Family Settlement Agreement
The family settlement agreement is a document that can be filed at the conclusion of administration of an estate wherein the beneficiaries accept their distributions and release the executor or administrator from any liability for their handling of the estate. Often, an informal accounting will accompany the settlement agreement so all interested parties can review the administration of the estate. The document would also clearly state the distributions of the net assets of the estate. With respect to cash assets, this may be accomplished by specific dollar amount or by percentage.
One of the benefits of finalizing estate administration by agreement is fewer filing fees and legal fees since less paperwork is filed with the court and a court hearing is not required. Executors or administrators should still publish notice of the estate for any potential creditors and wait one (1) year before distribution. It is possible to allow distributions prior to the one year mark from notice of the estate. In that scenario, it is important to include language that beneficiaries will return funds as needed if a valid creditor is subsequently identified and makes a timely claim against the estate.