Estate administration

Estate administration covers the work that follows a death, from the executor's authority to the final division of assets. The topic includes inventories, creditor claims, estate tax filings, income tax during administration and liquidity.

What the topic covers

The guides explain how executor authority and responsibilities work, how estate inventories and asset values are set, and how creditor claims are paid in priority order. They cover estate tax filings and related reporting, income taxes during administration, how estates raise cash through borrowing and installments, and how assets are divided among beneficiaries. The pages follow the order in which these tasks usually arise.

Questions owners ask

Typical questions ask how an executor is paid, whether an IRS account record can substitute for an estate tax closing letter, and whether a filing extension also extends the payment deadline.

How the pieces connect

Administration links the documents to the tax system. The executor gathers and values assets, which feeds the inventory and the estate tax return. Creditor claims and taxes are paid before beneficiaries receive property, so liquidity decides whether assets must be sold or borrowed against. The checklist for this topic gathers the records behind each step.

Who meets this topic

Owners of businesses, real estate and private investments meet estate administration when an interest that is hard to value or sell must be handled. Spouses and adult children meet it as executors, trustees and beneficiaries.

Start here

• How estate creditor claims and payment priorities workUnderstand estate creditor notices, claim deadlines and payment priorities through state examples, with guidance on liens, disputed claims and payment reserves.
• How estate accountings, court oversight and closing workUnderstand estate accountings, beneficiary objections and closing procedures, with state examples to help you prepare questions about records and final steps.
• How estate inventories and asset values workLearn how estate inventories record assets and values, with state examples covering deadlines, appraisals, corrections and federal valuation documentation.

• Guides 6
• Questions answered 8
• Checklist 1
• Terms 6

Guides

• How estate accountings, court oversight and closing work

  Understand estate accountings, beneficiary objections and closing procedures, with state examples to help you prepare questions about records and final steps.

• How estate assets are divided among beneficiaries

  Learn how estate assets are divided, how gifts may be reduced, and what Minnesota, Georgia and South Carolina rules say about property transfers and values.

• How estate creditor claims and payment priorities work

  Understand estate creditor notices, claim deadlines and payment priorities through state examples, with guidance on liens, disputed claims and payment reserves.

• How estate inventories and asset values work

  Learn how estate inventories record assets and values, with state examples covering deadlines, appraisals, corrections and federal valuation documentation.

• How executor authority and responsibilities work

  In New York, a person named executor in a will has no authority to act until the Surrogate's Court admits the will to probate and issues letters testamentary.

• How income taxes work during estate administration

  Understand final returns, estate income taxes, distributions, sales, expenses and beneficiary reporting, with filing questions and IRS resources for executors.

Questions answered

• Can an executor be personally liable for distributing assets too early?

  The exposure depends on what remains unpaid and what property was distributed. An early transfer of property can leave a shortfall if the asset loses value.

• Can an IRS account record substitute for an estate tax closing letter?

  A closing letter request goes through Pay.gov and carries a fee. The IRS describes a wait of at least 9 months after filing Form 706 before the request is made.

• Can creditors reach revocable trust assets after the owner dies?

  Utah's published creditor notice for a revocable trust must tell creditors to present claims within three months after first publication or be forever barred.

• Does an estate tax filing extension also extend the payment deadline?

  These deadlines apply to estates that hold business, real estate, or private investment interests. A filing extension extends the time to file the return.

• How does alternate valuation work for assets sold within six months of death?

  Property still held is valued six months after death. The IRS allows the election only when it decreases both the specified property value and net tax due.

• How is an executor paid?

  Some states fix commissions by percentage. Georgia administrator commissions are normally two and one-half percent of money received and of money paid out.

• What does a section 645 election do for a revocable trust after death?

  Practitioners say the election must be made by the due date, including extensions, for the first taxable year's Form 1041, even if no return is required.

• What records are needed to prepare a federal estate tax return?

  The IRS says the death certificate must accompany Form 706. For a U.S. citizen or resident decedent who died testate, a certified copy of the will is required.

Checklist

• Estate administration records and questions checklist

  New York practitioners describe beneficiary-designated, survivorship, and trust assets as typically passing outside the will and executor's administration.

Terms

• Estate accounting

  Delaware law requires executors and administrators to account to the Court of Chancery every year until the estate closes and a final account is passed.

• In-kind distribution

  For owners of businesses, real estate and private investments, the term can describe how estate assets are allocated among people entitled to receive them.

• Personal representative

  Maryland probate includes managing estate property, handling expenses and claims, and distributing property to heirs. The will can name a representative.

• Probate inventory

  The inventory gives the personal representative a baseline for estate property. Maine inventories include date-of-death fair market values and encumbrances.

• Residuary bequest

  A residuary bequest is a gift of the portion of an estate that remains after expenses, creditor payments and specific bequests or devises are covered.

• Section 6166 election

  The executor makes the election for the tax attributable to that interest. The executor attaches a notice of election to a timely filed estate tax return.

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