Each state has different laws surrounding wills and probate, so you need to check Texas law to ensure you do everything you need to do as an executor. Before you finalize the estate, you need to handle all tax and debt issues.
Estate and income tax returns
Based on Texas law, if an estate’s value estate exceeds $11.4 million, you need to submit an estate tax return before you can finalize the estate. In the state of Texas, you also need to file an inheritance tax return if the estate is large enough.
You must also file a federal income tax return on the decedent’s behalf. The IRS usually requires federal income tax returns by April 15 of the year after the decedent’s death. There are other fees that you may or may not have to pay, so you should consult with a lawyer to ensure you have correctly handled all the necessary expenses and tasks. Consulting with an attorney will make the process proceed more quickly as well since you’re not left researching all the information on your own.
Pay off debts
As the executor, you’re responsible for using the estate’s assets to pay off all the decedent’s outstanding debts. You must wait several months for creditors to come forward and claim their piece of the estate before you distribute the estate among heirs. When there isn’t enough cash, the executor needs to liquidate any assets from the estate to pay off the debt. Vehicles and real estate count as assets you could liquidate.
File a Notice of Closing Estate
After you pay all applicable taxes, file the decedent’s tax returns, pay off his or her debts and complete other required tasks, you need to file a Notice of Closing Estate to finalize the estate in Texas. Double-check that you handled all the required tasks before submitting the Notice of Closing Estate to your county court. The notice needs to include:
- Confirmation that each beneficiary received a copy of the notice
- Proof that you sent each beneficiary a copy of the notice
- Confirmation that you paid off the debts as much as possible with the estate
A lot goes into finalizing an estate. Make sure that you sufficiently pay off debts, file taxes and submit the Notice of Closing Estate. An attorney who is familiar with wills and probate can make this process less demanding on you.