Estate Settlement Checklist
If the worst happens and a loved one passes away during a disaster, you may be involved in the process of settling their estate. Here are the steps to take to ensure that nothing important is missed:
1. Read the will. If possible, read the will, including all amendments (called codicils) and any related trust documents before the funeral or soon afterwards. Check the time limits for submitting a will to probate court as the first step in settling an estate. If there is no will, the court will appoint an administrator to settle the estate and will divide the property among the survivors according to state laws.
2. Hire a lawyer. Unless the estate is very small, working with an experienced probate lawyer will make settling it exponentially less stressful for you. Interview two or three lawyers and find out if the lawyer will charge an hourly fee or expect to be paid a percentage of the value of the estate—do not be afraid to ask how much it will cost.
3. Carry out the duties of the executor, if required. If you are named executor of the will, additional responsibilities await you. A lawyer and/or CPA can help you with these duties, which may include:
- Locating financial and legal documents and providing them to the lawyer or CPA.
- Taking an inventory of the estate’s assets, including any employee benefits.
- Opening an estate checking account to pay bills while the estate is being settled.
- Applying for life insurance proceeds and seeking financial advice on the best way to receive a payout — for example, as a lump sum, an installment payment or an annuity and searching for lost insurance policies.
- Hiring qualified appraisers to place an appropriate value on business interests, real estate and personal property.
- Making sure that any property owned by the deceased person is insured and not at risk of vandalism or theft.
- Paying the deceased’s debts and, if necessary, selling assets to pay debts.
- Working with a CPA or other tax adviser to file the appropriate federal, state and local income, estate and inheritance tax returns.
- Transferring insurance, retirement and other benefits to the appropriate beneficiaries. Seek professional advice on the options available to beneficiaries.
- Renaming beneficiaries on insurance policies, retirement accounts and other accounts as appropriate.
- Changing titles on vehicles and other property according to state laws. Alert the new owners to make sure the property is insured.
- Distributing the remaining assets according to the will, trust or state laws.
4. Give yourself time. As much as possible, refrain from making any immediate decisions that involve large sales, purchases, investments and other major changes. Stock options may need to be exercised within a year of the owner’s death. When well-meaning people start offering advice, respond with a statement such as, “I appreciate your ideas and will take them into consideration when I’m ready to make those decisions.”
For more information, check out our full guide, Disasters and Financial Planning: A Guide for Preparedness and Recovery, created in collaboration with the American Red Cross as a public service by the National Endowment for Financial Education (NEFE).