Administration of an estate

When a loved one passes away, the emotional loss is often accompanied by a range of financial and legal matters. If you, as an heir, or one of the other heirs, accept the estate subject to conditions, the general rule is that the estate must be administered.

In short, administration consists of a series of statutory actions aimed at settling the debts of the estate as far as possible and determining whether any assets remain for you and the other heirs. In effect, the estate is prepared for distribution.

What is administration of an estate?

Administration is a method of settling an estate whereby creditors are called upon and paid in an orderly manner. Once all creditors have been satisfied, you and any other heirs who have accepted the estate subject to conditions may divide the remaining assets among yourselves.

As part of the administration process, it is important to draw up an inventory of the estate. An inventory lists the assets and the (anticipated) debts, thereby establishing the scope of the estate.

When is administration of an estate not required?

In certain situations, administration of the estate is not required.

This may be the case, for example, where a will appoints an executor and the executor declares that the estate is more than sufficient to pay the debts. This is referred to as a declaration of sufficiency.
Another situation in which administration is not required is where the sub-district court grants an exemption. Such an exemption may be requested, for example, if an heir is a minor and the estate is sufficient to settle the debts.
Administration is also not required where the statutory distribution applies and the surviving spouse has accepted the estate unconditionally.

Administrator

An administrator is the person responsible for settling the estate. Their role includes:

managing the finances and property of the deceased,
settling outstanding debts and obligations,
carefully distributing the remaining estate in accordance with the wishes of the deceased or statutory provisions.

If you and the other heirs have accepted the estate subject to conditions, you jointly act as administrators. An exception applies where an executor has been appointed and a declaration of sufficiency has been issued.

It is also possible for the court to appoint an administrator. This may occur in various situations. For example, as heirs, you may request the appointment of an administrator from the sub-district court if you cannot agree on the settlement of the estate. An administrator may also be appointed at the request of creditors.

Simplified versus formal administration

There are two ways of administering an estate: simplified administration and formal administration. The main difference between these two forms is that formal administration entails more extensive obligations.

If you have been appointed as administrator, it is important to understand which form of administration applies to your situation in order to comply with your duties.

Administrator versus executor

There is a significant difference between an administrator and an executor. An administrator is appointed by the court and must settle the estate in accordance with a prescribed procedure and strict requirements.

An executor, by contrast, is appointed in the testator’s will. The executor manages the estate. If there is no will, there is therefore no executor.

WHY ENGAGE OUR INHERITANCE LAWYERS?

Would you like to discuss whether accepting an estate under the benefit of inventory (beneficiair aanvaarden) is the right step before you decide? Or have you already accepted the estate under the benefit of inventory and do you need assistance with the liquidation (vereffening)? Or do you have questions more generally about liquidation or Dutch inheritance law? Please contact one of our experienced inheritance lawyers.