Settling an estate can be a time-consuming and complex process. Navigating the legal, tax, and property considerations involved requires an understanding of applicable laws as well as diligent and timely coordination of key events relevant to each individual’s estate administration process. Our estate settlement professionals have the experience necessary to guide clients and their families through estate settlement with discretion and sensitivity while serving as their advocate throughout.

Commerce Trust responsibilities

When serving as trustee or personal representative/executor of the estate, Commerce Trust will undertake certain duties. Depending on the capacity in which we serve, and the assets held in the estate, customary actions we will take include:

1. Create an inventory of all trust and estate assets. This may include bank accounts, stocks, bonds, certificates of deposit, real estate, closely held business interests, and personal property.

2. Collect and consolidate all trust and estate assets into a trust and/or estate account at Commerce Trust.

3. Change the mailing address of the decedent so that Commerce Trust can collect mail.

4. Notify credit bureaus and the appropriate election board of the grantor’s passing to prevent possible fraud.

5. Coordinate with a local attorney for the timely admission of the will to probate and completion of any additional probate proceedings if needed.

6. Contact nursing homes, utility, insurance, and other service providers to collect any refunds and add them to the total estate.

7. Complete forms and provide the documentation needed to receive death benefits from life insurance policies, annuities, pensions, and other types of benefits and contracts.

8. Secure and protect all estate assets. This includes changing locks on trust-owned real estate as well as securing cars and all personal property including artwork, jewelry, and coins.

9. Confirm title and arrange appraisals and inspections of any real estate.

10. Obtain appraisals and date of death valuations of any other trust and estate assets for cost basis calculations, tax returns, and other estate processes.

11. Sell or distribute all property (real estate, automobiles, artwork, jewelry, etc.) according to the estate planning document.

12. Publish local notice to creditors and/or notice of trust to shorten the amount of time creditors have to assert claims against the trust and/or estate.

13. Review and pay all outstanding bills and debts of the decedent. This includes resolving any creditor claims against the trust or estate.

14. Coordination and filing of state and federal tax returns with the appropriate agencies including the final individual and trust income tax returns, and if necessary, the Federal Estate Tax Return (Form 706).

15. Distribute assets to the beneficiaries according to the trust or will.

16. Fund any continuing trusts.

Overview of key estate administration actions

Several important items must be completed on the way to settling the estate and issuing final distributions to beneficiaries. Below is an overview with approximate timeframes for their completion:

Notice to creditors: The notice to creditors is used to notify any creditors that may have a claim against the trust or estate. Depending on state laws, in most cases, claimants have between three and twelve months from the date the notice is published to come forward. Using this process, beneficiaries can be protected from any creditors of the estate after final distributions.

Notice to beneficiaries: State statutes generally require that a formal notice be sent to all qualified beneficiaries of a trust and/or all heirs of a probate estate within a certain timeframe.

Marshalling the assets: This includes the transfer of all assets not currently held by Commerce Trust into the administrative trust and/or estate account within Commerce Trust. In addition, we arrange for final disposition of all real estate and tangible personal property including distribution or sale of these assets. This process can typically take six to nine months to complete.

Income tax returns: We file individual returns as well as a combined trust and estate return during this process. The individual return is submitted for the year of death; a trust and/or estate return is for the period between the grantor’s death and the final distributions. Filing of individual tax returns must be completed by the IRS deadline or extended deadline.

Federal/state estate tax return: If a person had a federally taxable estate at the time of their death, we must also file a Federal Estate Tax Return (Form 706). The Federal Estate Tax Return must be filed nine months from the date of death. Complex returns may require an additional six-month extension. A state inheritance tax return may also be required.

IRS/state review: Once an estate tax return has been filed, the respective agency may take anywhere from one to three years to complete its review.

Specific cash bequests: If the trust or will provides for specific cash bequests, these are typically issued within the first six months after the estate settlement process begins.

Final distributions: For an estate that is not subject to federal or state estate taxes, the final distribution of assets is typically made between 12-18 months from the time the estate settlement process begins. For a federally taxable estate (state-level estate taxes may also apply), the final distribution of assets can take between 18-36 months. These are approximate timelines once Commerce Trust assumes responsibilities as a trustee, and unexpected legal or tax issues may delay this process.

We recommend consulting your tax professional regarding how distributions received from an estate may affect your personal tax situation. To assist you with tax preparation, Commerce Trust will send you details of any assets you received by April 15 of the following year. Note that this may require you to extend your individual tax return for that year.

Commerce Trust fees

When named to serve as trustee or personal presentative/executor we charge a one-time estate settlement fee in addition to our irrevocable trust management fees. Additional fees may apply based on the holdings of the estate. Depending on the nature of the assets held in the trust/estate, fees for real estate, closely held business interests, tax preparation, and special services may apply. Contact your Commerce Trust wealth management team to discuss your needs.

Estate settlement with Commerce Trust

The Commerce Trust team follows a defined process to ensure estate settlement matters are addressed promptly and any unexpected challenges are managed effectively. In doing so, you can have peace of mind knowing the necessary steps will be taken care of on your behalf, alleviating you and your family of the administrative burden of these important tasks. For a smooth estate transition, consider our private wealth management services. Our wealth management teams are comprised of specialists who coordinate to offer comprehensive estate, retirement, and financial planning services under one roof. Contact Commerce Trust today to proactively secure your financial legacy.

The opinions and other information in the commentary are provided as of May 31, 2024. This summary is intended to provide general information only, and may be of value to the reader and audience.

This material is not a recommendation of any particular investment or insurance strategy, is not based on any particular financial situation or need, and is not intended to replace the advice of a qualified tax advisor or investment professional. While Commerce may provide information or express opinions from time to time, such information or opinions are subject to change, are not offered as professional tax, insurance or legal advice, and may not be relied on as such. 

Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Commerce Trust is a division of Commerce Bank.

Investment Products: Not FDIC Insured | May Lose Value | No Bank Guarantee