Throughout my career, I've helped many clients and their families navigate the steps they need to take when a loved one passes away. Whether it's a parent who passed unexpectedly, a spouse after a long illness, or a sibling coordinating from across the country, each situation has reminded me why having clear guidance during an overwhelming time matters so much.
Last month, I sat with a client whose father had passed away six weeks earlier. She was holding a folder full of documents, feeling completely lost about where to start. "I know I need to do something with his accounts," she said, "but I don't even know what questions to ask."
Another client recently called me surrounded by decades of paperwork from a parent's home, trying to figure out which documents actually mattered and which ones could be discarded.
I've also worked with someone who spent over a year settling a family member's estate. The person they'd named as trustee made perfect sense when the documents were drafted decades ago. But by the time that person actually stepped into the role, they had aged significantly, and the process became far more overwhelming than anyone anticipated.
Estate plans aren't set-it-and-forget-it documents. As you and the people you've named in key roles get older, it's worth revisiting those choices to make sure the responsibility won't become a burden during an already difficult time.
These conversations happen more often than you might think. And what strikes me every time is how similar the questions are and how much easier the process becomes when you know what to expect.
So I wanted to put together a practical guide. Not the legal jargon you'd find in a trust document, but the real steps families face when settling an estate and what you should know about each one.
Estate settlement is the legal and financial process of wrapping up someone's affairs after they pass away. The complexity and timeline depend on several factors: whether they had a trust or just a will, the types of assets involved, family dynamics, and state-specific requirements.
Most estate settlements take anywhere from 6 months to 2 years. That might sound like a long time, but there's a reason for it. This process involves coordinating with multiple institutions, waiting periods required by law, and careful attention to both legal and tax requirements.
First: Give Yourself Permission to Grieve
This is an emotionally challenging time and it's absolutely okay to take the time you need to grieve. When you're ready to proceed with the estate settlement, take it in digestible chunks. You don't have to do everything at once.
If there's a trust in place, one of your first calls should be to the estate attorney to walk through the process of transitioning from a revocable trust to an irrevocable trust and obtaining a Tax Identification Number (TIN) for the estate. Let's walk through the key steps.
Obtain Multiple Copies of the Death Certificate
You'll need certified copies, usually 10-15 of them. Every financial institution, insurance company, and government agency will want to see one, either a physical original or scanned copy. Your funeral director, county vital records office, or attorney should be able to help you order these. Important note: Even with properly set up trusts and documentation, the estate settlement process typically takes 6-12 months from start to finish.
Locate Essential Documents
You're looking for:
One client recently discovered her father had accounts at six different financial institutions because 'that was how you did it back then.' Finding everything and dealing with each company took months. This is why keeping a master list of accounts and updating it regularly is such a gift to your family. This is also one of the primary reasons why consolidation can make so much sense. Download our Personal Estate Information Organizer to build your own master list before your family needs it.
Notify Key Parties
Important: If Social Security or pension deposits are made after the date of death, they will be pulled back out by those agencies. This is normal and expected, so don't be alarmed when you see these reversals. It is important to be aware of, however, so you don’t inadvertently find yourself with a negative balance.
Secure Property and Assets
Change locks if necessary, forward mail, cancel subscriptions, and make sure property insurance remains in force. I've seen situations where homeowner's insurance lapsed during an estate settlement, creating unnecessary risk.
A living trust is composed of three key parties: the grantors (who create the trust), the trustees (who manage it), and the beneficiaries (who receive assets). The grantors are typically the initial trustees. For example, a husband and wife are both grantors of their living trust while they're alive.
When the first spouse passes away: You do not need to apply for a TIN. Everything needs to be switched over to ensure it's under the surviving spouse's Social Security number. This often involves opening a new account under the surviving spouse's Social Security number and moving the existing funds into the new trust account. During this transition, ensure a step-up in basis occurs for the assets.
