In Pennsylvania, estates are properly closed out by one of three methods. If all the relevant parties agree, a family settlement agreement can be prepared. For small estates a petition can be filed with the county Orphan's Court. For larger estates there are several tasks. First an accounting is filed along with a request for an audit date. Any objections to the accounting must be resolved. If there are no outstanding objections a request for adjudication is filed. When the judge approves the request for adjudication distribution, payments are made. The estate can then be closed.
Methods of Closing a Probated Estate
Prepare a family settlement agreement. If all the heirs and all the administrators of the estate agree, a contract can be prepared detailing all the distributions and all the payments. All creditors must be paid. All tax returns must be filed. If any sums are due, then all tax payments must be made. The family settlement agreement binds all the people who sign it.
A family settlement agreement is the easiest way to close an estate since it does not involve any judicial proceedings.
File a petition for settlement of a small estate. The Probate, Estates and Fiduciaries Code (Section 3102) allows any interested party the right to file a petition with the local Orphan's Court requesting that the estate be settled. The decedent must have been domiciled in Pennsylvania. The value of the estate must be $25,000 or less.
After the petition is filed the Orphan's Court judge will set forth any requirements such as any requirements for notice, any hearing dates and any need to have the property appraised.
After the judge's order, any other interested parties have up to one year to request that the judge's order be revoked.
File an accounting with the local Orphan's Court. Any authorized person (executor or administrator) should file an accounting. The accounting is a legal breakdown of the assets (real property, bank accounts, personal property, etc.) and the bills. Bills are normally listed by priority. Administrative fees, court costs and funeral bills have higher priority than most outstanding bills. The accounting is accompanied by a request for an audit date.
On the audit date, if any objections to the account have been properly filed, the Orphan's Court judge sets a date to hear the objections. If there are no objections then the administrator or executor is given permission to file a petition for adjudication.
The petition for adjudication requests the right to make all the distributions and to pay all the remaining bills. Once the judge approves the petition for adjudication, distributions and payments can be made.
Vendors now provide estate software. This software allows the user to complete the necessary forms, fill out the tax returns and prepare the proper accounts.
Executors are named in the decedent's will. Administrators are appointed by application.
A "probated" estate normally refers to an estate where there's a will.
Estate practice involves a lot of deadlines and a lot of strategy. It is best to consult with an estate lawyer to make sure all the legal issues are properly addressed.
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