Eight Steps to Take When Settling an Estate as the Executor

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The loss of a loved one can be an overwhelming experience, and to make matters worse, there are important decisions to be made despite the grief. Having a clearly defined process in place for managing an estate can help avoid the emotional drain of making important decisions. Of course, it is completely natural for emotions to run high when a loved one passes and to have some confusion around what to do and when to do it.

As an executor of an estate, it is all too common to have well-intentioned friends and family members who want to support and care for you offer their opinions and advice. While this can be helpful at times, the downside of acting on this information without a well-thought-out plan can potentially lead to problems and regrets after everything is said and done.

There may be a sense of urgency to settle the estate, but it is important to be mindful of the fact that this is not a process that should be rushed. An executor is acting as a fiduciary, and you are likely working through a lifetime of someone’s financial life.

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With that, you will want to ensure the estate is settled properly, which can be accomplished only with a well-thought-out plan and process to follow.

I often recommend working through this process in steps to help avoid many of the common problems that may surface when attempting to take on too many things too quickly.

Step 1: Set expectations.

Setting some reasonable expectations for yourself and the beneficiaries of the estate is a great first step to minimize the confusion and questions around how long it may take to settle the estate. This process can take anywhere from two months to several years, depending on the type of assets owned and the size and complexities of the estate.

Inevitably, there will be someone in the mix of people you are communicating with who has their own expectations of how long this process takes, and getting out in front of this will save a lot of time and energy.

To help you navigate through the important decisions you need to make, you can hear more about this topic on my Common Sense Financial Podcast.

Step 2: Obtain copies of the death certificate.

One of the first contacts you will have made is to a funeral home to arrange a viewing, cremation, or burial, in accordance with the wishes of the deceased. The funeral home director will often help obtain death certificates. You will need these before any claims are filed, which will most often require originals.

Once submitted, you may not get these back. So, it would be a good idea to request 10 to 12 original documents to have on hand as you work through submitting death claims.

If the funeral home director can't assist you, you can call or email the county clerk or recorder for assistance.

Step 3: Locate estate documents.

Before rushing to check things off your list and quickly make decisions, it is important to locate the deceased’s will, trust or other estate documents they have on file. If none of these exist, you could have difficulty settling a person's estate, which will often require an attorney to assist you through the probate process.

You will want to check to determine if the person left a letter of instructions. A letter of instructions is not a legal document, but it’s a letter that can provide more personal intentions and information regarding an estate.

Step 4: Make a list of financial institutions and life insurance companies.

It is important to begin gathering an itemized list of all known financial institutions where money is held and life insurance companies for filing a claim. It is a good idea to put the list together before jumping into making calls, because you will want to keep track of phone conversations and other instructions.

A good practice is to keep a journal of all of your conversations or use an Excel spreadsheet to keep track of everything. You will want to have a method to help fight the urge to use the backs of envelopes and scraps of paper that can become unmanageable and add to the confusion.

One of the things to think about is that some checks received for the estate may be payable to the deceased and therefore will require a bank account to deposit the money. If you get too far out in front of this process and close accounts, you could find it difficult to cash checks.

You will need to notify the Social Security Administration that a death has occurred, as well as any pension provider, to have payments stopped and any eligible benefits paid to the estate. To do this, you will need their Social Security card/number. If you are uncertain about what to do, consider checking with the Social Security office.

If your loved one served in the military, you may be eligible for veterans’ benefits. You can get more information about these benefits by visiting va.gov.

If they received pension benefits, you would need to contact the provider to inform them of what has happened and receive instructions for filing the claim and learning about any survivor benefits.

Step 6: Gather other documents (bills, credit card statements, deeds, etc.).

Over the next one to three months, you will want to be screening incoming mail (both physical and email) to look for and gather bills, statements and notices relating to various types of accounts and insurance policies. You will want to review credit card statements to identify subscriptions or other recurring charges to follow up with the service providers about cancellation.

Notify creditors and credit card companies that were part of your loved one's credit history. Creditors may want to know when existing debts will be paid, either by you or your loved one's estate. You can notify the big three credit bureaus — Experian, Equifax and TransUnion — of their passing, which can usually be done online, over the phone or by letter.

You will want to locate where they filed important documents to find deeds/titles to real estate, car titles or lease agreements, as well as storage space keys and account records.

Lastly, look for a computer file or printout with digital account passwords. Prior to their loved one’s passing, some family members may try to centralize all this information or state where it can be found. You will want to log in to known social media platforms to disable accounts, if applicable.

Step 7: Contact the employer’s HR and others.

If the person was still working, contact the human resources office at their place of work to inform them of what has happened. The HR officer might need you to fill out some paperwork pertaining to retirement plans, health benefits and compensation for unused vacation time.

If your loved one owned a small business or professional practice, a discussion with business partners (and clients) may be necessary, as well as a consultation with the company attorney who advised that business.

If there is a child in college, contact the financial aid office to inform them of what has happened. Depending on the school and your financial situation, the surviving child may qualify for more assistance.

Step 8: Obtain professional assistance.

There are many opportunities for mistakes when attempting to transfer assets out of the estate. Before rushing into this process, you should consider speaking with their financial adviser and attorney.

If your loved one died without a will, you may need assistance learning how the probate process will work and to what degree you might become liable if your loved one had any outstanding debt obligations.

Investments, retirement plans, brokerage accounts and insurance policies should have beneficiary designations or transfer-on-death instructions.

This is an area where it may be best to work with an experienced financial professional to learn about the possible tax implications of inheriting these assets. A financial professional can help update the financial plan based on available benefits and can discuss changes in the short term while managing any longer-term needs. They can also guide you on state and federal taxes that may be owed before distributing assets out of the estate.

Working through this with the assistance of a professional team of advisers can help minimize the complexities and support you with the responsibilities you have for settling the estate of your loved one.

If you are in need of an experienced team to help guide you through this process, you can request assistance by reaching out to us on our website, SkrobonjaFinancial.com.

Securities offered only by duly registered individuals through Madison Avenue Securities, LLC. (MAS), Member FINRA &SIPC. Advisory services offered only by duly registered individuals through Skrobonja Wealth Management (SWM), a registered investment advisor. Tax services offered only through Skrobonja Tax Consulting. MAS does not offer Build Banking or tax advice. Skrobonja Financial Group, LLC, Skrobonja Wealth Management, LLC, Skrobonja Insurance Services, LLC, Skrobonja Tax Consulting, and Build Banking are not affiliated with MAS.

Skrobonja Wealth Management, LLC is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Skrobonja Wealth Management, LLC and its representatives are properly licensed or exempt from licensure.

The firm is a registered investment adviser with the state of Missouri, and may only transact business with residents of those states, or residents of other states where otherwise legally permitted subject to exemption or exclusion from registration requirements. Registration with the United States Securities and Exchange Commission or any state securities authority does not imply a certain level of skill or training.

Our firm does not offer tax or legal advice. Consult your tax or legal advisor regarding your situation.

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Brian Skrobonja is a Chartered Financial Consultant (ChFC®) and Certified Private Wealth Advisor (CPWA®), as well as an author, blogger, podcaster and speaker. He is the founder and president of a St. Louis, Mo.-based wealth management firm. His goal is to help his audience discover the root of their beliefs about money and challenge them to think differently to reach their goals. Brian is the author of three books, and his Common Sense podcast was named one of the Top 10 podcasts by Forbes. In 2017, 2019, 2020, 2021 and 2022, Brian was awarded Best Wealth Manager. In 2021, he received Best in Business and the Future 50 in 2018 from St. Louis Small Business.