When Is an Estate Considered Settled?

By John Cromwell

When a person dies, his property is gathered into an estate. The estate is formed for the purpose of settling his outstanding liabilities and distributing what remains to his heirs and beneficiaries. The process for distributing a decedent’s estate varies by state. As a result, review the laws of the state where the decedent lived to determine the process related to your specific set of circumstances. Generally, an estate is considered settled when a court declares the estate closed.

When a person dies, his property is gathered into an estate. The estate is formed for the purpose of settling his outstanding liabilities and distributing what remains to his heirs and beneficiaries. The process for distributing a decedent’s estate varies by state. As a result, review the laws of the state where the decedent lived to determine the process related to your specific set of circumstances. Generally, an estate is considered settled when a court declares the estate closed.

Initiating Probate

The legal process of settling an estate is known as probate. The process begins when a court learns of a decedent’s death, generally due to an interested party filing for a probate proceeding. The court will begin reviewing possible copies of the decedent’s will, checking to see that it was appropriately drafted. The court will validate one will as controlling over the estate. The court then appoints the executor named in the will to oversee the estate. If no valid will exists, the court will appoint an administrator.

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Role of the Executor or Administrator

The person chosen to oversee the estate must determine what property is in the estate and establish the property's value. Probate property is anything that is solely titled in the decedent’s name. Jointly-owned property, life insurance policies and retirement accounts are generally excluded from probate estates. The executor must then pay the decedent’s outstanding debts using the estate's assets. The remaining property is distributed to the beneficiaries named in the will. If there is no will, the assets will be distributed to the decedent’s relatives, known as heirs.

Terminating Probate

The probate court will review all related paperwork regarding the administration of the estate. Once the court is assured the estate’s assets have been distributed in accordance with state law, it will issue an order declaring the estate closed. Once the estate is closed, all of the administrator’s responsibilities are terminated and no other claimant or potential heir can try to make a claim for the decedent’s assets.

Small Estates

Some states permit estates with small asset valuations to be settled outside of probate. Illinois, for example, allows an estate without real estate and valued at or below $100,000 to be resolved using an affidavit. The administrator of the estate would still gather the decedent’s assets, pay off liabilities and distribute the remaining assets to the appropriate heirs. However, the administrator would do this without court supervision. Once the process is completed, the estate’s administrator completes an affidavit regarding what assets composed the estate, how those assets were distributed and confirm all of the decedent’s outstanding claims were paid. The administrator submits the completed affidavit to the probate court, which reviews it and then closes the estate once it is satisfied all steps were properly followed. Check your own state’s laws to see if it has a similar procedure.

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References

Related articles

How to Apply as an Administrator of an Estate

In probate law, the terms executor, administrator and personal representative are often used interchangeably. Administrators settle the estate of a deceased person, known as a decedent, and they apply for the position. Although court fees are involved, administrators are often compensated for their duties from the assets of the estate.

Probate Process & Formal Reading of a Will

Probate is the legal process of reviewing and administering the estate of a deceased person -- called a decedent -- in the appropriate probate court. When a decedent leaves behind a valid will, it is referred to as dying “testate” and the adjudicating court is bound to follow the instructions defined therein. While probate can be lengthy, lasting anywhere from a few months to two years, the process is necessary to settle all of the decedent’s unresolved matters while ensuring his final wishes are carried out properly.

What Is the Meaning of Settle Estate?

A Last Will and Testament contains instructions for the distribution of a person's assets, also referred to as the estate, when he dies. The will names a specific person, known as the executor, to act as the estate's representative. The executor, sometimes referred to as the administrator, must collect the decedent's assets, pay his debts and estate taxes, and distribute his remaining assets to the heirs named in the will. This process, called settling the estate, occurs under the supervision of the state probate court.

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