In accordance with the law, an estate is responsible for paying the following with the assets from an estate:
- Expenses for the decedent’s funeral;
- Administration expenses, which includes legal fees, probate fees, and appraisals among others;
- Money owed to the government such as estate and income taxes; and
- Real property taxes that were accrued prior to the decedent’s death.
In addition, the following outstanding debts must also be paid off:
- The Department of Social Services (DSS) for Medicaid;
- Secured creditors, which includes a home equity loan, mortgage, or car loans; and
- Unsecured creditors, which includes credit cards.
Once all of the expenses, debts, and taxes are paid from the estate assets, the executor or administrator may close the estate. However, an accounting report must be presented to the estate beneficiaries as part of the estate closure process. This report is prepared in order to inform beneficiaries of why he or she is receiving a particular amount of money. The report will include receipts and a list of expenses and transactions. If any of the beneficiaries have questions about any expenses or anything within the report, the executor or administrator will promptly address any concerns that the beneficiaries may have by providing proof and an explanation.
In most instances, the beneficiaries approve the accounting report prepared by an executor or administrator. Once the report is finalized and approved, the assets are then distributed to the named beneficiaries in accordance with the decedent’s Last Will and Testament or laws of intestacy. Following the distribution of the remaining assets, the estate may then be closed. However, it is important to remember that all necessary documents pertaining to estate closure must be kept for at least six years. For this reason, it is important to speak with an experienced Wills, Trust, and Estate attorney to guide you through the process and ensure that it is completed correctly.
The attorneys at the Law Offices of Hunziker, Jones, and Sweeney are experienced New Jersey elder law, estate planning, and probate attorneys. The firm helps individuals and their families handle all aspects of elder law and wills, trust, and estate, including estate closure, estate accounting, the execution of advanced directives, updating directives to reflect life and estate planning changes, execution of a Will, end-of-life planning, asset preservation, Medicaid planning, estate administration, and probate, among others. Our New Jersey estate lawyers are trusted by their clients to handle each legal matter with diligence and compassion. For more information, contact our New Jersey estate law firm at (973) 256-0456.
