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Essential Steps of Settling an Estate

When settling a person’s estate, there are several basic issues that must be addressed in order to carry out the decedent’s wishes and to transfer the assets to the appropriate beneficiaries. As fundamental as these issues are, they are often not examined closely, which can cause unnecessary complications and expenses.

  1. Is there a plan?

While it might seem obvious, the first question to ask is whether the decedent died leaving a legally valid estate plan. If the decedent did not leave an estate plan or left a will-based estate plan, then a probate is likely required. If the decedent left a trust-based estate plan, then a probate is unnecessary as long as most of the assets are in fact titled to the trust.

  1. Who is in charge?

If the decedent died without an estate plan, the California Probate Code lists persons who have priority to serve as the “Administrator" of the estate based on their relationships to the decedent. If there are persons of equal priority, they will have to decide who shall handle the task. Such person(s) will petition the Court to be appointed as Administrator. Decedents dying with a will often nominate an “Executor" to handle the estate. The nominated Executor must petition the Court to be officially appointed as Executor in order to assume the powers of the office and to administer the estate. Decedents dying with a trust appoint a Successor Trustee. If the asset is titled to the trust, then the Successor Trustee has immediate control over the trust assets without any need for Court involvement.

In any case, the Administrator, Executor, or Successor Trustee (collectively known as the “fiduciary") have similar responsibilities: they must marshal the assets, pay taxes, creditors, and expenses, and distribute the assets to the beneficiaries.

  1. What are the assets?

It is impossible to settle an estate without having a firm understanding of the decedent’s assets. Some decedents leave detailed lists of assets to make it easier for the fiduciary to handle this task. In any case, the fiduciary should examine the decedent’s records, bank statements, and tax returns for this information. Furthermore, the fiduciary must obtain date of death values for each asset to establish a tax basis and to determine if an estate tax return is legally required.

  1. Who are the beneficiaries?

If there is no formal estate plan, the California Probate code determines the decedent’s heirs. If the decedent died with either a will or a trust, then the will or trust will identify the beneficiaries. The fiduciary should take note of who the beneficiaries are, what they are entitled to receive, and how they are to receive their inheritance. The fiduciary also must give notice to the beneficiaries regarding the administration of the estate and how to contact the fiduciary and his/her attorney.

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