Closing the estate

Bottom line first. You close an estate by finishing the work (claims, taxes, expenses, giving out what is left) and then telling the court and everyone involved. You choose between closing informally, which is quicker, or formally, where the court approves and your responsibility ends right away. The court cannot choose for you. Closing is mostly paperwork, and there is no filing fee for either route, according to the Judicial Branch.

Before you close: the work that comes first

A personal representative (PR) is the person in charge of the estate. Closing means the estate has been "fully administered": lawful claims, expenses of administration, and estate, inheritance and other death taxes are paid or settled, except as the statement says, and what remains has gone to the people entitled to it (C.R.S. 15-12-1003(1)(a)). A distributee is a person who receives estate property.

If a claim is still unpaid, the closing statement must say whether you distributed the estate subject to possible liability with the distributees' agreement, or describe other arrangements for the debt (C.R.S. 15-12-1003(1)(a)). A claim is a bill someone says the estate owes.

Informal or formal: pick one

The Judicial Branch explains the choice this way. Informal closing takes less time and paperwork because the court does not review or approve what you did. But anyone with an interest still has one year after you file to come forward if they disagree. If you expect no problems, this may fit.

Formal closing takes more time and paperwork. The court reviews everything and gives final approval, interested people can raise disagreements before approval, and once the court approves, your responsibility ends right away, with no one-year waiting period. If you expect trouble, this may fit better. The court cannot decide for you, and a lawyer can help if you are unsure.

Closing informally

When: you can file six months after the court named you PR, or one year after the death, whichever comes first (C.R.S. 15-12-1003(1); Judicial Branch close-an-estate page). This route is not for estates in supervised administration (court-supervised) or where a court order prohibits it (C.R.S. 15-12-1003(1)).

Forms:

• JDF 965, Statement of Personal Representative Closing Administration.
• JDF 942, Interim/Final Accounting. Check the "Final Accounting" box at the top. A final accounting is a written report of money in and out of the estate.
• JDF 959, the instructions for closing informally.

Steps:

1. Fill out JDF 965 and JDF 942.
2. Mail or hand-deliver a copy of JDF 965 to everyone with an interest, the same people who got notice when the estate opened. Then complete the Certificate of Service on the form.
3. Mail or hand-deliver JDF 942 to the same people. You do not file JDF 942 with the court.
4. File JDF 965 with the clerk. There is no filing fee.

The law also requires the statement to be verified (signed as true under oath) and a copy sent to all distributees and to known creditors whose claims are neither paid nor barred, along with a full written account to the distributees whose interests are affected (C.R.S. 15-12-1003(1)(b)).

After filing: if no proceedings involving the PR are pending in the court one year after the closing statement is filed, your appointment ends (C.R.S. 15-12-1003(2)). Also, claims by heirs or creditors that you breached your duty are barred unless started within six months after the closing statement is filed. That does not cover fraud, misrepresentation or inadequate disclosure about settling the estate (C.R.S. 15-12-1005).

Closing formally

The legal name is a petition for an order of complete settlement (C.R.S. 15-12-1001). A petition is a written request to the court. Final settlement is the court order approving the final account and the distribution.

When: the PR may file at any time once the time to present claims that arose before the death has run out. Anyone else may file after one year from the original PR's appointment, and also only after that claims period (C.R.S. 15-12-1001(1); Judicial Branch page). After notice and a hearing, the court can decide who is entitled, approve settlement and distribution, and discharge the PR from further claims by interested persons (C.R.S. 15-12-1001(1)).

Forms:

• JDF 960, Petition for Final Settlement.
• JDF 942, Interim/Final Accounting (with the "Final Accounting" box checked), plus JDF 717 Certificate of Service attached.
• JDF 964, Order for Final Settlement, and JDF 730, Decree of Final Discharge. Fill out only the top caption; the court does the rest.
• JDF 711, Notice of Hearing, or JDF 963, Notice of Non-Appearance Hearing on Petition for Final Settlement.
• JDF 731, Receipt and Release.
• JDF 957, the instructions for closing formally.

Steps:

1. Mail or hand-deliver JDF 960 and JDF 942 to everyone with an interest.
2. File JDF 960, JDF 942 (with JDF 717), JDF 964 and JDF 730 with the clerk. No filing fee.
3. Ask the court whether you need a hearing or a non-appearance hearing, and get a date. A non-appearance hearing is not a real hearing; it is a reminder date on the court's calendar and no one has to come.
4. Mail or hand-deliver the notice (JDF 711 or JDF 963) at least 14 days before the hearing date, then file it with the certificate of service.
5. After the hearing, if the court approves, it signs JDF 964. Then you give out the money and property as you told the court.
6. Have each person who received something sign JDF 731, Receipt and Release. File all of them with the court.
7. The court signs JDF 730, and your responsibility ends.

Distributions and later claims

After assets are distributed, an unpaid claim that is not barred can be pursued against one or more distributees. No distributee owes more than the value of what they received, and amounts received as exempt property or family allowances are not counted (C.R.S. 15-12-1004). This is one reason to keep careful records and to close the right way.

Example with real numbers

Made-up numbers. Priya is the PR. The court named her on March 10, and the decedent died on January 5 of the same year. Priya and her brother Jordan are the only heirs, half each.

1. Earliest informal filing date: six months after March 10 is September 10. One year after the death is January 5 of the next year. The earlier date is September 10 (C.R.S. 15-12-1003(1)).
2. The house sells for $380,000.
3. Mortgage payoff: $70,000. Remaining: $310,000.
4. Selling costs: $22,800. Remaining: $287,200.
5. Court costs, publication and other estate expenses: $3,200. Remaining: $284,000.
6. Valid creditor claims paid: $6,000. Remaining: $278,000.
7. Each heir receives $278,000 / 2 = $139,000.

Priya shows these figures on JDF 942, mails it with JDF 965 to Jordan and anyone else with an interest, and files JDF 965 on or after September 10. If nothing is pending a year after she files, her appointment ends (C.R.S. 15-12-1003(2)). If she had chosen the formal route, the hearing notice would need to be mailed at least 14 days beforehand, and her duty would end after the receipts and release are filed and the court signs the decree.

A kind last word

Closing can feel like the last goodbye. Keep copies of everything you file, and give yourself a few weeks if you need them. This is general education, not legal or tax advice.