Once all the previous tasks have been completed, it is time to begin settling the remaining estate. As previously mentioned, your loved one’s private assets will be tied up until this is done, and you will need these assets to move on with your and your family’s lives.
The first step will be to contact everyone that will be involved, which may include your attorney and/or accountant and the executor and/or trustee of your loved one’s estate. The executor of their will or trustee of any trusts are the only one authorized to carry out these steps. If there is no will, the probate court will appoint an administrator, which may be you.
Most of these steps require a copy of your loved one’s death certificate. This can give you an idea of how many you may need just for this process.
Keep records of everything and notify the executor of the estate, if it is not you, about the accounts you close, outstanding debts, and withdrawals of cash from any accounts.
Trusts are handled without involvement of the probate court and can be attended to by your attorney and the trustee working together. You can start the process as soon as you are ready.
You or the executor named in the will and the attorney should file a petition for probate with the probate court along with a copy of your loved one’s will. While you can file the petition as soon as you are ready, the approval takes a while. States have a waiting period before the probate process can begin, usually one month. Despite this, you should meet with a probate attorney as soon as possible.
If there isn’t a will, the probate court judge will name an administrator in place of an executor.
The probate process starts with an inventory of all their personal/unshared assets, such as property, bank accounts, house, car, brokerage account, personal property, furniture, jewelry, and animals, which will need to be filed in the probate court. Trusts, shared, jointly-owned, and transfer-on-death assets are not included.
Before discussing who to contact about your loved one’s finances and paying bills, it’s important to understand what happens to their debt after they die. There are some important points to keep in mind.
As discussed in the Estate Planning section, it is important to know the difference between assets considered part of the estate and those that are not. In addition, you must know which jointly-owned assets are protected from creditors.
Debtors are first in line to get any money owed to them from available assets and beneficiaries will only be entitled to the remainder. If the debt exceeds the value of the estate, heirs/beneficiaries are not responsible to pay the remainder and the creditors will take a loss.
If you receive any property with a debt, like a home mortgage or a car loan, the debt comes with the property.
Your loved one’s student loans will be forgiven.
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If authorized as the designated agent (usually the executor), ask about any debts, loans, or other money owed to the institution and arrange to have them paid. Debtors are only entitled to payment from your loved one’s estate, unless you are their spouse or co-signer of a loan or mortgage.
Your options for paying off a mortgage depend on your situation.
Change ownership of joint bank accounts.
If you were not a joint owner or co-signer, you cannot access your loved one’s bank account.
You must take copies of the death certificate to each bank to change ownership of the accounts or ask questions about a deceased loved one.
You may need a court order to open and inventory a safe deposit box if a key or password isn’t readily available. Most probate courts have administrative rules about steps to access the box of any decedent.
If your loved one was working and you haven’t already, contact the employer for information about pension plans or retirement annuities, credit union death and other benefits, and company insurance policies.
The dual purpose of contacting these companies is to ask about your loved one’s credit card debt and to cancel the cards. As long as your loved one’s cards are active, the account is vulnerable to identity fraud and theft.
After you have contacted the banks and credit card companies, you may have a good idea how much debt your loved one had, but there are many other possible debts.
You should also notify federal, state and local officials, landlords, rental agencies, utility companies, and administration offices for assisted living or nursing homes as soon as possible. You may need to discuss debts, rental payments and lease or rental agreements, ongoing expenses for services, and outstanding taxes.
Your loved one may have had many types of insurance that will help you out financially once they are settled. They may be life insurance or annuities that will pay a benefit to you as the beneficiary or mortgages, credit cards or other loan insurance that might pay for the debts directly.
There will also be many insurance policies that your loved one no longer needs.
As mentioned previously, your loved one becomes ineligible for Social Security benefits as soon as they die.
In attempting to find all of your loved one’s assets, you may have to find and speak with any financial professionals they have used to identify any additional financial and investment accounts that they held. They will go over these accounts with you and can help you manage them.
They say the only certain things in life are death and taxes. This even includes taxes after death. You and/or the executor must file a final tax return for the year your loved one dies.
Probably the last part of the estate that will be dealt with is your loved one’s possessions. It can be a very emotionally taxing task. Everything you see can evoke a memory, some of which may be painful. Some may cause guilt when you discard them, even though the item will not be useful to anyone.
It can be time consuming and will most likely take multiple sessions to complete. It may be better to do the task with another family member to reduce your workload, support you, and help you make decisions about items.
Like everything else in this section, it is better if you planned ahead. Not only will you know what items need to be taken into account, you may even know where your loved one wants them to go and get a headstart on distributing them.
There are many options for each item, depending on whether your loved one wanted to hand it down to a specific person, how valuable the item may be to you, each item’s meaning to the family or friends, or the situation you find yourself in after their death.
Although a daunting task, there are ways to approach it in a less chaotic manner.
Start with a quick scan of the items to determine the scale of your project. Look for any that need to be prioritized, such as houseplants or very expensive items that should not be left in an empty house.
Then do an inventory of the remaining items, along with their location. You may be able to do this more gradually and at your own pace with these items, unless there is a reason to hurry, such as a lease running out. However, in this case you can move everything and still be able to go at your own pace.
You should decide on some organized approach, such as by room or item description such as food, clothes, books, art, etc. Keep a list as you go to prevent sorting items more than once.
During this inventory evaluate each item and tentatively decide on which of the above categories they go in and start to plan how to follow through.
Evaluate the condition of each item.
Look at your own residence and talk to family about how much can realistically be taken and used.
Trust your gut feeling about the sentimental value of each item and whether that alone is a reason to keep it.
Try to assess the overall usefulness of each item and predict its possible use to anyone. Consider whether you want to keep it, give it away to family/friends or charity, or sell it.
Other items may have aesthetic value, like a painting or jewelry, or be valuable for other reasons, such as antique furniture or a coin collection. Many antiques and art items may not have a lot of intrinsic value. Sometimes a professional appraiser can help.
Consider giving items to an organization that will find someone who could use the item if:
Whether you want to sell or donate these items is usually based on preference or need.