How to Finalize an Estate

By Marie Murdock

An executor, or personal representative, of an estate may feel after months of gathering assets, paying bills and dealing with family members that her duties may never end. Even though some estates may be more complex than others, eventually the probate process winds down, the estate closes and the personal representative no longer has an obligation to the heirs of the estate.

Personal Representative’s Responsibilities

The executor’s responsibilities begin in earnest after the court appoints her to act through the issuance of letters testamentary. Some of her initial responsibilities will be to determine debts, notify creditors, gather, valuate and inventory assets and communicate with heirs. She may be responsible for determining a surviving spouse's or children’s rights in a family home.

Expiration of Claims Period

Unknown or undetermined creditors or heirs having a claim against the estate, if any, will usually be notified by publication in a local newspaper. Most states have a statutory period of several months, referred to as the claims period, when creditors or unknown heirs may come forward to claim an interest in the assets.

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Payment of Debts

Once the claims period has expired, the executor will pay outstanding debts and claims from the liquid assets. If there are not enough liquid assets available to pay all debts due, he may be forced to sell or liquidate other assets, such as vehicles or real estate, to pay the remaining debts.

Estate Tax Return

It may be necessary to file an estate tax return to determine the estate’s tax liability. The executor will need to file a final return and pay all taxes before distributing assets and closing the estate.

Distribution of Assets

Whether property is given directly to beneficiaries or sold so that each gets a monetary share, assets should be distributed according to the terms of the will. Even though real property may have vested upon death in beneficiaries, subject to the rights of the executor to pay debts, the personal representative may execute a deed to the named beneficiaries or those entitled to inherit. If the property is sold to a third-party purchaser, the executor or the heirs, or both, depending on state laws or requirements of a title insurer, will represent the interests of the estate at closing and sign necessary paperwork. The executor should exercise care in determining that all documents requiring the estate signature have been completed, leaving no loose ends that would require reopening the estate.

Final Actions and Discharge

Once the debts have been paid and all assets distributed, the executor may petition the court for an order of final settlement of the estate. This petition may detail his actions as executor and include the filing of a final inventory and accounting which is also made available to interested parties. In some states, consents to final settlement filed by the heirs eliminate the need for filing of a full final accounting or a final hearing. Once the court is satisfied that all estate matters have been satisfactorily finalized, it may issue an order closing the estate and discharging the executor from further responsibilities.

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When to Notify the Executor of a Will



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