Losing a loved one is a difficult and emotional experience and dealing with the deceased person’s estate while you’re grieving can be overwhelming. This is a step-by-step guide to what you need to do as soon as possible after someone has died, to take care of practical matters during the first few weeks, and then to manage the process over the following months.
Immediate Steps: The First Week
Before we get to anything formal, there are some housekeeping items that demand immediate attention.
First, you have to secure certified copies of the death certificate. You’ll probably need 8 to 15 copies, and these must be originals, not photocopies. Banks, insurance companies, federal and state agencies, and the probate court require original death certificates. So order more than you think you’ll need, running out can cause delays.
You’ll also need to secure property of the deceased. This means changing locks on real estate, if necessary, moving vehicles to a safe location, and stopping any automatic payments or subscriptions that will continue to be paid from bank accounts. If no one steps in and takes care of these matters early, the deceased’s assets could lose value or be needlessly depleted before the estate is even opened.
Next, notify the relevant institutions. This includes the bank, the employer if applicable, pension providers, and any government benefit programs. These notifications will stop payments the estate isn’t entitled to and begin the process of formally settling financial matters.
Locating and Reviewing the Will
Once you have those immediate tasks out of the way, track down the original will. For the purposes of probate, copies won’t do, you need to locate the actual physical document, complete with the decedent’s original signature. Search your loved one’s personal files and safe deposit box. If they had legal representation, the attorney who drafted the will may have a copy, or the firm could be in possession of the original.
Once you find the will, give it a read, ideally, you’re looking for a self-proving will which has notarized witness signatures and can often be filed directly with the court without the witness needing to appear and attest to the signature. If the witnesses did not have their signatures notarized, their testimony may be needed to prove the validity of the will, which can add time to the process.
If there is no will, the estate is deemed intestate, and the distribution of assets will be according to the succession laws of the deceased’s state, not what they may have expressed they wanted. The court will appoint an administrator (referred to as the executor if there’s a will) but the process continues, it’s just determined by law, not the deceased.
Probate vs. Non-Probate Assets: A Critical Distinction
Not all assets need to go through the court. Knowing which is which helps clarify a good deal of uncertainty.
Non-probate assets legally skip the court process, going directly to the named beneficiaries. This includes life insurance, retirement accounts like 401(k)s and IRAs, property owned jointly with rights of survivorship, accounts with a transfer-on-death (TOD) clause, and property transferred in a living trust. This can be transferred in a matter of weeks.
Everything else is a probate asset, and officially requires the court’s involvement to transfer. This includes property owned solely in the deceased’s name with no co-owner or designated beneficiary (such as real estate, a car, or any other physical property), personal property with no designated beneficiary, and investment accounts that weren’t transferred to a living trust.
Categorizing which is which early in the process outlines how much of the estate needs to be processed through court and gets everyone on the same page about how long it will take.
Opening Probate and Getting Legal Authority
In order to formally administer an estate, someone has to go to the probate court, typically with an attorney representing them, and petition the court to open estate proceedings. This is a formal process, involving the preparation of a petition to the court, the lodging with the court of the original last will and testament if there is one, and the payment of all the applicable court filing fees. The court will schedule a short hearing, at which, assuming there is not an immediate controversy or contest, the court will enter an order naming the person identified in the lodged will as executor (or if there is no will, an administrator).
Once that occurs, the newly appointed executor will receive the document (called “Letters Testamentary” if you are a named executor in a will or just “Letters of Administration” if you aren’t) from the Clerk of the Orphans’ Court where the petition was filed. Then, and only then, can the organization holding the decedent’s bank accounts, or with whom the decedent holds a mortgage, or to whom the real estate taxes are due, even begin to talk to the executor.
This is also when it makes sense to set up an estate bank account, you will need one. In order to do so, you will need an employer identification number for the estate account from the tax authority. It’s not the decedent’s social security number, it’s an EIN number. Working with a probate lawyer at this stage is often the most practical decision an executor can make, filing errors, missed deadlines, and misunderstanding what the court actually requires can result in personal liability for the executor, not just delays.
