Final Distribution in California Probate: Complete Guide to Closing Estate

After months of probate administration—paying debts, selling property, filing tax returns—executors finally reach the finish line: final distribution. This is when beneficiaries actually receive their inheritance and the estate is officially closed.

As a Glendale probate attorney who guides executors through hundreds of final distributions, I know that properly closing an estate requires careful attention to detail. Skipping steps or distributing assets prematurely can result in personal liability for the executor.

This comprehensive guide explains the complete final distribution process in California probate: when you're ready to distribute, final accounting requirements, petition for distribution procedures, the distribution hearing, transferring assets to beneficiaries, obtaining receipts, closing estate accounts, and formal discharge as executor.

When Is Estate Ready for Final Distribution?

Before distributing, executor must complete ALL duties:

Prerequisites for Distribution

✓ Creditor claim period expired (minimum 4 months from letters)

✓ All creditor claims resolved

• Allowed claims paid
• Rejected claims either settled or barred

✓ All debts and expenses paid

• Funeral expenses
• Administration costs
• Taxes
• Final bills

✓ All taxes filed and paid

• Final income tax return (decedent)
• Estate income tax returns (Form 1041)
• Estate tax return (if required)
• All tax clearances obtained

✓ Property sold (if applicable)

• Real estate sales completed
• Proceeds in estate account
• Escrow closed

✓ All assets converted to distributable form

• Property liquidated (if directed)
• Assets in executor's possession
• Ready for transfer

✓ All required notices given

• Beneficiaries notified of impending distribution
• Creditors given final notice

Timing: Typically 12-18 months after probate opened.

Rushing distribution before completing these steps = Executor liability

Final Accounting

California Probate Code Sections 10900-10954

What Is Final Accounting?

Comprehensive financial report showing everything that happened during probate:

Must include:

1. Opening inventory (assets at start)
2. All income received (rents, interest, dividends, sale proceeds)
3. All expenses paid (debts, taxes, administration costs)
4. Property sold and sale terms
5. Assets remaining for distribution
6. Proposed distribution plan

Purpose: Shows beneficiaries and court exactly what happened to estate assets.

Preparing Final Accounting

Use: Judicial Council Form DE-160 (continued on Form DE-160A if needed)

Requires:

Schedule A - Inventory:

• List of all assets at death
• Date of death values
• Property descriptions

Schedule B - Gains on Sales:

• Property sold during probate
• Sale prices
• Gains or losses

Schedule C - Income:

• Rents received
• Interest and dividends
• Other income
• Dates and amounts

Schedule D - Disbursements: Organized by category:

• Funeral expenses
• Debts of decedent
• Expenses of administration
• Taxes
• Creditor claims
• Other expenses

Each expense must show:

• Payee name
• Purpose
• Date paid
• Amount
• Check number

Schedule E - Assets Remaining:

• Current inventory of assets for distribution
• Current values
• Where held (accounts, etc.)

Schedule F - Proposed Distribution:

• Who receives what
• Specific assets or cash amounts
• Percentages if proportional

Total pages: Can be 20-100+ pages depending on estate complexity.

Supporting Documentation

Attach to accounting:

Required exhibits:

• Receipts for all major expenses
• Bank statements
• Sale escrow statements
• Tax returns
• Creditor claim documents
• Court orders approving sales or compromises

Executor's declaration:

• Sworn statement that accounting is accurate
• Under penalty of perjury

Petition for Final Distribution

California Probate Code Section 11600

Purpose

Formal request to court:

• Approve final accounting
• Approve executor fees
• Approve attorney fees
• Authorize final distribution
• Discharge executor

Preparing Petition

Must include:

1. Reference to accounting

• Accounting filed concurrently or previously
• Incorporated by reference

2. Proposed distributions

• List each beneficiary
• Describe assets or amounts each will receive
• Show calculation if percentage-based

3. Request for fee approval

• Executor statutory fee calculation
• Attorney statutory fee calculation
• Any extraordinary fee requests
• Supporting documentation

4. Request for distribution

• Authorize executor to distribute assets
• According to will or intestate succession
• Per proposed schedule

5. Request for discharge

• Release executor from further liability
• Exonerate from bond

6. Orders requested

• Specific court orders needed
• Property transfer authority
• Any other relief

Notice Requirements

Must give notice to:

• All beneficiaries
• All heirs
• Creditors (if applicable)
• Director of Health Care Services (if Medi-Cal recipient)

Timing: At least 15 days before hearing

Method: First class mail with proof of service

Distribution Hearing

What Happens at Hearing

Court reviews:

• Final accounting
• Petition for distribution
• Executor fee request
• Attorney fee request
• Any objections

Executor (or attorney) appears at hearing.

