What If Assets Are Discovered After Probate Closes?

Though dramatic stories abound, the reality is that most families manage to smoothly close out the affairs of deceased loved ones following state probate protocols. Simply put, probate provides a structured way for debts to be validated and paid off, so that remaining assets can be fairly distributed, either in accordance with a will, or through state laws of intestacy. Nonetheless, just as our lives can be quirky, so too can our affairs upon death. For example, what if probate has been completed, and then new assets, like a bank account no one knew about, are discovered? It happens. Read on for legal insights on the reopening of a probate case.

Probate In A Nutshell

Ordinarily following a death, families find that grief is accompanied by the busyness of bringing order to the financial affairs of the deceased. Despite its reputation, the public process of probate can turn out to be helpful, as it gives families a structured, step by step process to work through debts and distribute assets. Usually, the bulk of these tasks fall to the executor named in a will, or, absent that, the administrator appointed in probate court. Some states use the umbrella term, personal representative, when referring to the individual responsible for the affairs of the deceased.

Whether wearing the “nametag” executor, personal representative, or administrator, the responsible individual is considered a fiduciary, who is legally obligated to put the estate and its beneficiaries ahead of self-interest, while following state laws and probate protocols to perform the duties necessary to close the estate of the deceased, such as:

• Informing third parties, such as banks and other account holders, of the person’s death
• Locating assets and identifying debts
• Providing the court with an inventory of these assets and debts
• Maintaining any assets until they are disposed of
• Disposing of assets either through distribution or sale
• Satisfying any debts
• Appearing in court on behalf of the estate

Ideally, proactive estate planning has paved the way for smooth closure, but in the event help is needed, probate attorneys can relieve families of some of the stress and responsibilities involved in bringing the probate process to an end. 

Reopening A Closed Estate?

Usually, the probate process results in the identification and fair distribution of all assets of the deceased, after debts, including taxes are paid. But what if more assets are identified after an estate has been officially closed? As the Probate Law Center explains, some cases do warrant the reopening of an estate, allowing “unfinished business to be handled properly—so that everything is accounted for, and nothing is left unresolved.” According to the Probate Law Center, examples of why a court may approve the reopening of an estate include:  

• A bank account that was overlooked
• Real estate discovered after closing
• Unclaimed property
• Refunds, settlements, or unexpected payments
• Newly discovered debts or claims

When a court does approve the reopening of a probate case, “the scope is usually limited to the newly discovered matter,” so that the designated fiduciary can: 

• Collect the newly discovered asset
• Address any related issues
• Distribute the asset according to the will or state law

Complications with revisiting a closed estate can arise, especially if real estate titles are involved, assets need to be recovered and redistributed among beneficiaries, or claims of errors or fraud require additional court involvement. Ideally, the probate court will work toward fair and practical solutions, so the time consuming and costly process of probate litigation can be avoided.

Probate Bonds Explained

Executors, administrators and personal representatives are fiduciaries, and therefore legally obliged to protect the interests of the estate and its beneficiaries in accordance with state law. As a financial guarantee that appointed individuals will faithfully perform their duties, courts often require a bond, known as a probate, administrator, personal representative or executor bond. 

A leading national provider of all types of fiduciary bonds, Colonial Surety Company, makes it easy and efficient to obtain all types of bonds for probate court. Just get a quote online, fill out the information, and enter payment. Print or e-file the bond from anywhere—even before leaving probate court.

Quote and Obtain All Types of Probate Bonds Here

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