Settling an estate: Financial steps to take when a loved one dies

While settling an estate can often be complicated and time-consuming, a fiduciary will help guide you through the process. Given the details and requirements, it can sometimes take up to three to four years to settle an estate (see the timeline below).

When you partner with a professional fiduciary, you’ll have a direct resource to help you through each step and ensure a smooth transition of wealth.

Professional fiduciaries handle all aspects of estate settlement and administration, including locating and safeguarding estate assets, overseeing investment accounts, managing and selling properties, transitioning household employees, identifying opportunities to minimize taxes, tax compliance and audit support, and distributing assets to your beneficiaries. Your fiduciary is an impartial voice in the room, providing direction, addressing concerns and, when necessary, mediating conflicts that may arise. 

Collaborating with your family

Fiduciary Trust often is named as executor, trustee, or both, in wills and trust documents. We also can work directly with the co-executor and/or co-trustee of your choice. In the case of a co-fiduciary appointment, all decisions are made jointly, while the Fiduciary Trust team manages most of the administrative tasks.

If needed, we also provide support services and guidance as an agent to your named executor or trustee, typically a family member, friend, attorney, accountant or financial advisor. The responsibilities of an executor or trustee can be overwhelming, so it is helpful to have professional resources, expert advice, and administrative services to assist a named individual fiduciary.

Our estate settlement team includes seasoned estate officers, associates and administrative professionals. In most cases, one estate officer and one estate associate settle an estate in collaboration with other colleagues across Fiduciary Trust. We also support large and complex estates with three or four team members. Typically, our team is involved in settling between 40 and 50 estates at any given time. We have the flexibility and resources to manage estates regardless of their size or complexity.

We work directly with beneficiaries and solicit feedback in order to address specific concerns. For example, when a beneficiary needs investment management advice, financial or tax planning guidance, the team brings in colleagues from other areas of our firm. As needed, we partner with prominent real estate brokerage firms, auction houses, appraisers, and other estate-planning professionals in the US and overseas.

Estate settlement timeline

This timeline offers a general idea of what the process entails.

Months 1-3

• Review the estate planning documents and gather financial documents
• File the will and petition the probate court to appoint the executor
• Notify beneficiaries and creditors of the probate court hearing, if necessary
• Locate and secure all personal property and the decedent’s residence
• Cancel personal accounts such as memberships and subscriptions

Months 3-6

• Transfer investment and cash accounts, as well as financial interests in partnerships or other businesses, into a single estate account
• If cash is needed to pay estate taxes, cash bequests, administrative expenses or debts, decide which assets to sell
• Send the probate court a detailed inventory of all assets owned by the decedent
• Appraise and insure valuable estate assets
• Locate all assets and secure their "date of death” values

Months 6-9

• Distribute personal property as directed by the estate planning documents
• Satisfy cash bequests to beneficiaries
• If real estate is to be sold, identify brokers to list and sell property, secure federal estate tax release of lien from IRS
• Resolve any outstanding creditor claims
• Prepare and file a federal estate tax return and pay state and federal estate taxes, if applicable
• Secure an extension of time to file the state and federal estate tax returns if information to file return is not complete.

Months 9-18

• Make partial distributions of estate assets to heirs after filing state and federal estate tax returns
• Maintain a reserve to pay the estate’s expenses until it is settled
• File fiduciary income tax returns for the estate
• Prepare and file the decedent’s final personal income tax returns

Months 18-48

• Request closing letters from the IRS and, if necessary, respond to audit inquiries from IRS and state taxing authorities
• Pay the estate’s remaining expenses
• Prepare and file the estate’s final accounting
• Distribute any reserves that were held by the estate pending resolution of contingencies and make final distributions to heirs

Each estate is unique

Just like families, all estates are different. The size of the estate does not necessarily determine its complexity. Smaller estate can sometimes be the most complicated. We have settled estates across the country, from Maine to California, and many of these estates have holdings outside the US.

Our estate-settlement team is also well-qualified to manage unique assets that require special skills. For example, we have extensive experience managing world class art collections, “trophy” commercial and residential properties, sports and Hollywood memorabilia, and income from royalties and residuals.

Regardless of the size, location or complexity, settling an estate requires a range of skills and carries a long list of responsibilities and legal liabilities. It also requires a significant commitment of time and energy.