Judge may ask:

• Questions about accounting entries
• Explanation of unusual expenses
• Verification of tax compliance
• Confirmation beneficiaries agree to distribution

Possible Objections

Beneficiaries may object to:

1. Accounting errors

• Missing assets
• Incorrect values
• Unexplained expenses
• Improper payments

2. Executor fees

• Fees too high for work done
• Executor breached duties
• Misconduct

3. Proposed distribution

• Incorrect beneficiaries
• Wrong percentages
• Assets should go to different people

4. Administration issues

• Executor mismanagement
• Delays unreasonable
• Debts not properly paid

Burden: Objecting party must show objection has merit.

If no objections: Hearing takes 15-30 minutes.

If serious objections: May require separate evidentiary hearing.

Order Approving Final Account and Distribution

If approved, judge signs order:

Order includes:

• Approval of final accounting
• Approval of executor fees
• Approval of attorney fees
• Authorization to make distributions
• Discharge of executor (30 days after order)
• Exoneration of bond

Certified copies needed for asset transfers.

Distributing Assets to Beneficiaries

Timing

After order becomes final:

• Usually 30 days after signed (appeal period)
• Can distribute immediately if all beneficiaries consent to waive appeal period

Methods of Distribution

Cash distributions:

1. Write checks from estate account
2. Wire transfer funds
3. Deliver cashier's checks

Real property:

1. Prepare executor's deed
2. Reference court order
3. Record with county recorder
4. Deliver recorded deed to beneficiary

Securities (stocks, bonds):

1. Transfer to beneficiary's brokerage account
2. Or liquidate and distribute cash
3. Transfer agent instructions

Personal property:

1. Physical delivery to beneficiaries
2. Prepare receipts
3. Take photos of delivery

Vehicles:

1. Complete title transfer
2. File with DMV
3. Provide court order if needed

Documenting Distributions

Critical: Get signed receipt from each beneficiary.

Receipt should state:

• Beneficiary name
• Description of property received
• Date received
• Acknowledgment it's their full inheritance
• Release of executor from further liability
• Signature

Example: "I, [Beneficiary Name], acknowledge receipt of [describe property] representing my full inheritance from the estate of [Decedent Name]. I release the executor from any further liability regarding this estate."

Keep receipts permanently - proof executor completed duties.

Partial Distributions

Sometimes distribute in stages:

Partial distribution before final:

• After creditor period
• Before all administration complete
• With court approval
• Reserve sufficient funds for remaining expenses

Final distribution:

• After all duties complete
• Remainder of assets
• Close estate accounts

Special Situations

Minor beneficiaries:

• Cannot receive inheritance directly
• Must establish blocked account at bank
• Court order required
• Guardian manages until age 18
• Or establish guardianship of estate

Beneficiaries with special needs:

• Consider special needs trust
• Protect government benefits
• May require court approval

Unknown whereabouts:

• Make reasonable efforts to locate
• File with court if cannot locate
• May escheat to state after period

Disputed distributions:

• Hold funds pending resolution
• Seek court guidance
• May require separate litigation

Tax Considerations

Income Tax Reporting

Beneficiaries receive Schedule K-1 showing:

• Their share of estate income
• Their distributive share
• Tax character of distributions

Most distributions tax-free (basis step-up at death).

But estate income during probate is taxable to beneficiaries when distributed.

Estate Tax Clearance

If estate tax return filed:

• Obtain closing letter from IRS
• Shows estate tax paid or none due
• Protects executor from later claims

May take 6-12 months for IRS to issue.

Can distribute before receiving if estate tax clearly paid or not applicable.

Property Tax Issues

Real property transfer may trigger reassessment.

Beneficiaries should know:

• Property taxes may increase
• File for parent-child exemption if eligible (Prop 19)
• New assessed value based on current market

Closing Estate Accounts

Bank Accounts

After all distributions:

1. Verify all checks cleared
2. Transfer any remaining interest to final account
3. Close estate accounts
4. Obtain final statements

Timing: Don't close too early - need to ensure all obligations paid.