The account receives all the estate income, you pay all the estate expenses out of that, and the account’s activity is a clean, auditable record of your performance of your duties. If the account is missing, or not properly maintained, you will have to explain yourself to the judge. Your word that “I didn’t take anything” is just that. Your word. It’s not enough.
Managing the Asset Inventory
Once you have that legal authority, your primary responsibility as an executor is to locate and value everything in the estate. An asset inventory must include real estate, vehicles, bank and investment accounts, business interests, digital assets, and anything else of value. It doesn’t have to be exhausting, but it has to be thorough.
Real estate and major personal property often will require you to hire a professional appraiser to determine fair market value as of the date of the testator’s death. This value will be necessary for both the final accounting and, in some instances, possibly establishing an estate tax obligation.
Your fiduciary duty as an executor extends from soup to nuts. You must be honest, scrupulous about avoiding conflicts of interest, and base decisions throughout the process on what’s best for the estate and its beneficiaries, not what’s most convenient for you. Failure to meet that standard can and will leave you open to personal liability, which is one reason I strongly counsel people not to play this role casually.
Notifying and Paying Creditors
In most cases, the executor must pay debts according to a legally established order of priority. Funeral expenses and costs related to the administration of the estate are usually top priorities, as they are actual expenses incurred by the deceased specifically because of their death. Next come taxes, including property and income taxes.
Taxes owed can be a bit tricky; generally, the estate is liable for the decedent’s final income tax bill as well as any estate taxes they might owe, but if those bills would be onerous, the IRS and state revenue department may become priority creditors to prevent tax evasion. Then come secured debts with the assets tied to the debt used as collateral. For example, if the decedent had a mortgage the mortgage lender would be entitled to repayment of the mortgage loan. Finally, come general unsecured creditors.
Tax Filings During Estate Administration
The estate’s tax obligations tend to catch executors by surprise in two ways.
Time: The amount of time and effort needed to gather details and prepare the required returns is underestimated. There’s no time like the present to start work on them, because even if a return is not due for a year after the date of death, any tax owed is due no later than two months after that date.
Money: Often, estates need to be liquidated in part or in whole to pay whatever tax is owed. That can create problems when liquidation happens in a “buyer’s market” or when such sales trigger other tax events in the following year.
Settling an estate means meeting the estate’s tax obligations, which means avoiding the penalties that come with missing any deadlines. So an executor must make sure those obligations don’t take anyone by surprise.
Final Accounting and Distribution
Prior to giving anything to beneficiaries, the executor is required to compile a final accounting, which is a detailed report of all revenue collected by the estate, all expenses and debts paid, and all funds left to be disbursed. This accounting is submitted to the court for approval, or, in a less formal probate process, sent to every beneficiary for his or her assent.
Before funds are distributed, it is important for the executor to get signed receipt and release agreements from every beneficiary. Such agreements signal that the beneficiary has received his or her distribution and will not as a consequence file a claim against the executor. If some beneficiaries are minors and cannot give the necessary consents, the funds ought to be put in trust until they reach the age of majority to stop any future complaints. If the accounting is filed with the courts, the release commonly takes place in front of a judge; if it is an informal probate process, an additional form may need to be completed and filed.
When Professional Help is Non-Negotiable
A conscientious executor may be able to manage many estates without constant legal help. However, there are specific conditions that warrant professional support.
Family disagreements over inheritance tend to escalate into costly court battles and long-term litigation. An insolvent estate raises questions of who gets paid first, which a probate attorney can help work through. Business assets typically have complex requirements about their future use and potential complications with partners as part of the estate. Finally, if the deceased owned property in more than one state, you may need additional probate procedures.
The Role of an Executor
Advising that an estate be administered with care isn’t the same as saying it will be easy. Many estates can be quite complex, with court fees, regulatory requirements, and a range of unexpected issues. But being intimidated by the process isn’t necessary, either. Most executors or administrators have never had any experience with the responsibilities suddenly placed on their shoulders. They’re able to fulfill the requirements because they’re given the tools to do so.
