First Steps in Settling an Estate

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Settling an estate can be a difficult task, especially for those grieving. The State of California has laid down laws on settling an estate. These laws are intended to ensure that the property is safe during the estate administration and it is distributed to those who are entitled to receive it. The first thing that needs to be done is determine who is the executor or trustee. If there is a will, the executor or trustee will be named in the will. In case there is no will, the court will appoint the executor or trustee. The executor or the trustee has the responsibility of settling the estate.

Locating Legal Heirs and Assets

Settling an estate involves the task of distributing the assets of the deceased to the legal heirs and beneficiaries. To do this, the assets and properties of the deceased should be located. Next the legal heirs and beneficiaries should be located and identified.

Debts, Bills, Taxes

Before the assets of the deceased can be distributed, the debts and liabilities of the deceased must paid out from the estate. California has long abolished the estate tax. However the estate may be subject to the federal estate tax. In any given year, there is an applicable federal estate tax exemption.

Besides the federal estate tax, the estate may attract other taxes such as capital gains tax. Some of the assets may attract capital gains tax if there is an appreciation in the value of the assets between the date of death and the date of sale.

Income tax returns must be filed for the first part of last year of the deceased’s life through the date of death. A fiduciary tax return must be filed for the second part of the year based on the income earned by the estate.

The medical expenses incurred by the deceased as well as the funeral expenses along with all other debts. The executor must identify the legitimate debts and pay them from the accounts of the deceased.


The executor or trustee has to determine if probate is necessary. Generally all wills must pass through probate. Under California law, small estates need not be probated. Small estates are estates that are $150,000 or less in value. The executor can transfer the estate to the beneficiaries without obtaining an order from a court of law. However to use this procedure to transfer real property to the beneficiaries, the value of the real property must be $50,000 or less. Most people prefer to use trusts to overcome the probate requirements. However under California law, the beneficiaries of a trust and the legal heirs of the deceased must be given a notice informing them about the trust and they have four months (in some cases, six months) to challenge the trust. This period is sometimes referred to as the contest period and the estate cannot be distributed during this period.

Seek Legal Help

Settling an estate is a complex task. You must comply with the applicable federal and California laws. Seek the assistance of an experienced attorney.


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