Investment Accounts

1. Transfer securities to beneficiaries
2. Liquidate remaining positions
3. Distribute final proceeds
4. Close accounts

Credit Cards

1. Cancel estate credit cards
2. Pay final bills
3. Close accounts

Utilities and Services

1. Transfer to beneficiary (if keeping property)
2. Cancel services (if property sold)
3. Pay final bills
4. Close accounts

Executor Discharge

California Probate Code Section 12200

What Is Discharge?

Formal release of executor from:

• Further duties
• Personal liability
• Bond obligations

Occurs: Automatically 30 days after order approving final account (unless appeal filed).

Effect of Discharge

Executor:

• No longer has authority to act
• Released from bond
• Liability limited to accounting period
• Can be surcharged only for disclosed matters

Does not eliminate liability for fraud, concealment, or undisclosed misconduct.

Final Report and Petition for Discharge

Sometimes separate document requesting:

• Court finding all duties completed
• Formal discharge order
• Exoneration of surety

Judge signs: Final order discharging executor.

Common Final Distribution Problems

Problem: Beneficiary Won't Sign Receipt

Solution:

• Explain receipt doesn't waive valid claims
• Note in records beneficiary received distribution
• May need court order confirming distribution made

Problem: Insufficient Funds for All Debts

Insolvent estate requires:

• Pay in statutory priority order
• Prorate within each priority class
• Get court approval for distribution plan

Problem: Disputed Distribution Amount

Options:

• Mediation
• File interpleader (deposit with court)
• Seek court determination
• Hold disputed amount pending resolution

Problem: Property Can't Be Divided

Real estate to multiple beneficiaries:

• Sell and divide proceeds, OR
• Award to one with cash equalization, OR
• Create co-ownership (least recommended)

Problem: Estate Ran Out of Money

If administration costs exceeded assets:

• Petitioner may have advanced costs
• May seek reimbursement from beneficiaries
• Usually no recovery available

How Long Does Final Distribution Take?

From filing final accounting to distribution:

Uncontested:

• File accounting and petition: Day 1
• Hearing scheduled: 4-6 weeks
• Order signed: Same day as hearing
• Order becomes final: 30 days after signing
• Distributions made: Days after final
• Total: 2-3 months

Contested:

• Objections filed: Extends timeline
• Evidentiary hearing: +2-6 months
• Resolution or trial: +6-12 months
• Total: 8-18+ months

Frequently Asked Questions

Can executor distribute before all taxes filed?

Risky. Should wait for tax clearances to avoid personal liability if additional taxes later assessed.

What if beneficiary refuses to accept inheritance?

Beneficiary can "disclaim" (refuse) inheritance. Must be in writing within 9 months. Property passes as if beneficiary predeceased.

Can beneficiaries agree to different distribution than will provides?

Yes, if all agree in writing. Court must approve compromise.

What if executor made mistakes in accounting?

File corrected accounting before distribution. Disclose errors to beneficiaries. May be surcharged if mistakes caused losses.

How long must executor keep records?

Permanently advisable, minimum 7 years. Beneficiaries could challenge years later.

Can executor be sued after discharge?

For fraud or concealment, yes. For disclosed matters in approved accounting, no (absent fraud).

Related Articles

Learn more about California probate:

• California Executor Duties & Responsibilities - Complete duties checklist from appointment through final distribution.

• How Long Does Probate Take in California? - Final distribution is the final stage of 12-18 month process.

• How Much Does Probate Cost in California? - Executor and attorney fees approved at final distribution.

• Executor Fees California - How executor compensation is calculated and approved.

• Petition for Probate California - Beginning of probate process; final distribution is the end.

Get Help With Final Distribution

The final distribution stage requires careful preparation of accounting, compliance with notice requirements, and proper transfer of assets. Errors at this late stage can delay closing the estate by months.

Call (818) 291-6217 to schedule a consultation at my Glendale office, or complete our probate questionnaire to discuss your probate case.

As a California probate attorney serving Los Angeles County, I guide executors through the final distribution process, prepare comprehensive final accountings, represent clients at distribution hearings, and ensure estates are properly closed with executors fully discharged from liability.

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About the Author

Rozsa Gyene (State Bar No. 208356) is a California estate planning and probate attorney serving Glendale, Burbank, Pasadena, and throughout Los Angeles County. With extensive experience closing probate estates and navigating final distribution procedures, Rozsa ensures executors complete their duties properly and beneficiaries receive their inheritance without delay.

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Disclaimer: This article provides general information about California probate final distribution and should not be construed as legal advice. Every situation is unique. Laws, procedures, and requirements change, and this article reflects California law as of January 2025. Consult with a qualified California probate attorney about your specific circumstances.