Question: I am the Executor of my father’s estate. I have collected the assets and paid the expenses and am ready to close the estate. How should I proceed?

Answer: Once you have collected the assets of the estate, paid the expenses, debts and taxes you are ready to close the estate. In order to close the estate you should prepare what is known as an accounting. This accounting shows the beneficiaries what you collected, what you paid and what is left to be distributed. The accounting should be detailed and show all transactions in and out of the estate account.

In the accounting you will also compute the commissions you are entitled to for service as executor. In New York the commissions are calculated as follows: 5% of the first $100,000, 4% of the next $200,000, 3% of the next $700,000, 2.5% of the next $4,000,000 and 2% of all sums over $5,000,000. The executor is entitled to commissions only on the assets in the probate estate.

As executor you can take the entire commission, you can waive the commission or take some amount in between. This commission is income taxable, so you should consult your tax advisor before making a decision. You cannot pay yourself the commission until your accounting has been approved by all the beneficiaries.

To have the beneficiaries approve your actions as executor you would present them with the accounting and a release. This release would essentially say that the beneficiary has reviewed your accounting, accepts it as a final accounting, approves your commissions and that beneficiary releases you from liability as executor. This release should be signed and notarized by all beneficiaries of the estate and returned to you before any checks are issued to the beneficiaries or you pay your commissions.

After you make the final distributions you must keep the records of the estate for six years. This is because an executor has liability for their actions for six years from the date they cease acting as executor. The six year statute of limitations starts to run on the date of your last act as executor, not from the date of your appointment as executor by the court.

The closure of an estate is an act which should be done with the formality of an accounting and release provided by the executor to the beneficiaries. Family dynamics can change and disagreements and can arise after estate funds are distributed. It. best to have these documents prepared by an attorney experienced in estate administration matters. If these formalities are not followed, the executor does not have adequate protection in the event a dispute arises with a beneficiary in the six years that follows the distribution of an estate.