Once the Inventory, Appraisement and List of Claims (the “Inventory”) has been approved by the court, you will be ready to move forward with wrapping up the decedent’s estate. In fact, the receipt of the order approving the inventory typically concludes matters with the probate court.
Before distributing the decedent’s estate, there are a few other items you will need to take care of first. One item of particular importance is the paying of the decedent’s final income taxes, which a CPA can help you complete.
You will also need to be sure that you pay any final debts owed by the decedent. Some examples of final debts include hospital bills and funeral bills.. Depending on the language of the decedent’s will, it might also include paying off any mortgages still attached to real property owned by the decedent.
It may also be necessary to file an Estate Tax Return if the decedent’s estate is in excess of the estate tax exemption (for individuals dying in 2017, the exemption amount is $5.49 million). Unless extended, the Estate Tax Return will be due 9 months after the date of the decedent’s death.
Finally, you will want to make sure that you pay any amounts owed to the CPA, attorney, and any other advisors that have been working with you on the estate administration. If the will provides for it, you may also be entitled to compensation for your work as the independent executor. If a specific amount is not specified in the will, then you should consult with your attorney to determine the appropriate amount to take as your compensation for serving as independent executor.
You can begin making distributions from the estate at any time after being appointed independent executor. However, take special care not to distribute too much as you will want to be sure the estate has enough funds to cover any final expenses (taxes, debts, bills, etc.). Once all of the final expenses have been paid, you can make a final distribution of any remaining, undistributed assets of the estate to the beneficiaries of the estate
Distributing the estate is not usually a complicated process. It will be completed through a series of Independent Executor Distribution Deeds, assignments of property (for personal property or entity interests), and cash distributions (usually accomplished by a check from the executor, a wire transfer, or an actual cash distribution). Please keep in mind that as the executor, you are entitled to receive receipts from the beneficiaries acknowledging that they have received their allotted distribution.
Once you have paid the bills and made the distributions to the beneficiaries, the estate administration process is effectively complete. Congratulations!
In our final post in this series, we will cover special circumstances in estate administration including intestacy, filing an estate tax return, and others.