Probate Part 3 of 4

Probate Process: To manage and close the estate

Before an estate in probate can be managed, an executor or estate administrator has to be established by the probate court. This individual can be a person named in the deceased party’s will, a person in someway connect to the deceased that was chosen by the court or applied to the court for the position, or a professional hired by the family. The executor or administrator must have letters of testamentary from the court to manage the estate (for more information visit our previous blog).

To manage the estate, the executor will need to pay all the debts and taxes on the estate. To do so they must get an employer identification number for the estate from the IRS and open an estate bank account. In some instances, the executor is required to notify the state health or welfare department of the death. The executor then makes an inventory of the estate assets and gets an appraisal. Creditors should be notified of the estate and debts paid. Accounting of debts paid and denied should be kept in case the courts require them. Most probate processes take four to six months to close to allow adequate time for creditors to come forward and make claims against the estate. Next, the executor prepares and files income tax returns and files estate tax returns with the federal and state governments as required by law. Lastly, they distribute the estate to beneficiaries and heirs as directed by the will or state law. Careful accounting of where assets were distributed should be maintained and receipts received as available.

Distribution of estate items can be done early as long as the executor is sure there is enough money available to pay the taxes and debts. There are various reasons for early distribution including devaluing of items left sitting and distribution of sentimental or low value items. Properties that are continuing to be profitable may need special attention as well as property that needs to be sold. This can be done with the help of a Certified Probate Real Estate Specialist. Once the estate is managed, it can be closed.

Closing the estate is the simple matter of filing more court paperwork. Notices should be sent by the executor to the beneficiaries and heirs of the final court hearing for the estate. Then the executor can present a request to the court to close the estate. Most often, the record of accounting during the executor’s management of the estate is required by the probate court. Any early distributions should be justified in the accountings. The accountings should also list any debts and taxes paid. Once the estate is closed, the executor is released from their role.

Need more specific details on probate in Texas? Check our next blog for info.