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Closing the Estate: Discharge of Executor

After property is properly distributed, court discharges executor.

After all of the estate's property has been distributed and all fees paid, the probate court will formally discharge the executor. The probate court will issue a formal "order of discharge" (the title may vary in some states). Typically, this is a standard form that must be presented to the court for the judge's signature. The order of discharge is an important legal document. The executor should keep it in a safe place with other important papers.

THE EXECUTOR'S FEE

The executor is entitled to a fee for his services. Fees are a matter of state law and vary state by state. In some states, the fee is based on a percentage of the estate's value. In other states, the fee is simply a "reasonable" fee.

REOPENING THE ESTATE

In rare cases, an estate may be "reopened" even after there is a final distribution and the executor has been discharged. This might happen if there are newly discovered assets, or a will is found after it was thought that there was no will.

Newly Discovered Assets

If assets of the deceased are discovered after the estate is closed, the executor needs to petition the probate court to reopen the estate to administer the assets. In most states this procedure will not be a full-blown probate. As a rule, creditors will have no claim on the newly discovered assets - the assets merely need to be distributed according to the terms of the will. If the assets are substantial and complicated, the executor should consult an attorney before proceeding with the distribution.

Newly Discovered Will

A newly discovered will only causes problems if the deceased was believed to have died intestate - without a will. If a will is admitted to probate and the estate has been settled and distributed, the new will does not change the result. In all states there is a brief time period at the commencement of probate where other wills can be produced - generally just a few months. Once this time period has elapsed it is simply too late to revisit the validity of the will used to probate the estate.

This result may seem unjust. If there is a later will it probably reflects the deceased's wishes at the end of his life, especially if it expressly revokes the will used to probate the estate. However, the law is also intended to establish certainty for both creditors and beneficiaries.

If the deceased was treated as having died intestate, there is a longer time period in which a newly discovered will can be produced. However, there is a time limit - normally one year, although this varies state by state. If the newly discovered will is valid, the probate will recommence and the executor named will probably be confirmed by the court and will settle the estate.

If the estate's assets have already been distributed under the intestacy statute and the estate closed, there will obviously be problems if the provisions in the new will are contrary to the actual distribution. For example, if a person died intestate, their property would have been distributed to their next of kin. What if the newly discovered will leaves most of the property to friends and charities rather than to close relatives? The relatives who received the property will have to return the property to the estate. If they received money and spent it, they become unexpected debtors. This is obviously a problem for an experienced probate lawyer to handle. Luckily, it is rare that a newly discovered will is found - and even more uncommon for such a will to provide in great contradiction with the state's intestacy laws.

RECORD KEEPING

The executor should retain copies of all paperwork for at least five years. Questions about how the estate was handled may arise from time to time. For example, beneficiaries may need to know the value of property they received when they sell it and have to report the income on their tax returns.

The best policy is to keep the records forever. If the executor ever needs to probate another estate, the paperwork will come in handy.

 


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