Complete Guide to Estate Settlement

What’s Estate Settlement?

Estate settlement is the legal and financial process of managing a person’s affairs after they pass away. It involves collecting the deceased’s assets, paying off any debts and taxes, and distributing what remains to the rightful beneficiaries. If there’s a will, the executor must validate it through probate before carrying out the instructions. If there’s no will, state or provincial laws decide how the estate is handled.

The executor is granted legal authority to act on behalf of the estate. You can learn more in our probate guide. Being named anestate executor comes with many responsibilities such as notifying institutions, managing assets, closing accounts, and filing taxes. In some cases, the estate executor is also a beneficiary, which can add extra legal and emotional complexity.

Checklist for Settling an Estate in 10 steps

Now that you understand what estate settlement means, here’s a simplified breakdown of the steps involved. Each stage requires careful documentation, communication, and decision-making. From authenticating the will to distributing assets, each task plays a vital role in closing the estate legally and efficiently.

Keep in mind that since each state enforces its own estate laws, you’ll find that what to do when someone dies in California varies significantly from the process in other jurisdictions.

1. Obtain proof of death

The very first step in the estate settlement process is to obtain legal proof of the deceased’s passing, most commonly in the form of a certified death certificate. This document is issued by the local vital records office or health department in the state where the death occurred. As the estate executor, you’ll need multiple certified copies, as financial institutions, insurance companies, government agencies (like the SSA and IRS), and probate courts often require an original for verification. Without this official document, you won’t be able to begin probate proceedings, claim life insurance, or access the deceased’s accounts. In short, proof of death is the legal gateway to settle an estate.

2. Validate the will through probate

Validating a will through probate is often the first step in settling an estate in the U.S. Once a person passes away, the named executor typically locates the original will and files it along with a petition to begin probate, with the probate court in the county where the deceased lived. If the court accepts the will as valid, it issues “letters testamentary,” granting the executor legal authority to act on behalf of the estate.

A properly drafted will simplifies the estate settlement process by clearly outlining the deceased’s wishes, including how their assets should be distributed. It can help avoid disputes and delays. If no valid will exists, the estate is distributed according to state intestacy laws.

Some assets (like life insurance, retirement accounts, or jointly held property) may pass outside of probate. And in certain states, small estates may qualify for simplified procedures, potentially avoiding full probate.

3. Notify all parties

Being an estate executor also means being in constant communication with the deceased’s loved ones, family members, and, of course, beneficiaries.

The next step in the estate settlement process is notifying all relevant parties about the death and managing expectations. The estate settlement process can take between 12 - 18 months, maybe more and beneficiaries should be aware of this timeline. Every estate is treated on an individual basis depending on the jurisdiction and complexity of assets, however, ClearEstate can reduce this timeline.

Once all interested parties have been informed of the death, the executor of the estate must notify the relevant governing bodies. This can be done with an official death certificate, which is a crucial document in the early stages of the estate settlement process.

4. Stop regular payments

Once the death has been registered and key parties notified, the executor must ensure that all regular payments are stopped. This includes contacting utility providers, car or phone service companies, and subscription services such as magazines, newspapers, and streaming platforms to prevent unnecessary charges.

If the deceased was receiving government benefits, it’s essential to inform the relevant agencies to discontinue these payments. Failing to do so could result in overpayments that the estate may later need to repay.

You should also notify financial institutions about personal retirement accounts like IRAs, TFSAs, or RRSPs. These accounts typically have named beneficiaries, and early notification helps ensure a smooth transition. Don’t forget to inform banks about the deceased’s chequing or investment accounts, as well as insurers and creditors.

5. Secure personal property

At this stage, the will has been submitted to the probate court and has been validated by the appropriate jurisdiction, giving the executor of the estate the green light to settle the estate.
The next consideration to make, however, is the deceased’s assets. This includes their home, valuables, and possessions such as their car, laptop, phone, and any other important items.

We recommend locking these possessions up at a safe location of the estate executor’s choosing to avoid any potential disputes or drama. This will also guarantee that the assets can be appropriately distributed when the time comes. Managing the deceased’s mail is a key step in settling their estate. It can reveal important accounts, ongoing obligations, or institutions you weren’t aware they were involved with. To ensure nothing gets missed and sensitive information remains protected, it’s best to stop mail for a deceased person or set up mail forwarding through the appropriate service

6. Make funeral arrangements

Funeral arrangements are usually discussed beforehand and in many cases, are clearly outlined in the deceased’s will. Honouring the deceased’s wishes is at the heart of this step and should be treated with great responsibility. If your loved one has already made their own arrangements and picked a specific funeral home, this step will be relatively easy and is simply a matter of coordinating with the funeral directors. If there is no specific plan in place, it is up to the executor of the estate to choose a funeral home and make arrangements accordingly.

