Last Updated on August 21, 2024
By Stephanie Hyland, Storage.com
Losing a loved one is difficult, but settling their estate doesn’t have to be. If you have recently become an executor or personal representative of a loved one’s estate, the process may seem daunting and may have you overwhelmed if you don’t know where to start. By staying organized and knowing what steps need to be taken, managing property, filing a tax return, and understanding all of the legal documents that correlate with this process can help put you at ease.
Here is a list of 10 things every executor will need to know when it comes to settling a loved one’s estate.
1. Locate Important Documents and Appraisals
Since you have already been notified that you are the personal representative for your loved one’s estate, chances are you have located their will. However, other important documents that you need to have in your possession include a copy of their death certificate, trust information, proof of their insurance, investment account information, bank account information, real estate property documentation and past employment documentation. If your loved one was receiving social security, it is also important to notify the agency as soon as possible of the death. This is important to remember so you can avoid having to go through the process of returning a social security check. If your loved one was an art lover or collector, and you cannot find values of certain objects, an appraiser will be able to give you a documented appraisal for any items you may have questions about.
2. Apply For Probate
Every state is different when it comes to applying for probate. Review your state laws to see if the estate you are handling must go through probate court. If the answer is yes, the probate court will legally recognize you as the executor with letters testamentary, also known as surrogate certificates. These types of certified documents are proof that you have been recognized as the legal authority to act on behalf of your deceased loved one’s estate. Acquire these documents in order to get the ball rolling with paying their current and incoming bills, filing a tax return, managing and distributing assets, communicating with the beneficiaries, and accessing bank accounts.
3. Contact Individuals Mentioned in the Will
When it comes to notifying beneficiaries who were named in the will, it is important to let them know that none of the assets, no matter how big or small, can be distributed until the probate process has been completed and all creditors have been paid in full or prioritized by the state.
4. Consider Hiring an Attorney
When it comes to filing court documents to settle an estate, leave it to a professional, especially if arguments arise between beneficiaries. An attorney who specializes in this area will know the correct paperwork that is needed for specific steps of this process and will be able to answer any questions your family may have. Hiring an attorney can help assure that your family and the assets noted by your loved one are not tied up in a courtroom any longer than necessary.
5. Stay Organized
With so many documents, checks, and other important paperwork on your desk, it is important to stay organized to ensure all records are being kept up-to-date. Creating a designated filing system for all of your loved one’s paperwork will help keep everything in order and easy to find. When it comes to settling an estate, it’s always a good idea to make duplicate copies of paperwork that you send to creditors and other outside parties just in case any questions are asked later. When you get toward the final stages of this process, you will need to compile a final accounting that will need to be approved by all beneficiaries involved. Staying organized will help you stay stress free from start to finish.
6. Pay Off Valid Creditors
As the executor, it is your responsibility to ensure that any outstanding debt that your loved one had gets paid. If the debt is more than the worth of their assets, inheritors are not liable for settling the difference. Before paying off any debt, as the executor, you are responsible for ensuring that the estate’s assets can cover the entire cost of any outstanding debt. If that won’t happen, creditors will be prioritized by the state. If your loved one did not keep an organized budget for you to review, some of the first places to look for outstanding debts are in their incoming mail, their checkbook, their email accounts, and their past tax returns.
7. Manage Any and All Property
When it comes to managing the property your loved one owned, the main concern is protecting the area(s) from damage. If you do not know how much the real estate is worth, it is important that you hire a property appraiser to give you a quote. If your loved one was a business owner, you may need to take steps to ensure that the business is kept running until any further decisions are made about its’ future.
8. File Tax Return for Deceased Party
When it comes to filing a tax return on your loved one’s behalf, consider using a tax professional who can help make that stack of paperwork a stress-free experience. A professional can help solve any issues involving inherited assets such as a residence, investments, stocks, or retirement accounts. They can also give you a run down of all of the important information you will need to bring with you to an appointment to make sure that the tax return is filled out correctly and both the income and estate taxes are covered.
9. Distribute to Beneficiaries
After all debts have been paid, it is your job as the executor to make sure that every beneficiary receives what they were promised in your loved one’s will or in accordance with the law. During this distribution process, trusts may need to be established if noted in the will.
10. Finalize Estate in Court
After the creditors, beneficiaries, and other financial decisions have been made or fulfilled, the final accounting that you complete will be reviewed by the court. The final accounting must include any distributions, expenses, and any type of income earned by your loved one’s estate since their death. Once all of the accounting has been approved by the beneficiaries and the court, the court will issue a final report and close the estate.
