Final Distribution of Estate Assets

The final distribution of estate assets is the last step in an estate proceeding. This usually occurs after the executor or administrator pays all debts, taxes, expenses, and other estate obligations. Final distribution to the beneficiaries or heirs also comes after the executor or administrator submits an accounting, and all objections have been settled.

Before the final distribution of estate assets to the heirs or beneficiaries, the executor or administrator must first go through the probate process after being appointed:

1. Inventory and appraisal

One of the first steps in the estate proceeding is to make an inventory of the estate assets and to have the estate appraised. This will determine the value of the estate at the time of decedent’s death and whether there is a need to pay estate tax and will provide the tax basis for transfer of estate assets to the heirs or beneficiaries. The executor or administrator, or in the alternative, the beneficiaries or heirs, can also determine whether there are missing items in the inventory and whether there is a need to institute discovery and turnover proceedings.

2. Payment of debts and taxes

Before assets can be distributed to the heirs or beneficiaries, the executor or administrator must first pay all taxes, estate debts, and other estate expenses. This will determine whether there is enough estate assets left to be distributed to the beneficiaries. In New York, creditors have seven (7) months from the time the executor or administrator is appointed to file their claim with court. After this seven-month period, the executor or administrator will not be liable for any distribution made in good faith to the beneficiary or heir. For this reason, most, if not all, distributions are made after this seven-month period.

3. Accounting

Once debts and taxes are paid, the executor or administrator gives a copy of an informal accounting to the beneficiaries or heirs. If the heirs or beneficiaries agree to the accounting, they will sign their agreement to the accounting and a waiver and quitclaim that would allow them to receive their final distribution.

If they do not agree, the beneficiaries or heirs will request the executor to file a formal accounting with the court, either voluntarily or by petition. During this accounting proceeding, the beneficiaries or heirs can make their formal objections to the accounting with the court.

When the court determines that the estate incurred unnecessary expenses or damage due to executor or administrator misconduct, the beneficiaries or heirs can file a petition to have the personal representative surcharged for the damage. This surcharge petition makes the executor or administrator personally liable for damage to the estate as a result of his actions.

4. Final distribution of estate assets

Once accounting issues have been resolved, the executor or administrator can finally distribute the remaining estate assets to the beneficiaries or heirs. The timing can vary significantly, depending on the value of the estate, the complexity of estate assets, whether there is will or accounting contest, and any legal or financial complexities that may arise. It is always advisable for an executor or administrator to have an estate attorney advise him regarding the steps he has to take to ensure that the personal representative will not be made personally liable for any expense, disbursement or distribution.

Should you need any assistance in estate handling, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York City, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].