Settling an Estate: What Do I Need to Know?
MT201004HR
Revised December 2023
This MontGuide is designed to help survivors start the process of settling an estate and ease the burden following the death of a loved one. It discusses tasks in the order they are commonly completed. The order presented is not necessarily the correct order for every estate because each estate is different.
John, a single father of three, had a heart attack and died at the age of 68. His
children were shocked by John’s passing. A couple of days after John’s death the funeral
director made a comment to John’s daughter about seeing John riding his horse each
morning. John’s daughter quickly realized with all the tasks that had consumed her
time she hadn’t checked on John’s horse in days. She immediately went to the pasture
and was dismayed to see that the tank was out of water. The horse survived but John’s
daughter felt terrible and wondered if she was forgetting other important tasks.
MOST OF US ARE NOT EXPERTS AT WHAT NEEDS TO BE DONE after a loved one passes away. However, at some point in our lives many of us will
find ourselves faced with settling an estate for a family member or friend. Many people
think that if the deceased left a will or a trust then the process for settling their
estate will be simple and easy. But often overlooked in legal documents are the many
decisions that need to be made in the first few days after a death and also many of
the minor tasks (such as canceling magazine subscriptions and forwarding mail) that
may need to be completed.
This MontGuide is designed to help survivors start the process of settling an estate
and ease the burden following the death of a loved one. Some tasks are time sensitive,
such as ensuring that a pet is cared for in the days following a pet owner’s death.
Other tasks, such as distributing the deceased’s IRA, are less urgent. This MontGuide
discusses tasks in the order they are commonly completed. The order presented is not
necessarily the correct order for every estate because each estate is different.
The First Few Days
The first few days after the death of a loved one should be devoted to tasks that
are time sensitive. The first task is to arrange for the care of the survivor’s children,
spouse, pets and livestock. These arrangements do not have to be permanent but temporary
care may be needed immediately.
After the survivors’ immediate needs have been met, then someone will need to search
for any final instructions left by the decedent. Did the deceased leave a letter of
last instructions, a will, a funeral or burial contract, funeral or memorial instructions?
For further information read MSU Extension MontGuide Letter of Last Instructions (MT198904HR).
These documents are commonly stored in a safe deposit box, in a ‘special’ place in
the home or with a friend or relative. The attorney or funeral director that helped
draft these documents may also have copies. Although these documents often contain
information about many issues, only the information relevant to the memorial service,
funeral arrangements, and other immediate concerns are important during the first
few days.
If final instructions cannot be found, surviving family members are faced with making
arrangements for the memorial service or funeral and burial based on their best judgment
of what the deceased would have wanted.
Below is a list of tasks that may need to be completed in the first days following
the death of family members.
- Children: Are there children that need to be cared for?
- Spouse: Is there an incapacitated spouse (Alzheimer’s, dementia, etc.) who needs care?
- Other Dependants: Are there other dependants who now need immediate care?
- Pets and Livestock: Was the deceased responsible for caring for any animals?
- Final Instructions: Did the deceased leave a will, trust, funeral or burial contract, letter of last instruction? If yes, where are these documents located?
- Memorial Service and Burial Plans: Did the deceased leave any memorial service plans, a funeral trust or a funeral insurance contract?
- Death Notification: Are there out-of-town friends or relatives that should be notified so they can attend services? What newspapers should print the obituary?
Definitions
Beneficiary: A person (or legal entity) who is entitled to the benefit of a trust, proceeds of
retirement funds, insurance policy, payable on death account or transfer on death
registration upon the owner’s death.
Devisee: A person or entity designated in the deceased’s will to receive property passing
under the will.
Estate: A term used to describe all of a person’s possessions. An estate includes both probate
and non-probate assets (real estate, personal property, financial accounts, etc.)
and debts (credit cards, loans, phone bill, etc.) owed to others.
Estate Administration: The process, including probate, of the personal representative gathering all the
property of someone who died, paying all just debts and taxes, and distributing the
balance to the devisees designated in the will or the heirs as prescribed by the legislature
where there is no will or if the will is declared invalid by the district court.
Personal Representative: A person nominated in a will and then appointed by the district court to administer
the estate of a deceased person. Personal representatives were formerly referred to
as executors or administrators.
Probate: A judicial proceeding to determine if the deceased had a valid legal will, to appoint
a personal representative to administer the estate, and to determine the creditors,
devisees, or heirs who are entitled to the deceased’s property.
After the Funeral
The process of settling the deceased’s estate can proceed after the immediate needs
of the survivors have been met and after the funeral. State and federal laws play
an important role in what needs to be done to legally settle an estate. These rules
and regulations not only determine the steps and paperwork required, but also who
is responsible for the variety of tasks that need to be accomplished.
Who is responsible for settling an estate?
When an individual dies, with or without a will, Montana law provides legal procedures
for settling the estate. If probate is required, the process takes place under jurisdiction
of the district court in the county where the deceased was considered a resident.
Probate may not be required, however, if all of the deceased’s property was owned
as a joint tenant with right of survivorship with another person, in a revocable living
trust, or designated to pass to survivors according to some non-probate transfer mechanism
such as a payable-on-death designation (POD), a transfer on death registration (TOD),
a transfer on death deed, or a life insurance beneficiary designation. For more information
refer to the MSU Extension MontGuide, Probate in Montana (MT199006HR).
If probate is required, the personal representative is responsible for most estate
settlement tasks. The personal representative is often a family member or friend but
can be an employee of a bank or other corporate entity. Typically, a personal representative
is nominated in a will and appointed by the district court. If no personal representative
was nominated in a will or if a person died without a valid will, then the district
court will appoint one based on the priority list provided by Montana law. For more
information refer to the MSU Extension MontGuide Personal Representative Responsibilities. (MT199008HR).
