Once a Pennsylvania estate has been administered, it is time for the personal representative to close the estate.
A Pennsylvania estate is ready to close once all of the assets have been marshalled, after the inventory has been approved, after appraisement of the inheritance tax return, and after satisfaction or resolution of the outstanding claims and liabilities of the estate.
A Pennsylvania personal representative can close the estate formally or informally.
Close a Pennsylvania Estate Informally – Release Agreement
Most Pennsylvania estates are closed informally, by release agreement. A release agreement or waiver allows the beneficiaries of the Pennsylvania estate to approve of the administration of the estate and consent to the final distribution of the estate assets.
A release agreement will generally release the personal representative from his or her actions taken during the administration of the estate, contain an agreement that the beneficiaries will reimburse the personal representative for any at-risk provisions made during the first year of administration.
When a release agreement is used to informally close the estate, a formal accounting is not done, although an informal accounting is often provided with the release to show generally the payment of expenses of the Pennsylvania estate.
Close a Pennsylvania Estate Formally – Accounting and Audit
Sometimes a release cannot be obtained from all of the beneficiaries, and the personal representative must use the formal method to close the estate, which involves filing an account of the administration and having the account approved by the Pennsylvania court.
When the formal accounting and audit process is used, the personal representative must prepare and file a formal accounting of the administration of the estate and petition for adjudication and approval of the proposed distributions. 20 Pa C.S. § 3513.
The personal representative gives notice to anyone interested in the administration of the estate and who the personal representative needs to have bound by the final adjudication of the accounting and distribution, including the beneficiaries and any creditors of the Pennsylvania estate with outstanding claims. 20 Pa C.S. § 3503.
Any interested party is permitted to file objections to the accounting and proposed distribution. Objections must be filed prior to the audit or objection date. 20 Pa C.S. § 3513.
Some counties in Pennsylvania hold audits of a personal representative’s accounting, and some do not. In counties that hold audits, any claims not reported by the personal representative as an admitted claim must be presented at the audit. 20 Pa C.S. § 3386. The court will adjudicate the claims and objections and the final order will be entered. If an audit is not held then the personal representative’s account is reviewed and ultimately confirmed by the court before a distribution decree is entered. Find the local court rules in your Pennsylvania county.