situation. He can operate as a sole proprietor. He can be a partner in a prestigious law firm. He can be shareholder in a professional corporation. He can work full or part time. If he wishes, he can even run for elected office. One commissioner is serving as a member of the current Virginia General Assembly and several are former members.

Some legislators, among them both Republicans and Democrats, are concerned about how commissioners are currently appointed. Members of the General Assembly appoint the Circuit Court judges and those judges in turn appoint the commissioners of accounts. Some legislators question if this system could give rise to a perception of impropriety.

Commissioners' releases, available online, leave the reader with the impression they truly want to do what is fair. Their rules are framed so as to take into consideration rights of all concerned — beneficiaries, creditors and the government. Before an executor makes distributions to estate beneficiaries, he must satisfy himself that funeral bills have been paid. All necessary federal and state tax returns must be filed; all taxes must be paid. If an executor fails to deliver a specific bequest within a year, he becomes liable for interest on the funds.

So, has consideration has been given to permitting CPAs to become commissioners? After all, CPAs are frequently involved in the hands-on preparation of inventories and of accounts. Actually, yes.

Current law is clear. Only "attorneys-at-law, discreet and competent," may serve as commissioners of accounts. In 2012, the Virginia Senate reviewed a bill that would have allowed "certified public accountants licensed in Virginia" to serve as commissioners. The VSCPA neither supported nor opposed the bill, and the Senate forwarded the bill to the Courts of Law. By a unanimous vote of the Court’s seven lawyers and five non-lawyers, the bill was "passed by indefinitely." It was dead, so lawyers remain the only commissioners of accounts in the Commonwealth.

Joan D. Aaron, CPA, was a Life member of the VSCPA. Up until her death in 2020, she continued working part-time with Malvin Riggins & Company, PC, in Newport News. She was a long-time member of the VSCPA Editorial Task Force and was the first woman to serve on the Virginia Board of Accountancy, which she also chaired. Read Joan's obituary to learn more about this remarkable Virginia CPA and trailblazer.