Closing the Estate

Most estates that are subject to an Independent administration are never closed. Although there are Texas Estates Code provisions for the filing of a final account with the Court and the issuance of citation to the beneficiaries and the known creditors of the estate, the cost to complete such a closing is seldom worth it. Furthermore, if an unknown asset suddenly surfaces and the executor has closed the estate, the executor would be in the unenviable position of re-opening the closed estate and completing the process again. If the estate is left open, however, the executor can simply send in his or her Letters Testamentary to claim the assets, and distribute them according to the Will without the need to re-engage an attorney.

If you really want to close the administration of the Estate, there are three ways to do it. Two are informative only, while the last results in an judgment that resolves the executor or administrator of liability.

Closing Report pursuant to Section 405.005. In this type of closing, The executor or administrator files a closing report, verified by affidavit, that:

1. Shows: (A) the Property of the Estate coming to the executor/administrator; (B) the debts that have been paid; (C) the unpaid debts; (D) the property remaining on hand after the payment of debts; (E) the names of the distributees of the Estate; and
2. Includes signed receipts or other proof of delivery of property to the distributees.

EFFECT: The independent administration of the estate is considered closed 30 days after the filing of the closing report unless an interested person (heir or creditor) files an objection. The power and authority of the executor or administrator is terminated. If another asset surfaces, you will have to file another application to open the Estate.

RELEASE?: No, the executor or administrator still bears liability for any mismanagement of the estate or for any false statements contained in the report.

Notice of Closing pursuant to Section 405.006. In this type of closing, The executor or administrator files a notice of closing of estate, verified by affidavit, that states:

1. that all debts known to exist against the estate have been paid or have been paid to the extent permitted by the assets in the independent executor's possession;
2. that all remaining assets of the estate, if any, have been distributed;
3. the names and addresses of the distributees to whom the property of the estate, if any, remaining on hand after payment of debts has been distributed.

Before filing the notice, the independent executor or administrator shall provide to each distributee of the estate a copy of the notice of closing estate. The notice of closing estate filed by the independent executor or administrator must include signed receipts or other proof that all distributees have received a copy of the notice of closing of the estate.

EFFECT: The independent administration of the estate is considered closed 30 days after the filing of the notice of closing unless an interested person (heir or creditor) files an objection. The power and authority of the executor or administrator is terminated. If another asset surfaces, you will have to file another application to open the Estate.

RELEASE?: No, the executor or administrator still bears liability for any mismanagement of the estate or for any false statements contained in the notice.

Judicial Discharge pursuant to Section 405.003. In this type of closing, The executor or administrator files a new lawsuit, serves all of the interested parties with citation, and there is an evidentiary trial where the executor or administrator must prove that he or she has fully administered the Estate pursuant to the terms of the Court's orders, the provisions of the Texas Estates Code, and the terms of the Will, if there be one. As you might expect, this is a very expensive process.

EFFECT: The independent administration of the estate is considered closed 30 days after the entry of a declaratory judgment issued by the Court at the conclusion of the trial. The power and authority of the executor or administrator is terminated. If another asset surfaces, you will have to file another application to open the Estate.

RELEASE?: Yes, the executor or administrator will not be subject to any liability for any mismanagement of the estate.