Someone in My Family Has Died…Now What?

If you are the person named in your loved one’s will or trust to take care of her assets and estate you may be wondering where to start and how long it’s going to take to get everything done.  There is a natural order to the work you are now responsible for and the good news is that you are entitled to get the professional help you need, from lawyers, accountants and financial advisors, and the estate will pay for that help.   Getting competent advice early on is key because by accepting the responsibility of managing someone else’s estate you become legally obligated to perform that job right.

First Things First – Take Care of The People

If you were named as executor or trustee of a loved one’s estate you may also be the person responsible for getting the funeral or memorial service planned.  If not, you are still going to want to participate in that important event and may not really be focusing well enough to make decisions about the estate right away.  It’s important that you take some time to feel your loss and you should know that there is no legal reason to rush the estate administration.  Taking a couple of weeks to deal with the emotional issues will not bring the world to an end.  However, don’t delay beyond that necessary time, because some of your duties have time limits attached to them.

Your Job As The Estate’s Administrator

Whether you are now responsible for a smaller estate with few assets or a larger, more complicated estate the work is the same: 1) “Marshal” or locate and identify all of the decedent’s assets; 2) Identify all of the decedent’s creditors and pay the ones with valid claims; 3) File all necessary tax returns and pay any outstanding taxes; 4) Pay any costs incurred while managing the estate; 5) prepare a complete report and accounting of how you managed the assets, with a proposal for how they should be distributed; and finally, 6)distribute the remaining assets to the heirs.  While this list seems pretty straightforward, some of the work can become complicated and you are entirely responsible for any mistakes you make.

Does it matter whether my loved one had a will vs. a trust?

Yes, depending on the kind of final instructions your loved one left, you may be administering her estate in a formal court proceeding called “probate” or you may be able to avoid that requirement.  The determination of which process you must use is directly related to the value of the property owned by the person at the time of her death.  This includes all property (real property, personal property and bank accounts) that were held only in the name of the decedent.   In California, if the total “fair market value” of all personally owned property is greater than $150,000, a formal probate is required.  When you calculate the value of the property you are not allowed to deduct things like mortgages or other liens.  Also, in order to change title to real estate a probate is generally required.

How do I determine ownership of property?

Property is considered to be owned by someone at the time of her death if it is in her name only.  If she owned property jointly with another person, it may be that it became the property of the surviving joint owner automatically, and would not be considered part of the deceased person’s personal estate.  Also, in the case of bank or investment accounts, if the person named a “beneficiary” to receive the funds on her death, those would not be considered her personal property.  Because there are many variables involved in properly determining ownership, it’s best to consult an experienced attorney.

My loved one had a trust – what now?

If the person had a trust and had transferred her property into the trust before her death, that property would not be considered to be owned by her but would instead be owned by the trust.  The analysis doesn’t end there however. The next question is whether the person had any property that she did not get transferred into her trust before she died.  Depending on the answer to that question, a probate may be needed for any non-trust property.

My loved one had a will, but no trust – how does that change things?

As was noted above, if your loved one owned property in her name with a combined value greater than $150,000, or held title to real property, you will need to go through a formal court proceeding.   If her personally owned property has a value of less than $150,000 and doesn’t include real estate, you may be able to administer her estate without probate.  Again, it’s in your best interest to get the assistance of an attorney experienced in this area of law to help you create your game plan.

My loved one never wrote a will or a trust  – what happens now?

When someone dies without writing a will or a trust, their property will be distributed to their next of kin.  This nearly always requires a formal probate, but the good news is that a probate proceeding will provide the structure needed to accomplish the distribution of the estate even when the person left no instructions about who is to receive her property.   If the person has a surviving spouse or children, they will receive her estate but not necessarily in equal shares.  If she did not have a spouse or children, the court will look for her next closest relatives and distribute the assets to them.  After a spouse and children, the person’s parents are next in line.  If she was not survived by her parents, but had brothers or sisters, they would receive her estate.

Next Steps – Notify Everyone

Regardless of whether you have to go to court or can administer the estate without court supervision, one of the first things you should do is notify everyone who is connected to your loved one of her death.   Her  close friends and family will already know of her death, and if she died in a hospital or under medical care those care service providers will also know.  However, you are going to need to go through her personal papers and collect her mail for the next few months to make sure you identify anyone who should also be notified of her death, even if you think they already know.

You need to send a letter (and keep a copy) to each creditor or other person you notify to advise them of the decedent’s death and how they can reach you to make a claim for money the decedent owed them, or to inquire about the administration process.  You should enclose a photocopy of her death certificate with the letter.   Contact the decedent’s bank, insurance agent and investment advisor also.  Do everything in writing and keep copies of your correspondence.   If you are administering a trust, there are other time sensitive notifications you must make and those notifications must contain specific language.

Reasonable Timeframe

Depending on whether the decedent died without a will, had a will or had a trust, the time it will take to administer their estate will vary.  The size of their estate will also play a role in how long it takes to wind things up.  Creditors may start contacting you asking to be paid as soon as they know your loved one has died, but they also know it may take awhile for the estate to be sorted out, final tax returns filed and the final bills paid – feel free to remind them of this fact.  The heirs may start asking about “their share” pretty quickly as well, and need to be told that estate administration can take many months and they should not anticipate receiving anything until you have a chance to sort things out.