Beyond The Will, Client Compass

The days and weeks immediately following the passing of a loved one can be extremely stressful and emotional. Arrangements must be made, and paperwork comes flooding in, all while you are coping with the loss and grief. This article will discuss the overall estate administration process and the first steps you should take immediately after someone passes away.

What is estate administration?

Estate administration is the process of distributing a person’s (the “decedent”) assets after they have passed away. It also involves paying off any outstanding debts, including any estate taxes that may be owed to the state and/or federal government. Overall, it can be a lengthy and complicated process, but family members will often hire counsel to assist and guide them through it.

Estate administration usually involves submitting the decedent’s Will to the probate court. The probate court will then evaluate the Will and appoint a Personal Representative (also known as an Executor) for the estate. The Personal Representative oversees the administration of the estate, files estate tax returns, pays off debts, and distributes the assets to the named beneficiaries.

If the decedent does not have a Will, the probate court will appoint a Personal Representative based on who has priority under the law. Generally, priority is given to the surviving spouse, followed by children and other immediate family members.

The law will also determine the beneficiaries of the decedent’s estate if the decedent did not leave a Will. These laws are called the laws of “intestacy.” The beneficiaries will be immediate family members if living and otherwise the closest living relatives, as determined by a genealogical chart.

What should I do first?

The first step in estate administration typically involves creating an inventory of the decedent’s assets. It is important to assess the value of the decedent’s property as close to the date of passing as possible, so monitoring incoming mail and financial statements is often necessary.

Ensuring that the decedent’s property is secure is one of the most crucial first steps. If possible, lock up the primary residence so important high-value items like jewelry do not go missing while the estate administration process is underway.

If the decedent received Social Security payments or other private pension benefits, it is important to call the Social Security Administration and/or pension provider to stop the payments. You should also begin to cancel subscriptions like the phone bill, credit cards, etc., as you see monthly bills come in the mail. You can also report the death to credit bureaus to prevent identity theft.

What paperwork will I need?

Estate administration involves a lot of paperwork, and original copies of many documents are often required. You will need to locate the original copy of the decedent’s Will, if any. This is usually located in a safe, either at home or in the bank, or sometimes the decedent’s estate planning attorney will retain the original copy for safekeeping.

Having a copy (or sometimes multiple copies) of the decedent’s death certificate is also important. An original copy will need to be sent to the probate court with the original Will. An original death certificate will also be needed at any banks or other financial institutions to access the decedent’s accounts.

What taxes will be due?

Two types of taxes can be due after someone passes away: (1) personal income taxes and (2) estate taxes.

Personal income taxes are the same taxes we all file as individuals annually. The Personal Representative is responsible for filing the decedent’s final personal income tax returns with the IRS.

Estate taxes are applied to the estate property before any distributions are made to beneficiaries. There is a federal estate tax, and twelve states also impose estate taxes. Each of the twelve states has individual exemption amounts and levels of taxation.

However, not every estate will have to pay estate taxes, depending on the total value of the decedent’s property. In 2023, the federal exemption amount is $12.92 Million, and the Massachusetts exemption amount is $1 Million. Therefore, if the estate is under $12.92 Million, there will be no federal estate tax due, and if the estate is under $1 Million, then there will be no Massachusetts estate tax due.

Who should I call?

The immediate aftermath when losing a loved one can be a difficult and emotional time. The estate administration process can be difficult to navigate, but the good news is you don’t have to do it alone. It is always best practice to engage an estate administration attorney to assist with every step of the way.