When the second spouse (or sole grantor) passes away: This is when you need to apply for the Tax Identification Number (TIN) to convert the trust from revocable to irrevocable.
Work with an Estate Attorney
Whether you need an estate attorney depends on the complexity of the situation. If you have a well-drafted trust and straightforward assets, your first call should be to the attorney that drafted the trust to help with the initial steps. You may then be able to handle much of the process with guidance from your financial advisor. In complex situations, having legal guidance can help you avoid costly mistakes. An estate attorney can be invaluable for:
The cost of an attorney is typically paid from estate assets, which should hopefully reduce concerns regarding financial responsibility for you.
Apply for Tax Identification Number (TIN)
Assuming your loved one established a living trust, you'll need a TIN (also called an EIN) from the IRS. This converts the trust from a revocable trust to an irrevocable trust, which is a required step. This allows you to open appropriate accounts and file estate tax returns. Many attorneys will help facilitate this, or you can apply online at IRS.gov. It takes about 10 minutes.
Open a Bank Account Under the Trust with the EIN/TIN
This becomes the hub for all estate transactions. Deposit checks made out to the trust or estate, pay bills, and distribute cash to beneficiaries. Keeping everything in one account creates a clear paper trail and makes the accounting much simpler.
Investment Accounts Owned by the Trust
Notify your advisor who can help you convert the revocable trust account to an irrevocable trust. During this process, the assets within the trust should receive a step up in basis. Link this account to the bank account so you can move cash between the two. This account can ultimately distribute the investments to the beneficiaries.
Notify Creditors and Pay Debts
Most states require you to notify known creditors and publish a notice in the local newspaper for unknown creditors. Creditors typically have 3-4 months to make claims against the estate.
Debts are paid in a specific order of priority (secured debts first, then funeral expenses, then other obligations). An estate attorney will guide you through this.
File for Life Insurance and Retirement Benefits
Life insurance proceeds typically pass directly to named beneficiaries and aren't part of the probate estate. But someone still needs to file the claim. Same with retirement accounts. They pass by beneficiary designation, but the beneficiary needs to contact the custodian to claim them.
I recently worked with a family who discovered that their father's 401(k) beneficiary designation was outdated. It still listed his ex-wife from 15 years ago instead of his current spouse. This created a painful legal dispute that could have been avoided with a simple beneficiary update.
Value Assets
You'll need to determine the fair market value of all non-qualified (or non-retirement) accounts and assets as of the date of death. The value as of the date of death becomes the "stepped-up basis" for tax purposes. For real estate, this usually means getting a formal appraisal or a signed letter from a real estate agent stating the value on their letterhead. For investment accounts, you'll use the value on the date of death.
The stepped-up basis can significantly reduce capital gains taxes when beneficiaries eventually sell inherited assets. Getting these valuations right matters.
Distribute Assets to Beneficiaries
Once debts are paid, you can begin distributing assets according to the will or trust. This often happens in stages, sometimes an initial partial distribution while keeping a reserve for any unexpected claims or tax adjustments.
Get receipts or signed acknowledgments from beneficiaries. This protects you as the executor or trustee.
File the Final Income Tax Return
The deceased's final Form 1040 covers January 1 through the date of death. If they were married, this might be a joint return with the surviving spouse.
File Trust or Estate Income Tax Returns (if needed)
If the estate generates more than $600 in income during the settlement process (from investment accounts, rental property, etc.), you'll need to file Form 1041. This is separate from the deceased's personal return and is filed under the EIN/TIN you previously created.
File Trust or Estate Tax Return (if needed)
For 2026, the federal estate tax exemption is $15 million per person. Most estates don't owe federal estate tax, but you may still need to file Form 706 if the estate exceeds the exemption amount or if you want to preserve the unused exemption for a surviving spouse (called "portability").
Some states have their own estate or inheritance taxes with lower thresholds. This is where state-specific guidance becomes important.
