Don't delay in settling the estate of a loved one. Delaying the administrative process of settling a deceased’s financial and legal affairs can lead to unnecessary complications, from higher taxes to lost documents to unreachable beneficiaries.
While we grieve for the loss of a loved one, we should not neglect taking care of the important and time-sensitive matter of settling their estate.
Settling an estate involves obtaining court authority, when needed; distributing the deceased’s assets; settling debts; establishing guardianship of minor children or disabled dependents; and a host of other logistics, depending on circumstances.
Neglecting to settle the estate within a reasonable time can lead to further complications:
- Valuable documents disappear.
- Witnesses to a Will become harder to locate.
- Inaccuracies on the death certificate are not corrected.
- Unclaimed funds are sent to the NY State Comptroller’s office.
- Beneficiaries die and their estates become the new beneficiaries.
Often, an estate isn’t settled in a proper and timely manner because the family didn’t even know there was anything to settle.
This usually happens because of the misconception that only the wealthy have “estates,” but almost everyone has some assets in their name, whether insurance policies, retirement plans, bank accounts, real estate, cars, jewelry and valuables, or stocks and other investments.
Another common reason is that the decedent never discussed their finances, and so the family didn’t know what assets they owned, or what liabilities need to be handled.
The decedent may also have led a different lifestyle than their finances allowed—whether below or above their means—leading the family to make incorrect assumptions about the value of their estate.
HOW TO SETTLE AN ESTATE
The steps for settling an estate will depend on its size and complexity, and whether proper estate planning was done beforehand. But typically, these include:
- Locating the decedent’s original Will and any other estate planning documents.
- Contacting a funeral home (if there are estate planning documents, they may indicate if the funeral has been pre-paid).
- Reviewing assets (without an organized list, the previous year’s income tax returns can help identify assets and liabilities).
- Obtaining copies of the death certificate, and making sure all the information is correct.
- Confirming with a lawyer which assets pass by Will, through the estate, or by operation of law, and whether probate or estate administration in the Surrogate’s Court is necessary.
- Transferring title to any cars and real property.
- Updating homeowners, automobile, and other insurance policies.
- Obtaining an appraisal of any real property, jewelry, collectibles, and artwork for tax or selling purposes.
- Notifying the Social Security Administration of death (sometimes done by the funeral home).
- Notifying retirement administrators of the recipient’s death and inquiring about survivor or death benefits.
- Notifying the credit card companies with whom the decedent had accounts.
- Hiring an accountant to prepare tax returns for the estate.
These steps will not all be applicable to every estate. An estate administration attorney should oversee the process.
“Tending to business” soon after a loved one’s death may feel disrespectful to the decedent or to other grieving members of the family, but in fact it honors their memory by preserving their legacy. Settling an estate should start soon after a person has died.
For any questions or assistance, please contact us.
Helen Tuckman is an associate in Vishnick McGovern Milizio LLP’s Wills, Trusts, and Estates Practice. She can be reached at htuckman@vmmlegal.com and 516.437.4385 x106.
