How to Settle an Estate

February 24, 2020

When you’re named the executor of an estate for the first time, many questions will come to mind. As an estate executor, also known as a personal representative, you are responsible for overseeing and protecting the deceased’s home, financial savings and other assets. You remain in charge of the estate until the will is validated during the probate process, heirs receive their asset distributions and the estate is settled.

How To Settle an Estate

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How Long Does it Take to Settle an Estate?

Settling an estate involves several steps and can feel quite overwhelming. Some estates get settled in under a year, while others may take up to five years or more. You may need the help of an experienced lawyer, especially if you are dealing with an unusually large estate or uncertain family dynamics.

Using estate executor software like EstateExec is useful for saving time whether or not you hire a lawyer. The software guides you through the estate settlement process and can provide documentation to family members as well as the probate court.

Breaking Down Estate Executor Duties

We’ve broken down estate administration into steps you need to take immediately, what can wait a bit and what you need to do in the future. Some estates may take longer to settle than our timeline, depending on the complexity of the will and the extent of the deceased’s assets or debts.

First Month

Obtain a copy of the death certificate

Obtain a copy of the death certificate from the funeral home or the vital records office in the state or region where your loved one died. Banks, life insurance companies, the Social Security Administration, the Department of Veterans Affairs and other organizations need a copy to document your loved one’s death. Order more copies than you think you’ll need to save yourself a headache later.

Obtain a copy of the will and file the petition for probate

The person who let you know you were named executor likely has a copy of the will. File the will with probate a month or less after the death. You’ll also need to file your letters testamentary, the documents that prove that you are the executor of the will.

Talk to an expert

If you are dealing with a large or complicated will, you should speak with an expert. An attorney, accountant or another expert who specializes in estates can help with tax laws and other matters.

Planning the funeral

The process is simplified if the deceased specified their preferences in the will or made prepaid funeral arrangements. If the estate provides burial insurance, find out if there are any stipulations on funeral arrangements. Otherwise, talk with the family and see what they have in mind.

Notify the Social Security Administration

Contact the Social Security Administration if your loved one received Social Security benefits. Contact your regional office quickly to avoid paying back payments disbursed after death.

Months Two Through Six

Identify All Estate Assets

Your job as executor is to protect the assets, so you need to identify, locate and itemize everything in the estate. You will ensure assets remain protected until distribution. Document all belongings, including:

Insurance policies Possessions
Bank and investment accounts Trusts
Bank deposit boxes Business interests
High-value items Real estate

If your loved one had valuable possessions like jewelry, art or antiques, locate documents that establish their value or have them professionally appraised.

What is the Waiting Period on Life or Burial Insurance?

Burial insurance has a waiting period that can last years so the policy can build value before paying out. If a life insurance policy has a waiting period, it’s usually one or two years, or perhaps 90 days if purchased through your employer’s group plan. If you die before the waiting period on your burial or life insurance, the policy usually refunds your paid premiums to the beneficiary.

Open an Estate Bank Account

You should open a dedicated bank account to consolidate the assets. You’ll use this account to pay off any debts of the estate. Transfer assets from life insurance policies, retirement accounts, savings accounts, investment portfolios or other sources into the new estate account.

Submit Estate Inventory to Probate Court

Supply a list of all of the property and assets and debt (bills, loans or taxes) to the probate court. Include a list of beneficiaries and what they stand to inherit. This must happen before anything is released for distribution.

Months Seven Through Twelve

Remove Liens on the Estate

All of the assets from the estate will automatically have a tax lien from the IRS. You’ll need to secure a release of any liens to sell or distribute assets, which transfers the titles of property into your name.

Pay Taxes and Settle Debts

One of your roles as an estate executor is to ensure that all outstanding bills and taxes get paid off. You’ll need to identify remaining debt by reviewing the will and looking through the deceased’s paperwork, including email, letters and files. File federal and state taxes with the help of a tax professional to be sure you do it correctly.

You may find the deceased did not have enough cash assets to pay all debts. A judge orders payment to creditors through liquidation of physical property in these cases. This situation can add considerably to the time it takes to finalize the estate.

Months Thirteen Through Eighteen

Distribute Assets

You can begin to distribute items according to the will’s specifications once probate is removed and taxes and debts are settled. This can be a difficult process, especially if the family is combative or the will is not specific about items of sentimental or monetary value. It helps to have an experienced probate attorney who can help you navigate communication with the beneficiaries.

Final Thoughts on How To Settle an Estate

Settling an estate can be a lot of work. Be sure to keep a running list of tasks and include due dates and contact information when possible. Consider using software designed to walk estate executors through the process. Speak with an experienced probate lawyer or tax professional to help you with the process and ensure that the estate is settled with no issues.



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