Winding Up Legal Affairs After a Death

Quick summary

If you're the trustee of a parent's or other family member's estate, it will fall to you to distribute his assets and wrap up his affairs. Depending on the size of the estate, this can be a lengthy process that can take anywhere from six months to two years and involves a lot of work. But think of it as an indication of the person's trust in you: He knew you would handle his estate the way he desired.

When to begin

The process doesn't have to start immediately following a death, says Jennifer H. Friedman, a trusts and estates attorney in Menlo Park, California. Give yourself time to grieve and be with family. "You don't need to run from the funeral home to the attorney's office," says Friedman. "This is an extremely emotional time. Usually, people are overwhelmed when they walk in my office. Hopefully, they'll be less overwhelmed when they leave."

If possible, you'll want to see a trusts and estates attorney within a month of the death. Ideally, this will be the same attorney who drafted the will and established his revocable living trust. "The sooner you get started, the sooner it's over," Friedman says. And she finds that some people like having tasks to do -- it helps them cope with their loss.

Start with the will

The firs t thing to do is get a copy of the deceased's estate plan documents, including the will and trust, if one exists. Often, his attorney will have one, or it will be in his safety deposit box. Then, make an appointment with a trusts and estates attorney in the state in which the deceased resided. His will and other estate plan documents will have been drafted applying that state's laws, and you'll need an attorney licensed in that state to lead you through the process.

In many states, like California, having a will and revocable living trust makes the process of administering the estate much easier, as it can be handled outside the court system. Some older adults, however, particularly those who lived through the Great Depression, are suspicious of trusts, which require them to retitle their assets when placing them in the trust. If that's the case, the estate will have to go through the court system (probate). In California, this applies only if the value of the assets, excluding retirement assets, trust assets, and joint tenancy assets, is greater than $100,000. That means your job as executor of the estate will be overseen by the court. It's a longer, more cumbersome, and more expensive process, and you'll want an attorney to assist you.

Paying the costs

In either case, you'll be able to pay your attorney from the deceased's estate. Most trusts and estates attorneys bill by the hour for this work; expect to pay $200 to $500 an hour. In California, for example, administering a revocable living trust with assets of $2 million or less will probably cost about $5,000 to $8,000, Friedman says. Estates of more than $2 million require a federal estate tax return, which is complicated and will increase the cost.

If the deceased's estate needs to go through probate, many states provide that the attorney is paid on a sliding scale based on the assets in the estate, and then only by court approval. Friedman offers her clients the lesser of her hourly rate or the statutory fee; ask your attorney for the same courtesy. That's not the only cost you'll encounter: In Virginia, for example, the estate is taxed $1.33 for every $1,000 that flows through the probated estate. This tax is paid to the circuit court administering the probate case.

The executor's role

At your initial meeting with the lawyer, she'll explain your role as trustee of the trust or executor of the estate. "That person has a fiduciary responsibility to manage the estate," says Friedman. The attorney, however, will guide you through this process.

Your first homework assignment will likely include getting copies of the deceased's death certificate and a statement of assets and liabilities. This should include a listing of all assets, bank accounts, life insurance policies, annuities, and investments, as well as a list of all outstanding debts. You'll want to start collecting the monthly statements on the deceased's accounts, so you can estimate their value on the date of their death.

If the deceased forgot to place an asset in the trust, your attorney may have to go to court to have it put in the trust.

If the deceased's assets will be distributed outright to heirs, the matter is a relatively simple one. However, if the estate plan calls for the creation of subtrusts (to hold assets for future generations, or control the distribution to beneficiaries), those trusts will need to be drafted and then funded, which means changing the titles on assets. Those trusts will then need to be administered and invested appropriately by you as trustee.

If the gross value of the deceased's estate amounts to more than $2 million, your attorney or CPA will need to file a federal estate tax return. This should be drafted by a professional with experie nce in the area, says Friedman. The tax return and estimated taxes need to be filed within nine months of the death. Even if you file for an extension to file the return, the estimated tax still needs to be paid within the nine-month deadline, Friedman says. While you can obtain an extension to pay the taxes due, the IRS will begin charging interest on any unpaid amounts beginning at the nine-month deadline.

In the next few months, you and your attorney will tally the deceased's debts and liabilities, determine which are legitimate, and pay those accordingly. If the deceased was your parent, you aren't personally responsible for his debts. If his debts exceed his assets, you're not required to pay off the balance.

