How to Settle an Estate

1. Find the will, if any

Sometimes finding the will is easy—and sometimes it’s not. Look in desks and filing cabinets (home and office), fireproof boxes, and anywhere else the deceased person was likely to stash important documents. If there’s a safe deposit box, even if you don’t have a key you will be allowed to open it for the sole purpose of looking for the will.  If there is no will, property will pass through intestate succession.

2. File the will with the local probate court

Make a copy for yourself, and then file the original with the probate court. Even if you don’t think you’re going to need to conduct a formal probate court proceeding, you’re required by law to deposit the will with the court.

3. Notify agencies and business of the death

For example, you should notify:

  • the post office
  • utility companies
  • credit card companies
  • banks, and
  • other businesses with whom the deceased person had an account. 

Also, notify any agencies from which the person received benefits — like the Social Security Administration (1-800-772-1213).  The more quickly you do this, the more quickly direct deposits (or checks) will be stopped, and you won’t have to worry about returning payments to which the estate is not entitled.

4. Inventory assets and get appraisals

You’ll need a thorough inventory if you conduct a probate court proceeding. In any case, it will help you keep track of valuables, determine how you can transfer different items (because you’ll note how title to assets is held), divide property among beneficiaries who are supposed to get equal shares (typical with siblings), and determine whether or not the estate will owe state or federal estate tax.

5. Decide whether probate is necessary

To make this determination, you’ll have to tally up the value of the property subject to probate, see how title is held, and learn your state’s rules on what estates qualify for simplified procedures. If you need to conduct a probate court proceeding, you can probably get help from the court’s website or other materials. You may also want to hire a lawyer to help with probate paperwork or to help solve any disputes among beneficiaries or creditors.

6. Coordinate with the successor trustee

If the deceased person left both a will and a living trust, as many people do, you’ll need to work closely with your counterpart who’s in charge of trust assets, the successor trustee. A living trust is like a will in that it lets someone leave property to named beneficiaries. The big difference is that trust property doesn’t have to go through probate before it can be turned over to the people who inherit it.

7. Communicate with beneficiaries

Your court, or a lawyer, can help you notify beneficiaries.  If the estate goes through probate, you’ll have to send very particular kinds of notices to a certain group of people. Whether or not there’s a court proceeding, it’s always a good idea to be in regular communication with beneficiaries.

Beneficiaries can grow unhappy—or suspicious of wrongdoing—when they aren’t kept in the loop about what’s going on with the estate. Even if nothing is going to happen for a while, let them know you’re moving ahead as fast as you can to get them their inheritance. Don’t surprise them with big moves like selling real estate—if they think you’re incompetent or dishonest, they can go to court and try to have you removed.

8. Take good care of estate assets

This is a key part of an executor’s job. You must keep real estate well maintained, small valuables secure, and everything of value insured. Keep investments safe—the goal is to avoid losing money, not to reap big returns.

9. Collect money owed to the estate

This will take some time to fill out paperwork and make phone calls, but it should be pretty straightforward. You can deposit the money you collect in the estate bank account.

10. Pay bills owed by the estate

You’re responsible for paying legitimate bills, as there is enough money in the estate to pay them. You don’t have to pay the deceased person’s debts out of your own pocket. If you think there won’t be enough money to go around, stop paying bills—and get some guidance from the court or an attorney about which debts should take priority.

11. Deal with taxes

You’ll need to file income tax returns for the deceased person and possibly for the estate. The deceased person’s tax preparer can be a big help here.  If the estate was very large – over $5 million — you may also need to file estate tax returns.  Smaller estates may owe a separate state estate tax; it all depends on where the deceased person lived and owned property.

12. Distribute the assets

When the debts and taxes are paid, when the probate (if any) is closed, your last job is to distribute property to the people who inherit it under the will or state law. (Then congratulate yourself for a job well done.)

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