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Settling an Estate: The Basics
The passing of a family member can spur many questions for relatives who are left behind. Our first recommendation is to ensure that everyone receives compassion and grace while grieving. Understand that everyone processes grief differently – some may be wrapped up in emotion while others shift into logistics mode – and neither reaction is wrong. As you begin to think about what will happen to your loved one's things, you may have questions about the process of settling an estate.
This guide is meant to introduce you to some basic topics, but it is not legal advice. Each state has its own laws pertaining to how an estate is settled, so once you've learned the terms and timeline, we suggest seeking out a local, legal resource.
What Is Probate?
The most important concept you'll need to understand when thinking about estate settlement is probate. While it is not always required for the process, it is very common. According to Investopedia.com, probate is "a legal process that occurs when a person dies that involves the validation and administration of their will." If the deceased does not leave a valid will, the local court will be moreheavily involved in probate proceedings than if there is a will. Probate involves gathering the deceased person's assets, paying off outstanding bills, and then distributing what's left among their beneficiaries.
The probate process with a valid will often still involves the court system, even in relatively simple cases. However, the estate settlement process without a will is a slower process because an administrator for the estate must be determined and the laws for who may inherit the property of the decedent (the legal term for the deceased person) must be followed
But there's more to settling an estate than determining inheritance.
Estate Settlement Timeline
Depending on the complexity of the situation, the estate settlement process may take anywhere from several months to a few years. The following is a general timeline for probate proceedings according to trustandwill.com. Keep in mind each step could take longer or be completed sooner.
- File the petition for probate: up to four months – You'll need the death certificate and a valid will (if one exists). Depending on your state, the petition may be a simple process, or it may include additional steps like announcing your loved one's death in the paper.
- Give notice to creditors: up to six months – Everyone the deceased person owed money to – from credit card companies to the bank that held their car note – should be notified. You may be able to find this information in your loved one's at-home paperwork, or you may need to ask one of the credit bureaus for a copy of their credit report. This part of the process allows the administrator and the court to see the full set of liabilities the estate holds.
- Pay off their debts and outstanding fees: six to 12 months – Before the estate can be settled, all outstanding debts, fees, and taxes must be paid. The probate process itself has associated fees that must be paid, as well.
- Inventory their assets: six to 12 months – From bank accounts and investments to real estate and luxury items, everything your loved one owned that had monetary value needs to be accounted for and appraised. If they owned intellectual property such as books, music, patents, or design rights, make sure to count that, too.
- Distribute assets: nine to 18 months – State law determines when this step happens, so make sure to check your local laws for accurate information. Typically, the distribution of assets happens after all creditors have been paid.
- Close the estate: nine to 24 months – Once the administrator has completed their duties, a probate judge will issue the Final Order for Discharge of Personal Representative, and the estate will be considered closed.
While it may seem daunting, the process of settling an estate is necessary to ensure all that your loved one worked for during their lifetime is accounted for and left to those they cared for. We hope this introductory guide helps you feel more informed and comfortable with the final legal stages of carrying out their wishes.
Here are some additional resources for information on the estate settlement process:
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