After the Second Week and Beyond
After one or two weeks have passed the personal representative should arrange for
the deceased’s mail to be forwarded and start gathering information and notifying
people (and companies) that did business with the deceased. A person who planned ahead
and communicated information to family members makes the process much easier for the
survivors. Important papers should be located, such as:
- Birth Certificate (for the deceased and any minor children)
- Marriage Certificate (if applicable)
- Divorce Decrees (if applicable)
- Death Certificate(s) (multiple copies should be obtained, 6 or more is common)
- Social Security Card (or number)
- Military Discharge Papers
- Union or Professional Membership Information
- Will or Trust Document
- Copy of Recent State and Federal Income Tax Returns
- List of Business Contacts:
- Certified Public Accountant
- Attorney
- Investment Advisor
- Current and Past Employers
- List of Accounts and Assets (and contact information for each):
- Checking and Savings Accounts
- Credit Card Accounts
- Investment Accounts
- Loan Accounts
- Retirement Accounts
- Insurance Policies (Auto, Home, Health, Disability, Life, and Long-Term Care)
- Stock or Bond Certificates
- Certificates of Deposit
- U.S. Savings Bonds
- Cooperatives that pay dividends (rural electric, phone, etc.)
- Real Estate
- Vehicles
- Personal Assets (art, coins, major household items, jewelry)
- Other Important Items:
- Utility Company Accounts (phone, cable, power, gas, water, sewer, garbage, internet)
- Periodical Subscriptions (magazines, newspapers)
- Safe Deposit Box (location and contents)
Estate Overview
Compiling this information creates an overview of the estate’s assets and liabilities,
size and complexity. The personal representative can then identify tasks by categories:
those the personal representative is capable of handling and those requiring professional
assistance (a certified public accountant, attorney or others).
After the various tasks have been assigned, appropriate financial institutions should
be notified of the death. In many cases they can provide information about the necessary
steps to freeze, transfer, re-title or close the deceased’s accounts including whether
a probate will be necessary to transfer the property.
Additional information about this process can be found in the MSU Extension MontGuide
Accessing a Deceased Person’s Financial Accounts (MT200301HR). Insurance companies can provide information about the process of claiming benefits
beneficiaries are entitled to receive.
Employers, professional organizations and business partners should be informed of
the deceased’s passing. The deceased may be entitled to a final paycheck, payment
for unused sick leave and vacation time or insurance benefits provided by the employer,
union or other professional organization.
Current and past employers may also be able to provide information about survivor
plan benefits that may be due to the deceased’s survivors. Business partners (who
may not be aware) should be informed of the death.
The Social Security Administration (SSA) should be notified because payments to the
deceased recipient will need to be stopped and a determination of what benefits survivors
are entitled to receive must be completed. For more information about the Social Security
benefits visit www.ssa.gov.
The personal representative will need to determine the tax status of the estate (this
may involve an attorney or certified public accountant) during the settlement process.
There are no Montana state inheritance or estate taxes. No federal estate taxes are
due if the estate’s value is less than the applicable threshold ($13.61 million in
2024, after that date increased yearly by the Consumer Price Index).
The personal representative will need to determine the tax status of the estate (this
may involve an attorney or certified public accountant) during the settlement process.
There are no Montana state inheritance or estate taxes. No federal estate taxes are
due if the estate’s value is less than the applicable threshold ($13.61 million in
2024, after that date increased yearly by the Consumer Price Index.).
The personal representative also needs to distribute the estate’s assets to the beneficiaries
named in the will, Payable on Death (POD) or Transfer on Death (TOD) accounts. If
no beneficiaries are named, then Montana law determines who receives the deceased’s
assets. For more information refer to the MSU Extension MontGuide Dying Without a
Will in Montana (MT198908HR). An interactive website illustrating how a deceased person’s
estate is distributed when a Montanan passes away without a will is at www.montana.edu/dyingwithoutawill.
Summary
The process of settling an estate can be a time consuming and complex process. Planning
and communication by the deceased before death can simplify the process for the survivors,
but even if little or no planning has taken place someone must take action to assure
that the deceased’s assets are distributed appropriately. Some estates will take relatively
little work to settle while others will require considerable time and effort.
Listed below are other resources that may be useful during the process of settling
an estate or creating an estate plan. A checklist of estate settlement tasks is also
provided here.
Resources
- Social Security Administration, www.ssa.gov
- Veterans Administration, www.vba.va.gov/VBA
MSU Extension Publications
MSU Extension has an Estate Planning website that provides current information about
estate planning for Montanans who are interested in learning by attending webinars
or inperson workshops, viewing MSU Extension MontGuides and other bulletins, and other
information at
https://www.montana.edu/estateplanning.
Completed
|
First Week
|
---|---|
|
Have temporary arrangements been made for children and other dependents?
|
|
Have temporary arrangements been made for pets and livestock?
|
|
Have funeral plans been taken care of?
|
Completed | After the First Week |
---|---|
Is a probate proceeding necessary? | |
Has a personal representative been appointed? | |
Have important papers been gathered? (see list on page 2 and 3) | |
Has mail been forwarded to the Personal Representative? | |
Has a list of assets and accounts been completed? (see list on page 3) | |
Has a list of business relations been completed? (see list on page 3) | |
Have employers, business relations, utility companies, credit card companies, and others been notified? | |
Have accounts been closed, retitled, or frozen? | |
Have final checks and other benefits been collected? | |
Have insurance policies been claimed and or cancelled? | |
Does a final income tax return need to be filed for the person or estate? | |
Are federal estate taxes due? | |
Have assets been distributed as indicated in contractual arrangements, the will, or Montana laws? |
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