From Our “Ask a Question” Mailbag: “My father recently died, and I am named the executor in his will. I know I need to sell the house and pay taxes. But when is the finish line? What happens after probate is closed?”
Probate Lawyer Kelly Barse.
What Happens After Probate is Closed?
Mystery movies speak of estates being closed. The term conjures up images of files being shelved in some forgotten, dusty room. But, just like the myth of the Reading of the Will (doesn’t happen outside of movies) estates don’t close.
Once appointed executor, you represent the estate for the rest of your life. Well, your responsibility follows you to the grave as I will explain later.
What Is Probate?
In short, Probate is the process of distributing the deceased’s assets to the correct people. The right people could be the IRS if the deceased died owing to the IRS back taxes. But usually, this means paying any outstanding creditor then distributing the remaining assets among the heirs as the Will directs. Once appointed, the Executor has the power to oversee this process. The Executor gathers the assets, pays the creditors, then makes distributions.
“Closing the Estate” refers to when the Executor believes all tasks are complete. But the executor’s powers and responsibilities continue forever. For example, if 20 years later, the Executor finds an overlooked account he still has the ability to collect the funds. Furthermore, if the executor makes an error during his service, such as selling the house for too little money, the liability continues forever. If the Executor fails to obtain a liability release from the heirs or court, then his responsibility goes on. An heir can file for a Formal Accounting years later asking the judge to surcharge the Executor for the error he made in selling the house.
Heirs can even bring claims against the Executor’s estate. For example, if an Executor sold the estate’s house for $40,000.00 below value to his friend, then dies. The heirs have the right to petition the judge to recognize the Executor’s responsibility, and then to demand payment from the Executor’s estate as if they were a creditor.
So, the executor’s responsibility extends to the grave.
Release of Liability or a Formal Accounting.
Because of the executor’s power and responsibility extending forever, it is logical to seek some endpoint. To protect our Executors, we advise our Executor clients to distribute funds only after receiving a complete release of all actions they have taken as Executor. The heirs releasing the Executor bars them from making later surcharge claims.
If the heirs refuse to give a release, we then advise our clients to file a Formal Accounting. The Executor submits the Accounting to the court. Accountings follow specific formate and explain all actions taken by the Executor. The heirs receive a notice and are free to object, but if they do not object, then the judge releases the executor from liability. If the heirs do file objections, then the judge hears them. Should the judge determine that the Executor damaged the estate, the judge surcharges the Executor for the damage. If the judge finds that there has been no damage, she releases the Executor from liability. Either way, the Executor can now go on with life, knowing the estate is behind them.
But, the Executor still has powers. If the Executor years later discovers a bank account, the Executor can collect and distribute the funds.
For more detailed information about What happens after probate is closed, see my article “Why do Estates Never Close.”
This information is important if you are an Executor. It is equally important to beneficiaries. As the Executor, you want to know your exit strategy. As an heir, you want to know how to know what the Executor has done and if the inheritance you are receiving should be larger.
In Conclusion: What Happens After Probate is Closed?
I hope this short article was helpful. I addressed the question What Happens After Probate is Closed. The article also provides links for more detailed information. If you are an Executor seeking advice or an heir who belives as Executor has caused the estate harm, contact us. Let our Probate Lawyers help walk you through what can be a confusing process. In fact, feel free to contact our office for a free consultation.
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