Typically, the deceased will have made their wishes clear beforehand, informing their loved ones on whether they wish to be buried or cremated, where the body or ashes will be laid to rest, as well as where they wish to have the memorial service held. If this is not the case, consulting with family members is a smart option, ensuring the deceased’s wishes are well represented.

Funeral arrangements also include planning other important details, including the eulogy, informing friends and distant family members of the memorial, as well as the itinerary. In most cases, funeral arrangements are made within a week of the death of your loved one, but can be extended depending on if there are family members that must travel longer distances.

7. Making an inventory of assets

With the probate process well underway, the next step is determining the value of the estate. This is done by submitting an inventory of all the deceased’s assets, which will then be independently evaluated.

These assets can include, but are not limited

• bank and investment accounts,

• insurance policies,

• real estate holdings,

• safety deposit boxes,

• any personal possessions such as cars, electronics, jewelry, artwork, and heirlooms.

Many of these assets and their appropriate inheritors are usually stipulated in the will. However, in cases where the assets are not mentioned in the will, will pass through the estate and are distributed according to the residuary clause.

This step of the estate settlement process can prove to be an emotionally exhausting one, especially if beneficiaries are applying pressure.

8. Dealing with Taxes

Two things are certain in life: death and taxes. As estate executor, you’re responsible for settling all estate taxes before closing the estate. This begins with filing any outstanding tax returns for the deceased and calculating the tax implications based on the applicable federal estate tax rates and local rules.

If the estate generates income, through investments or rental property, you must also file an estate income tax return for earnings accrued during probate. Additionally, many jurisdictions impose probate taxes or court-filing fees.

In California, courts assess 4% on the first $100,000 of an estate, while Arizona’s Maricopa County charges filing fees between $266 and $320.

These figures demonstrate the variety of tax implications and fees an executor should anticipate. Our estate experts at ClearEstate can help you navigate federal estate tax, provincial probate taxes, and all related filings, ensuring you meet every obligation accurately and efficiently.

9. Close the deceased’s accounts and open an estate account.

Once you are officially appointed executor by the court, notify each institution of the death and provide the death certificate along with your proof of appointment as the estate executor. At the same time, you’ll need to open a dedicated estate account, used to receive any incoming funds (like refunds, or dividends) and to pay off debts, taxes, and other estate-related expenses. It helps ensure a clear financial record and prevents the executor from mixing personal and estate finances, which is essential for transparency and legal compliance. Once all assets are liquidated and debts resolved, this estate account will also be used to distribute inheritances to beneficiaries.

10. Closing the Estate

Once all debts, taxes, and expenses are paid, the executor’s final task is to close the estate by filing a petition with the probate court. The probate court will review this information to ensure the executor fulfilled all duties correctly. Only after the court approves the petition can the executor make final distributions and request to be formally discharged.Managing beneficiary expectations is an important responsibility for estate executors in this step, ensuring they don’t feel left out of the loop.

The executor of the estate may encounter obstacles throughout the estate settlement process and should be ready to clearly communicate these to beneficiaries. Beneficiaries will appreciate the transparency, simplifying the settlement of the estate. This can prove tricky, especially in cases where there are multiple beneficiaries.

What are common challenges in estate settlement?

Common challenges in estate settlement include navigating complex legal requirements, filling out each document, resolving disputes between beneficiaries, and dealing with unclear or outdated wills. Executors often face issues related to the valuation of assets and liabilities, tax filings, and probate delays.

Under common law, determining legitimate claims by interested parties can further complicate matters, especially when the deceased person’s intentions aren’t clearly documented. Other frequent hurdles include locating all assets, communicating effectively with creditors, and managing emotional conflicts among family members. Proper planning and expert guidance can help mitigate these challenges and streamline the process.

Save time and money as an executor

We hope this checklist has helped you to better understand the issues and actions to be taken during an estate administration. As you've just discovered, managing an estate takes a lot of time, organization and communication with the beneficiaries. That's why our estate settlement service is just right for you.

ClearEstate’s mission is to make probate and estate settlement simple, affordable, and transparent, without needing a lawyer. Our online platform gives executors a clear view of the entire process, from initial tasks to final distribution, and helps reduce delays, confusion, and extra costs. Families can track progress in real-time, ensuring everyone stays informed. With expert guidance and a compassionate team supporting you every step of the way, ClearEstate makes settling an estate less overwhelming, so you can focus on healing.

We understand that the estate settlement process can seem daunting, especially while grieving the loss of a loved one. You can always book a free consultation with Clear Estate or visit our blog before embarking on this process to arm yourself with all the knowledge you need to settle the estate efficiently and affordably. Ultimately, we’re here to speed up the process, saving you time, money, and most importantly, offering closure throughout a difficult time for your family.