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How to Settle an Estate

Rahul Thadani Aug 21, 2020
When a person passes away, his/ her estate need to be settled and distributed to their heirs. This is known as settling an estate, and it is a complex legal process that needs a lot of timely attention.
When there is a death in the family, the issue of settling an estate arises. This is complicated and needs a lot of attention to the details, by the person carrying out the settlement. Mostly, it will be someone very close to the deceased, like an immediate relative or a very close friend. It can be a traumatic experience, so one should be careful.

Steps Involved in Settling an Estate

There are 3 steps in settling an estate after death, but one will need a good amount of time and patience for each of these.
  1. Filing a petition to probate the will (if it exists), and then appointing a fiduciary or an executor.
  2. Filing an inventory of the estate.
  3. Submitting a final accounting statement about all the affairs of the estate.
Settlement of the estate is something that should be carried out within a period of 2 years since the date of death of the estate owner.


The probate offices in most states fall under the District Court, and they are very helpful and willing to guide people through the entire process. The petition form (AOC-805) will need to be filled first, and this will ask for all the details of the deceased person.
Settling an estate with and without a will involves different procedures, and an executor will have to be appointed in case a will exists. All details of the deceased person's family and relatives will also have to be submitted.
The form will also require details about the estimated market value of the deceased persons real estate and property, as well as the details of the petitioner and the executor or the fiduciary. Appointing an attorney to help out with this whole process is optional.
Once the petition has been filed, a court date will be set for settling the estate. At the court hearing, a judge will issue an order for probating the last will and testament, and appointing an executor officially. Copies of this order will have to be submitted to the Inheritance Tax section of the states Revenue Cabinet.
The executor is now responsible for carrying out the orders of the will, to find the heirs (in case there is no will), and to pay all necessary charges and fees from the proceeds of the estate.


Within 60 days of the appointment of the executor, the inventory of the estate must be filed. The inventory and appraisal of estate form (AOC-841) will have to be filled out, giving details of the market value of all the assets that were in the name of the deceased person.
This includes all possible assets like bank accounts, stock certificates, certificates of deposits, mutual funds, bonds, retirement accounts, automobiles, life insurance policies, IRAs, flier miles, household items and real estate.
An estate bank account will also need to be created by the executor for settling an estate, and this account will be used to pay off all the debts of the deceased person. All the taxes that are due by the deceased person will also have to be paid off. Needless to say, all these amounts will be paid from the proceeds of the deceased persons assets.
Once all this is done, the assets are distributed according to the will, or according to the intestate plan, if there is no will. The intestacy rules are different for every state. You may have to seek the help of an attorney, so that the correct rules and regulations are followed.


The formal settlement form (AOC-846) will have to be submitted by the executor, giving details of the distribution of all the assets. This form must be submitted after 6 months of the appointment of the executor, and before 2 years of the same.
In case the formal settlement form is not filled, the informal final settlement form (AOC-859) and the affidavit of waiver of formal settlement form (AOC-851) will have to be submitted. The executor must also remember to keep many copies of the death certificate, as this will be required to be submitted in many places.
Settling an estate is a sensitive issue for family members and relatives of a deceased person, but it must be carried out in the right manner, and it should go through the right channels. One must appoint an attorney if he/ she is unsure of carrying out the task on their own.