Navigating estate settlement: Your top questions answered

Charting the course

In the time of loss, estate settlement can seem like another pressing obstacle to navigate. With seemingly complex legal processes, confusing tax implications and a pressing sense of urgency, it can often feel like being at the helm of a ship with no map. However, understanding the course you and your family need to chart can make all the difference.

While having an estate plan prepared and ready to execute is recommended, the ease of administration often comes down to which state you’re located in. Here are some common questions TIAA Wealth Management’s Wealth Planning Strategies team—a group specializing in wealth transfer, estate and tax planning—receives regarding estate settlement and what actions to take after a loved one passes.

Question: What immediate actions should be taken after a loved one passes away?

In the wake of losing a loved one, confusion often mingles with grief, leaving families wondering what steps to take first. Despite what many think, there’s no need to rush into financial decisions or paperwork when someone passes. In fact, estate professionals consistently advise against it. The financial paperwork, bank accounts and legal matters can wait. Most estate decisions can be put on the backburner for several days or even weeks before being addressed. What’s advised in the wake of a loss? Spending time with loved ones, making funeral arrangements and taking the necessary time to grieve.

Question: Who can handle estate settlement, and what are their responsibilities?

When someone passes away, their estate and who’s in charge can vary greatly based on the preparations made. If there’s a will, the person named as executor gets the job. This is best-case, as a will normally outlines how the estate will be handled after death. When there’s no will present, this is called dying “intestate,” and the court appoints an administrator in accordance with state law. While intestate laws generally prioritize surviving spouses or relatives, the outcomes across states vary greatly on how assets are distributed. If you don’t have an estate plan, your state has one for you, and it may not be what you want.

Whether the deceased has a will in place or not, the personal representatives (either the executor or administrator) needs authority from the court for permission to work with financial institutions to handle estate matters. While technically anyone can walk down to the courthouse with the original will and death certificate to be appointed to begin probate, hiring a legal professional is often recommended to assist the personal representative.

Question: What exactly is probate, and why do people want to avoid it?

Probate is a court process granting the estate’s personal representative legal authority to handle assets that don’t automatically transfer by law or beneficiary designation. The process is overseen by a court to ensure the personal representative is fulfilling their duties and estate assets are being distributed in accordance with the will or state laws.

But here’s what most people don’t realize: Not all probate is created equally. The process—and number of headaches experienced while going through it—can vary tremendously state to state. Places like Ohio and Florida have burdensome probate processes with extensive reporting requirements and court fees often leading people to explore alternative estate planning strategies such as revocable living trusts. Other states like Pennsylvania have a fast, easy process that makes avoiding probate less imperative.

Question: What’s the difference between probate and nonprobate assets, and why does it matter?

Upon death, estate assets are divided into two categories: probate and nonprobate. The difference is crucial for several reasons, including determining who the beneficiary is and how quickly they’ll receive their inheritance. For example, nonprobate assets might be available within weeks, while probate assets could take several months or even years to reach their destination.

Furthermore, transfer-on-death designations, such as those often used for investment accounts, can undermine estate planning goals, especially if they’re not aligned with the decedent’s will or trust. Therefore, careful coordination between probate and nonprobate assets is essential to ensure the overall estate plan works as intended. The key difference is that probate assets need court supervision to transfer to new owners, while nonprobate assets transfer automatically because of how they’re titled or through beneficiary designations.

Probate assets include:

• Property owned solely in the deceased’s name
• Assets owned as tenants in common
• Assets without beneficiary designations
• Community property in certain states

Nonprobate assets include:

• Jointly owned property with rights of survivorship
• Retirement accounts and life insurance with named beneficiaries
• Trust-owned property
• Transferable or payable-on-death accounts

Question: What’s the difference between a will and a trust?

A will is a written declaration that directs how your probate assets should be distributed after death. While a will is essential, incorporating a revocable trust (also called a living trust) into your estate plan can further streamline the settlement process and avoid court oversight.

A revocable (or “living”) trust is a legal document that manages property distribution both during your lifetime and after death. It’s active as soon as it’s created and funded. Its key advantages include:

• Bypassing the probate process
• Helping navigate complex family dynamics
• Addressing unique financial considerations
• Easing the burden on loved ones during an emotional time

In addition to the more basic revocable trust, there are also many other types of specialized trusts to address more nuanced and complex wealth transfer and tax planning goals.

Important note: While a trust typically offers benefits that outweigh its higher initial setup costs, it doesn’t eliminate the need for a will, which remains necessary for estate settlement and serves as a backup for any assets not held in the trust.

Question: What are the main phases of estate settlement?

Estate settlement might seem overwhelming, but like a well-structured play, it’s often broken down into three distinct phases. While the timeline varies depending on state laws and estate complexities, knowing these phases helps create a clear roadmap for the process ahead.

Phase one focuses on organizing the estate and securing financial loose ends. This typically involves gathering assets, paying outstanding bills and notifying relevant organizations and agencies like Social Security.

Phase two deals directly with tax obligations. This includes everything from filing final tax returns to making important tax elections for incoming inheritance claims. It’s important to have a trusted tax professional to help lead you through this oftentimes complex process.

The final phase involves distributing the assets according to the deceased’s wishes. This process can be relatively simple or complicated depending on the outlined will or trust instructions. As mentioned earlier, some assets, like life insurance or joint accounts, can transfer quickly, while others might take months or even years to reach their desired beneficiary.

Question: What tax considerations come into play during estate administration?

Unfortunately, tax considerations for estate administration aren’t as simple as filing a W-2 form. Here’s what you need to know: The person handling the estate must deal with several types of tax returns, each with its own deadlines and rules.

First up is the deceased person’s final income tax return, which needs to be filed by April 15 of the year following the person’s death. Then there’s the big one that people worry about—the estate tax return—due nine months after death.

The good news is if the estate being passed down is worth less than $13.99 million (as of 2025), you won't have to worry about federal estate tax. Additionally, transfers to your spouse are typically exempt from estate tax thanks to the unlimited marital deduction. The catch? Any estate value over the threshold that's not being transferred to a spouse is taxed at a steep 40%. Additionally, some states have their own estate taxes—and sometimes inheritance taxes too—which can be complicated and have much lower exemption amounts.

However, there are important tax planning opportunities to consider, especially for estates approaching the federal exemption amount. Working with your TIAA advisor, in coordination with your accountant and attorney, can help identify strategies to minimize the tax impact of your estate plan.

Question: Who’s here to help?

We are. Talk to your TIAA Wealth Management advisor for help with your estate plan. Don’t yet have an advisor? Schedule an appointment. For further resources, visit our estate settlement page.