You and your siblings will now need to make some decisions, though you shouldn't feel rushed into action. For example, it isn't necessary to sell your parent's home now, says Friedman. "Assets don't have to be converted to cash in order to distribute them," she says. The trust can continue to own the home, with any rental income distributed to the heirs. Or, if the trust is to be dissolved, the children may choose to own the home jointly and sell it later, when the market is stronger or when they finally feel able to let go of the family home.

Dealing with complications

During this time, your attorney will also weigh any challenges to the will and estate plan; for example, if an heir disputes how the assets have been allocated. Friedman encourages her clients to settle any such disputes out of court rather than resorting to litigation, which is time-consuming and emotionally taxing and can eat up the disputed assets. "We usually try to mediate the dispute in some way," she says.

Several small items can complicate an estate, and these vary by state. In California, for example, any gift of more than $3,000 to a nonrelated caregiver is automatically deemed void, unless the provision was reviewed and approved by a second attorney at the time the deceased drafted his will. This is designed to protect elderly persons from being manipulated by a caretaker. But the definition of caretaker can be a matter of dispute, Friedman says. It may include unpaid caregivers, such as a neighbor who has given the deceased rides to the store, paid his bills, and helped with issues around the house. If the deceased specified gifts for such individuals, a good trusts and estates attorney will have spotted this at the time he drafted his will and ensured that the will was reviewed by a second attorney or that the gifts were below the threshold for triggering a review.

After disputes have been settled, bequests to charity made, taxes paid, and assets distributed to heirs, the estate remains open. Friedman recommends holding back some amount for any future liabilities that may arise. For example, once you file your federal estate tax return (only required if assets are greater than $2 million), it can take the IRS up to three years to approve the return. Until it's approved, it's wise to hold back money for additional taxes and any professional fees for the attorney and accountant that may be required. Once those matters are concluded, a final distribution can be made from the remaining assets in the trust.

If the estate goes into probate, it will be handled similarly, says Friedman. Once the assets are inventoried and the creditor claim period has passed, your attorney will petition the court for a distribution from the estate. Again, a small amount will be kept in reserve to pay unforeseen expenses until a final distribution is made.

Handling an estate is time-consuming and involves a myriad of menial tasks, Friedman says. "It's a lot of work, but in the end, you are fulfilling the deceased's final wish," she says. That thought should help ease you through some of the minutiae.


about 8 hours ago, said...

A family friend past away three years ago. He lived across the street from my in-laws. My mother in law took care of him in his home for years. She was also his power of attorney. The gentleman had no will or any living relatives. My mother in law still pays to keep up his yard as well as his taxes on his home. My question is... does she have any rights to his house?


about 13 hours ago, said...

My dad past away 2 yrs ago...everything was left to me in right of survivorship, except his home which was deeded to my sister and i the house was sold then there was a question who got my dad's 3rd, i hired an attorney, and my brother was in titled to a 3rd of my dad's 3rd...are my sister and i in titled to a 3rd of his estate? Which is the 3rd of the house in question? Does the attorney's bills get paid out of the estate? We had to open an estate to have me appointed as conservator.. is my brother entitled to full 3rd? I signed my check and a check to thee estate of Ronald J it's held in trust for 2 months...my sister and i do not feel my brother is in title to equal parts, that was not intended to go to him?


4 days ago, said...

My mother recently died . A member of my family will not discuss what exactly my mother left can she keep this from the other siblings . Or does she have to tell them .


about 1 month ago, said...

I'd like to share my experience with dementia of an elderly relative -- in response to the readers here who shared their issues with Alzheimer's and Dementia... Possibly it will be helpful to those with similar problems... A few years ago, I experienced saddening and costly problems with dementia, mainly with my grandfather at 98 years old, whom I had been very close with most of my life until he didn't even recognize me any more... Before my grandfather passed, and afterward, some heirs were not listed in the will, and so were considered missing heirs along with the unclaimed estate assets, or unclaimed inheritance assets. Many inheritance assets, money, bonds, and so on, went missing just because my grandfather was completely ill from dementia, and the lawyers had to step in and enlist the help of a top heir locator service, a probate and estate research firm with super heir search solutions, forensic genealogy experts, and probate researchers. The inheritance recovery, heir locator firm was a very sophisticated probate and estate research company... fortunately as good at identifying and locating missing heirs and beneficiaries to unclaimed estates -- as they were good at finding unclaimed inheritance assets. I had asked the attorneys to make sure the probate research firm could locate missing heirs and beneficiaries quickly. And to make sure the probate researchers had probate research investigation professionals on staff all the time, not just for certain cases. They were also supposed to be good at inheritance recovery, finding missing inheritance assets and funds. I also wanted their forensic genealogists, probate researchers and document specialists to know how to locate missing heirs out of the country, or find unknown heirs who are unaware of their inheritance possibly overseas. I wanted the heir locators and inheritance recovery staff to be able to spot fraudulent inheritance claims (from dishonest relatives!) by connecting legitimate heirs to unclaimed inheritance assets.... as famous organizations like the American Research Bureau, the well known www.arb.com or www.heirfinder.com team in Salt Lake City, Utah are well known for, before my corrupt uncle and cousins could grab any formerly unclaimed inheritance assets they might find out about. It was a nightmare, but the lawyers and probate research investigation pros saved the day.


