Estate Administration and Estate Distribution: A Guide to Finalizing the Process

February 23, 2023
Erin Calpin, Esq.

Properly finalizing and closing out an estate administration is crucial for a successful conclusion to the estate administration process.   For a successful estate administration, the executor (or estate administrator) must first fully understand his or her role and the fiduciary duties involved in the probate process.

The Role of the Executor

The executor is the individual appointed in the decedent's Last Will to handle the administration of the estate. The executor is in charge of gathering the decedent's assets, handling the payment of any debts or taxes owed by the estate, and distributing the remaining assets to the beneficiaries according to the terms of the Will.

The executor ensures that all legal requirements are met throughout the estate administration.

The executor has a fiduciary responsibility to ensure that the decedent’s wishes are carried out and that all estate obligations are fulfilled. The executor must ensure that all assets are distributed according to the Will's instructions and in conformance with state law.

In addition, the executor must manage all financial matters associated with the estate, such as filing estate tax returns, paying debts, and distributing assets. The executor is also responsible for overseeing the probate process and ensuring that all required paperwork is properly filed and approved.

If necessary, the executor can seek legal advice from an experienced attorney to help the executor carry out the fiduciary’s duties.

Duties of the Executor

The executor has several important duties, including:

1. Notifying Beneficiaries: The executor must ensure that all the beneficiaries listed in the will and all heirs at law are notified of the Will having been probated.  This notice must be in writing or through a personal visit.  The executor must provide the heirs and beneficiaries with a copy of the Will if requested to do so.

2. Identifying Assets: The executor must list all assets owned by the deceased, such as real estate, bank accounts, stocks, and other investments.

3. Valuing Assets: The executor is responsible for obtaining valuations for all assets to determine value for tax and distribution purposes.

4. Filing Necessary Documents: The executor must file documents such as death certificates, wills, and other legal documents with the court to initiate the probate process.

5. Paying Debts and Taxes: The executor must pay off all decedent debts, funeral and administration expenses and taxes before distributing assets to the beneficiaries.

6. Distributing Assets: Once all debts, expenses and taxes have been paid, the executor can distribute assets to the beneficiaries as outlined in the will.

The role of the executor can be complicated and time-consuming, so choose someone reliable and trustworthy.  If the executor does not fulfill his or her duties properly, the executor may be held liable for any losses or damages caused by the executor’s neglect or willful wrongdoing.

The Probate Process

When someone passes away, the probate process is a legal procedure that ensures that all of a decedent’s assets are distributed to the designated beneficiaries, after all debts, taxes and expenses have been paid.

It is overseen by an executor, who is appointed in the decedent’s will, or by an estate administrator assigned by the court if there is no will. The probate process typically involves four main steps.

  • First, the executor must “open” the estate, meaning the executor must file documents with the local court to obtain authorization to act as the representative for the estate. The nominated executor must submit the decedent’s original will and other paperwork proving the validity of the will and the authority of the nominated executor to act on the decedent’s behalf.
  • Second, the executor must identify and inventory the decedent’s assets and debts. This step can be done through tax returns, bank statements, and other records. The executor must also notify creditors and manage debt repayment out of the estate funds.
  • Third, the executor must obtain any necessary appraisals or valuations of the estate’s assets and file taxes on behalf of the decedent. It is important to ensure that the correct taxes are paid before the beneficiaries receive their inheritance.
  • Fourth, the executor must collect all estate assets and distribute them according to the decedent's wishes. This includes paying creditors, distributing personal items, and transferring real property.

The probate process can be lengthy and complicated. Working with an experienced attorney to ensure everything is done correctly will make the executor’s job easier.

How to Finalize and Close Out the Estate Administration & Distribution Processes

When the probate process is complete, the executor must close out the estate administration.

This close-out involves ensuring that all bills and taxes related to the estate have been paid, any remaining assets have been distributed, and all relevant records have been gathered and stored.

#1 – Ensure All Debts & Taxes Are Paid

The first step in closing out the estate administration is to ensure that all debts of the decedent have been paid or provided for. This debt includes any outstanding medical bills and any other debt owed by the decedent.

The executor should also ensure that funeral expenses and estate administration expenses have been paid or provided for.  All taxes due from the estate must be paid. The tax includes the decedent’s final income taxes, estate income taxes and estate and/or inheritance taxes.

#2 – Collect & Distribute All Remaining Assets

The executor should collect all assets of the estate, and after making certain that the debts, expenses and taxes have been paid or provided for, the executor can distribute the remaining assets to the rightful beneficiaries. This could include real property, investments, cash, personal items, and any other assets that belonged to the deceased.

Once the assets have been distributed, the executor should record the distribution by having each beneficiary execute a Refunding Bond and Release, which is filed with the Court.

#3 – Compile All Documents & Records Related to the Estate

Finally, the executor should compile all documents and records related to the estate. The documents include a copy of the Will, inventories of estate assets and debts, documents from the probate process, copies of receipts for debts paid, and anything else related to the estate.

The executor should also ensure that all documents are stored and available for review.

#4 – Officially Close Out the Estate

Once these steps have been completed, the executor can officially close out the estate administration.

This process involves filing a “Final Accounting”  and a “Final Distribution Report” with the beneficiaries, or with the probate court if required. After the beneficiaries or the court approve this paperwork, the estate can be legally closed out.

Properly Finalize Your New Jersey Estate Administration & Distribution Processes With Help from BMC Estate Planning

Finalizing a New Jersey estate administration can be complex and lengthy. Enlist the help of an experienced estate planning attorney to ensure it’s done the right way, the first time.

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