Closing an Estate under Independent Administration

Although it is not strictly required that an independent executor take action to close the estate, some executors may prefer that the record reflect that at least from the executor’s perspective, he or she has completed their administration and will not be taking further action.

The Probate Code offers a few options for those wishing to close the estate. Arguably the simplest and most cost effective way to accomplish this is to file a “Notice of Closing Estate” with the court as authorized by Section 151(b) of the Probate Code.

The Notice of Estate Closing is essentially an affidavit executed by the independent executor and filed with the court that asserts that independent executor has discharged his or her duties.

The Notice of Estate Closing must state (1) that all debts known to exist against the estate have been paid or have been paid to the extent the assets of the estate allowed and (2) must list each distributee to whom assets of the estate had been distributed, including the address of each distributee.

The Notice of Estate Closing must also assert that each distributee has been provided a copy of the Notice prior to filing, and must include any proofs necessary to establish such delivery. Therefore, the Notice should be executed and mailed to each distributee by a method that allows tracking (certified mail return receipt, fax, etc.), and the executor should be prepared to attach such tracking as an attachment to the Notice of Estate Closing.

Given the requirement that the Notice be fully executed and delivered to the distributees prior to filing, the Notice must anticipate that proofs of delivery will be attached when filed with the Court, and language to that effect must therefore be anticipated and included in the Notice prior to delivery to the distrbutees.

If the Independent Executor is delivering a copy of the Notice to a distributee represented by counsel, where that attorney has not actually made an appearance before the Court, it is also advisable to attach documentation with the Notice that demonstrates why the Independent Executor believes that such distributee is represented by counsel such that the delivery of the Notice by and through that counsel would be effective (for example, correspondence from that counsel asserting representation of the distrbutee).

Once the Notice has been delivered to the distributees and the proofs of such delivery have been gathered and attached, the Notice of Estate Closing may then be filed with the Court. Upon filing of the Notice of Closing of Estate with the Court, the estate will be considered “closed” after 30 days.

It is important to note that the closing of an estate by way of a Notice of Closing Estate does not relieve the Independent Executor of any potential liability in discharging his or her duties while administering the estate. However, the Notice of Estate Closing can nevertheless be a valuable tool for ensuring the record reflects the Independent Executor’s belief that no further administration is necessary. This record notice can prompt distributees to bring forward any potential claims so that they can be dealt with in a timely fashion while evidence is still fresh and while damages that might stem from any potential liability may be limited. Additionally, filing the Notice may also set up a potential equitable defense based on laches in the event a distributee asserts a claim against the Independent Executor years later after having received notice that the estate was closing. The Notice may also be helpful in establishing the maximum timeframe for when the clock should be running for purposes of calculating the statute of limitations that may run on potential liability claims arising out of the administration of the estate by the Independent Executor.