about 1 month ago, said...

my Mother s estate is in probate and one family member wishes to take his name from the will and not accept anything. he lives in another state. what does he need to sign and send back to us so we can continue on


2 months ago, said...

Simple living trust with assets under 2 million. After distribution should there be a final accounting & formal notification of trust close out?


2 months ago, said...

I have a sister that got a payout of $100,000 it's my understanding it was supposed to be split between me and my other sister and she spend it all she refuses to give us any paperwork or anything and I'm wondering what options I have to make her produce the paperwork or pay me and my sister what she was supposed to


3 months ago, said...

My sister is the executor of my fathers will. She has not told any of us (3 siblings) anything that is in the will. She has not informed us of anything. She went into the safety deposit box and got the contents and we asked what was in it and she said nothing important. How can we find out? She's not asking us if we want his things like watch and other jewelry. We are not aware of anything. I know she is not following the law but I don't know what to do


3 months ago, said...

My mom passed away after battling cancer for 15 years. She told us before she passed,(us as in me and my sister.) that she was leaving us with her half of the property to our childhood home. My father is still alive and owns the other half. But upon my moms passing we were never given a will and never signed anything. I have no experience in this feild but im being told by my uncle jeff that hes getting an attorney but he wont tell us why or anything thats going. My mom also had a safe that my aunt told me she was suppose to give us some valuble coins that mom was passing down. But when i told my aunt o never recieved anything or was told about any coins she said uncle jeff was probably stsaling them cause the key to the safe was suppose to go to me and my sister. He is the trustee so im not sure what im suppose to do at this point it will only be a month as of may 20th and im taking this kinda hard. So im asking for advise as i have no clue and was not informed before moms passing on whats to happen afterwards. Thankyou for your time.


4 months ago, said...

My mother have died on 20th April 2016 they have two brother and one sister already they have died but sister have alive still now my moms mother have 4 kata assestes now how we get this assestes


4 months ago, said...

What if we find out after going through legal channels that there may be a will? We checked everywhere but now we find out there may be a will. Are we out the cremation bill we paid and the bills we paid in general including legal expenses


4 months ago, said...

Closing out my parents estate. Sending checks to my siblings according to the will. Do I just send a check to them or do I need to attach a copy of her assets that was left? I had an attorney to start with, but the attorney passed away before I was completed.


4 months ago, said...

My dad passed away more than 10 years ago and I was the only person named in his will. I am also the executer of his will. He had a small investment fund that I now wish to cash out but I'm told that his will can no longer go to probate. How can I settle his estate and gain access to his investment account he left to me?


4 months ago, said...

My mothers husband passed before their divorce was finalized, there is no Will that we know of, but there is property and finances to distribute, can someone help with what forms we must fill out to the courts here if Florida? Please and thank you in advanced


5 months ago, said...

The Mother of deceased son was the heir of the probate . Then I was named the next in will if she passed away. She has passed before probate was finalized. Can I now inherit the estate or does the estate go to heirs.


5 months ago, said...

Must my siblings and I go to an attorney or can we settle if there is already a will with articles and property assigned to specific members?


5 months ago, said...

My siblings and I have our deceased parents' will. If there are no assets, but a home. If there is one of us appointed executor and there are no outstanding bills and a list of articles to be distributed, must we go through an attorney?


5 months ago, said...

My mother passed 6 months ago. My sister is executor , however, is still grieving. We still have my mothers house and car as if everything is the same before the death. Is this ok or should my sister be moving on in the process?