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Probate and Estate Administration Tips: What Steps Must Be Taken to Close the Estate?

February 23, 2023

If you are named as an executor or administrator of an estate, it is your responsibility to manage and close the estate. This is a complicated process that begins with filing a petition with the Probate Court as discussed in our prior blog post, Probate and Estate Administration Tips: What Happens When Someone Dies Owning Property? The Court will issue letters of testamentary (if you are the executor of the will) or letters of administration (if there is no will and you will be the administrator). Once that occurs, you must take charge of the decedent’s assets and execute the steps discussed below. Importantly, executors and administrators have fiduciary duties, which means that they can be held liable if they don’t act appropriately and in the best interest of the estate. Hiring a probate attorney can help avoid costly mistakes as well as expedite the closing of the estate.

An executor or administrator must handle the following to close the estate:

Take Possession of the Decedent’s Property

The probate process requires that the executor or administrator identify all of the decedent’s property and take possession of it. These estate assets must be kept separate from the executor’s personal assets. Depending on the type of property, additional steps must be taken to secure it. For example, if there are liquid assets requiring a bank account, you will need to obtain an EIN for the estate and open up an Estate account. 

Real property must be secured and protected including notifying utility companies of the decedent’s death and ensuring that bills are sent to the executor for payment. Importantly, the executor may need to record a notice of appointment with the town/county clerk where the property is located. This notice usually must be filed within a certain number of months of your appointment, however, the specific deadline may vary depending upon the jurisdiction.

If the decedent had a firearm, the executor may be required to turn it over to the police or take other action to secure the firearm, such as having it transferred to the possession of a person with the proper license.

Make an Inventory of the Decedent’s Assets

Typically, within a few months of appointment, the executor must file an inventory of the decedent’s assets with the Probate Court. The inventory will list all property owned by the decedent at the time of death in the decedent’s name. However, it will typically not include assets that pass outside of the probate process, such as jointly owned property with a right of survivorship or ‘transfer-on-death’ bank accounts.

Notify and Pay Creditors

An executor must ensure that creditors are notified and file any claim form and notices as required by the state. Note that the Probate Court may require posting a notice in the newspaper or other publication informing any potential creditors of the decedent’s death. 

Creditors must timely come forward to say they are owed money. Generally, they are given a time limit to present claims to the estate, and upon the expiration of that period, you will be able to apply to the court to proceed with the process of settling the estate obligations.

File Tax Returns and Pay Any Taxes Owed

A state estate tax return may be required to be filed in every state where the decedent was a resident or owned real estate. Notably, in some states, every estate may be required to file a state estate tax return even if no tax is owed and the estate is very small or insolvent. For example, in Connecticut, an estate tax return is required for every estate regardless of size.

At the federal level, you are only required to file an estate tax return if the estate is over the federal estate tax exemption limit. However, if the decedent was survived by a spouse, it is important to consult an attorney to determine whether it may be worth filing a tax return to take a deceased spousal unused exclusion (DSUE) election to avoid taxes upon the surviving spouse’s tax.

If any taxes are owed to the federal or state government, these must be paid from the estate assets.

Finally, a final income tax return must be filed for the decedent.

Distribute the Assets 

After expenses have been paid, the last step in order to close the estate is to distribute the assets. If there is a will, this guides the distribution. First specific bequests must be satisfied; then the remainder of the estate is distributed as directed in the will.  

Final Requirements

An executor may be required to file a final financial report or accounting with the court or provide an informal accounting to the beneficiaries, in addition to other required court forms, such as an Affidavit of Closing for the Estate.

Probate and estate administration can be a time-consuming and difficult process with numerous rules. In most cases, it is best to consult an attorney to assist you. Our attorneys are experienced in handling such matters and can help you avoid problems and close the estate as promptly as possible. Contact us to discuss your estate matter.

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