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Why Executors Should Properly Close Out an Estate

Properly closing out an estate demands more than just making sure all beneficiaries receive their shares according to the expressed desires of the deceased. If you are the Executor or administrator of a will in New Jersey, you should become aware of all responsibilities involved in closing out the estate.

The process is not always as simple as it may appear. In every instance, unanticipated details pop up, so employing an experienced estate lawyer will help you navigate the process to ensure the closing process goes smoothly.

Role of the Executor

closing out an estate

The responsibilities of an Executor include:

  • Identifying, locating, and gathering all assets
  • Paying all the decedent’s taxes and debts
  • Creating an accounting of the assets and liabilities of the estate
  • Distribute remaining assets to beneficiaries as directed by the will
  • Satisfactorily closing the estate

All affairs of the will should be handled as efficiently and expeditiously as possible.

Finally, the Executor must advise the beneficiaries when the estate will be closing and when their responsibilities as administrator will be officially ended.

Before Closing the Estate

Before the estate can close, the Executor needs to receive confirmation or official waivers from both the IRS and the State of New Jersey that all taxes have been satisfied.

Before making distributions to the beneficiaries, the Executor should require all recipients properly a signed and notarized refunding bond and release. 

The bond portion, once submitted by each beneficiary, recognizes their responsibility to return any part of the assets that they may have received to pay any additional debt of the estate that may arise. This agreement protects the Executor should claims against the estate be made later.

The release document legally absolves the Executor of future claims that could be by the beneficiaries. This part establishes that each beneficiary recognizes that:

  • They have received all assets to which the will entitles them.
  • The Executor is absolved of any liabilities regarding the administration of the estate.
  • The Executor is discharged from all future duties of the estate.

The Refunding and Release Agreement also waives the beneficiary’s right to a formal accounting.

Once the Executor receives all signed and notarized Refunding Bond and Release documents, these must be filed with the Surrogate in the county where the will was probated.

Accounting for Assets

In most instances, an informal accounting will suffice as the representation of an estate’s net value. This accounting is simply a list of assets, gains, and losses after sales, debts, taxes, and distributions. As long as the  residuary beneficiaries agree with the accounting then the estate can be concluded without any involvement of the court.

Some estates are complicated and require a formal accounting before the estate can be closed out. Formal accountings are expensive and time-consuming, requiring detailed and complete disclosure of assets. These accountings often originate from disgruntled beneficiaries and will prolong the process.

If the Executor does not receive the refunding bond and release documents from each beneficiary, a formal accounting may be warranted. In these cases, the Executor may file an Order to Show Cause and Verified Complaint along with the formal accounting to be released from further duties and responsibilities through a Court Order of Discharge.

Work with an Experienced Estate Law Firm

In New Jersey, the experienced Estate Law Firm of Nicholas A. Giuditta III will help navigate the complexities of executorship. This critical responsibility involves far more than dividing the assets, and the individual should be aware of all requirements to manage and close an estate successfully.

Contact the Law Office of Nicholas Giuditta, an experienced Westfield, New Jersey Estate Attorney, to discuss the process of administering an estate.

To discuss your executor responsibilities, phone at 908-232-0099.