How to Settle an Estate After a Death

What to do when dealing with the estate of someone who died

Last updated: 10 November 2016

When a loved one dies, an executor is often named in their will. The executor’s role is to oversee the distribution of their estate.

The estate of a loved one is everything owned by them at the time of death. This can include:

  • Finances, including all cash, bank or building society accounts and any life insurance policies
  • Any money indebted to them
  • Shares
  • Real estate property
  • Personal possessions

In order to settle the estate, the executor must do the following:

1. Obtain letters of administration

If your loved one left a will, you must go through probate. This is the legal process of confirming that the will is valid. Once the court decides a will is valid, the executor – usually named in the will – will be given permission to carry out their duties by distributing the estate. Letters of administration are legal documents authorizing the executor to carry out these duties.

If your loved one did not leave a valid will, this is known as intestacy. During the probate process the court will name an executor, also known as an estate administrator, and will instruct them on how to distribute the estate.

2. Pay bills, dues and taxes owed by the person who died

The executor of the estate must ensure that all outstanding bills and dues are paid out from the estate. This may include medical bills, loans, mortgages and credit cards.

Ongoing bills, such as rent, mortgages and utilities, are known as administrative expenses, and in most cases should be paid by the beneficiaries or executor, even if probate is not yet complete. Bills such as taxes and medical bills may only be payable once probate is complete and the amount can be paid using money from estate.

3. Distribute the estate as per the will

The executor must ensure that the assets of the estate, such as property, money and possessions, is distributed among beneficiaries as the will states.

If there was no valid will, the probate court will decide who receives what. The laws that govern intestacy – when someone dies without a will – can vary from state to state.

4. Close accounts and memberships

As an executor, you will need to close all your loved one’s personal accounts, such as bank accounts, credit cards, memberships, subscriptions and utilities. Depending on the organization, you may need to provide copies of the death certificate and letters of administration to prove you are authorized to manage the estate.