What Does it Take to Settle an Estate? The Requirements May Surprise You

01.26.2021 - Brian Conboy, Director of Estate Administration, Trust Counsel

Settling an estate can be a complicated and time-consuming process. In this Q&A, Director of Estate Administration Brian Conboy answers the most frequently asked questions about the estate-settlement process, how it works, and what it takes to ensure a smooth transition of wealth.

Q: What can my family expect from the trustee or executor who will settle my estate?

BRIAN: As your executor or trustee, we 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.

Q: How long does it take to settle an estate?

BRIAN: Many people are surprised to learn that it can sometimes take up to three to four years to settle an estate (see the estate-settlement timeline below). Our team is with your family every step of the way. Our primary responsibility is to preserve your legacy and ensure the safe transition of your wealth. We serve as a bridge between generations—settling estates for clients who often have been working with Fiduciary Trust for decades. We also help educate the next generation to become responsible stewards of wealth and build your family’s legacy.

Q: Can a family member share these responsibilities with a professional trustee or executor?

BRIAN: Yes. We can share these roles with a co-executor and/or co-trustee of your choice. All settlement decisions are made jointly, but we handle most of the administrative tasks.  

In other relationships, we provide support services and guidance as an agent to the executor or trustee who is usually a family member, friend, attorney, accountant or financial advisor. The responsibilities of an executor or trustee can be overwhelming for some individuals. So, our team offers professional resources, expert advice, and administrative services to assist in the performance of their duties.

Most often, we are directly named as executor, trustee, or both, in wills and trust documents. In this capacity, Fiduciary Trust is in the driver’s seat, with full discretion to make decisions on your behalf and execute on those decisions.

Q: If Fiduciary Trust settles my estate, what types of professionals would be involved?

BRIAN: Our full-service estate settlement team includes officers, associates and administrative professionals. We are lawyers, aspiring lawyers, paralegals, and support professionals. Each team member has dedicated his or her professional career to trust and estate work.

In most cases, one officer and one associate settle an estate. But we support the largest and most complex estates with three or four team members. Typically, the 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.

Unlike other trust companies, our team members do not double as trust officers, investment professionals or tax preparers. We focus exclusively on helping families navigate the complexities of settling an estate during a particularly emotional time in their lives.

Q: Would my other advisors also be involved in the process?

BRIAN: This is an important element of our approach to settling estates. We work hand in hand with outside advisors to carry out your wishes. We also take a hands-approach to everything we do, whether we are engaged in complex tax planning or personally sorting through a storage unit to take inventory of property. The team also has close relationships with prominent real estate brokerage firms, auction houses, appraisers, and other estate-planning professionals in the US and overseas. So, team members know who to call if they need specialized services or guidance to manage unique assets.

Q: Is my estate large and complex enough to require a professional trustee or executor?

BRIAN: The estates we settle are typically valued between $3 million to $500 million. But the size of the estate doesn’t necessarily determine its complexity. Some of the most complex estates we settle are on the small end of the scale. The team has settled estates across the country, from Maine to California, and many of these estates had 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.

Q: How can I make this process as easy as possible for my family?

BRIAN: Every estate is unique and each brings new challenges. Whether you have assets that are difficult to value or sell, complicated family dynamics, or multi-jurisdictional international issues, our team does not avoid difficult situations. Team members have the experience and skills needed to navigate issues that may arise.

But no matter the characteristics of your estate, the process of settling an estate can be stressful, placing strain on your beneficiaries and family relationships. Our goal is to minimize that stress by providing your beneficiaries with a clear process and encouraging open communication and transparency.  We are an impartial voice in the room providing direction, addressing concerns and, when necessary, addressing conflicts that may arise. 

And our advice is not limited to estate matters. We solicit feedback from beneficiaries so we can understand their concerns. For example, when a beneficiary needs investment management advice, financial or tax planning guidance, or an estate plan of their own, the team brings in colleagues from other areas of our firm to offer Fiduciary Trust’s best thinking.

Want to Know More?

If you’d like to learn more about our estate-settlement team and how we can simplify the transfer of assets from your estate, please contact your Fiduciary Trust representative or call us at (877) 384-1111. 

Estate-Settlement Timeline

Settling an estate requires a broad range of skills and carries a long list of responsibilities and legal liabilities. It also requires a significant commitment of time and energy. This timeline offers a general idea of what the process entails.

Months 1-3

  • Review the will, pay the decedent’s final expenses, 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 documents
  • Appraise and insure valuable estate assets
  • Cancel personal accounts such as memberships and subscriptions

Months 3-6

  • Transfer retirement, brokerage and savings accounts, as well as financial interests in partnerships or other businesses, into the estate’s account
  • If cash is needed to pay estate taxes, cash bequests or expenses, decide which assets to sell
  • Send the probate court a detailed inventory of all property, accounts and debts

Months 6-9

  • Distribute personal property as directed by the will or trust document
  • 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 claims from creditors
  • Locate all assets and secure their "date of death” values
  • Prepare and file a federal estate tax return and pay outstanding state and federal estate taxes
  • Provide the IRS and beneficiaries with basis information for the property they inherited
  • If necessary, file a generation-skipping transfer (GST) tax return
  • Secure an extension of time to file the state and federal estate tax returns if information to file return is not complete.

Months 9-12

  • Make partial distributions of estate assets to heirs
  • Maintain reserves 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 income tax returns

Months 18-36

  • 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
  • File a petition to discharge the executor’s responsibilities

This communication is intended solely to provide general information. The information and opinions stated may change without notice. The information and opinions do not represent a complete analysis of every material fact. Statements of fact have been obtained from sources deemed reliable, but no representation is made as to their completeness or accuracy. The opinions expressed are not intended as individual investment, tax or estate planning advice or as a recommendation of any particular security, strategy or investment product. Please consult your personal advisor to determine whether this information may be appropriate for you. This information is provided solely for insight into our general management philosophy and process. Historical performance does not guarantee future results and results may differ over future time periods.

IRS Circular 230 Notice: Pursuant to relevant U.S. Treasury regulations, we inform you that any tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. You should seek advice based on your particular circumstances from your tax advisor.

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