Family Dynamics
ven in the closest families, estate settlements can create tension. Someone feels the division wasn't fair. Siblings disagree about whether to sell the family home. Emotions are running high and old resentments can resurface.
My advice: Communicate early and often. Share information with all beneficiaries. Consider hiring a neutral third party (you can hire a fiduciary who specializes in settling estates) to facilitate difficult conversations if needed. Document, document, document.
The Emotional Toll
You're grieving while simultaneously managing a complex administrative process. Going through a loved one's belongings, closing accounts, selling property. Each step can feel like saying goodbye again.
Give yourself grace. This takes longer than you think it should, and that's okay. If you're the executor or trustee, consider asking other family members to help with specific tasks so you're not carrying everything alone.
Hidden Assets and Surprises
I once worked with a client who discovered her father had a small pension from a company he'd worked for 40 years earlier. Another found savings bonds tucked in a dresser drawer. Sometimes there are assets nobody knew about.
This is why a thorough search matters. Check old tax returns for clues about accounts or income sources. Contact former employers about pension benefits.
Search State Unclaimed Property Databases
One often overlooked step is to search state unclaimed property databases. I have had clients who have identified thousands of dollars in unclaimed assets this way.
Digital Assets
This is increasingly complex. Email accounts, social media profiles, photo storage, cryptocurrency, online banking. All of these need to be addressed. Without passwords or recovery information, accessing these accounts can be challenging.
After helping families through this process repeatedly, here's what matters most for your own estate planning:
Create a master document with all your accounts, approximate balances, beneficiary designations, and contact information. Update it annually. Tell your executor or successor trustee where to find it. I've created a simple checklist and master document template that you can use to organize your own information. Download them here: Personal Estate Information Organizer and Estate Settlement Checklist.
Review beneficiary designations on retirement accounts and life insurance every few years, especially after major life events like marriage, divorce, births, or deaths.
Before someone passes, consider a revocable living trust if you own real estate or to avoid probate. The cost is typically a fraction of your estate but can save your family significant time and money.
Have the conversation with your family about your wishes. Who will serve as executor? Where are important documents? What are your priorities for distributing assets? These discussions are uncomfortable but invaluable.
Keep good records and organize financial documents. Your family will thank you.
Estate settlement isn't something you need to do alone. The right team typically includes:
The cost of professional help is usually paid from estate assets and is almost always worthwhile. Mistakes in estate settlement can be expensive and difficult to fix.
As your financial planner, I can help you think through how your investment accounts should be titled, what beneficiaries should consider doing with inherited assets, and how the pieces fit together from a holistic perspective. But you'll still need the legal and tax expertise that specialists provide.
Estate settlement is one of those experiences nobody wants to face but most of us eventually will, either as the person responsible for someone else's estate or by preparing our own affairs so our family doesn't face unnecessary burden.
If you're currently navigating an estate settlement, know that it's normal to feel overwhelmed. Take it one step at a time. Ask for help. And remember that this process, while difficult, is how we honor someone's life and legacy by ensuring their wishes are carried out thoughtfully.
If you're thinking about your own estate plan and want to make sure everything is in order, or if you're helping a family member through this process and have questions about the financial aspects, let's talk. I'm happy to walk through what makes sense for your specific situation.
--
This content is provided for educational purposes only, represents only a summary of topics discussed, does not constitute any personalized investment advice or recommendation, and represents only the views and opinions of the speakers which are subject to change without notice. Investing involves risk including the potential loss of all amounts invested.
This material prepared by Certus Wealth Management, LLC (“Certus Wealth”) is for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Opinions expressed by Certus Wealth are based on economic or market conditions at the time this material was written. Economies and markets fluctuate. Actual economic or market events may turn out differently than anticipated. Facts presented have been obtained from sources believed to be reliable. Certus Wealth, however, cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Certus Wealth does not provide tax or legal advice, and nothing contained in these materials should be taken as tax or legal advice.