When it comes time to close an estate, the executor must file an annual account. The judge should examine the account within ten days to ensure that everything checks out.
Some executors do not realize that in some cases, account rejections can garner contempt of court charges. There are several reasons why a court might reject a filing. Looking at potential issues can help the executor get the account through without trouble.
Mistakes
Judges often reject accounts when the executor does not calculate or handle the assets properly. The executor should ensure that all disbursements, receipts and distributions add up. It is important to check for creditor claims before an heir cashes out a check or takes personal property. Also, in the event that the executor fails to file the account, he or she may need to give a reason for the failure with proof. Avoiding mistakes can mitigate problems down the line.
Insolvency
When reviewing the annual account, the executor should balance the decedent’s debts with the estate’s capital. A court will deem the estate insolvent if the assets fall behind the creditor’s claims. If needed, the executor should attempt to sell some of the property before filing. Rejection is less likely if the executor can pay off the debts pro-rata.
An executor should not take account filing lightly. Staying on top of every detail can be burdensome, but it is well worth it in the end. The executor can enjoy peace of mind when the estate’s assets get to where they belong.