The spin-state transition in LaCoO3 has eluded description for decades despite concerted theoretical and experimental effort. In this study, we approach this problem using fully charge self-consistent density functional theory + embedded dynamical mean field theory (DFT+DMFT). We show from first principles that LaCoO3 cannot be described by a single, pure spin state at any temperature. Instead, we observe a gradual change in the population of higher-spin multiplets with increasing temperature, with the high-spin multiplets being excited at the onset of the spin-state transition followed by the intermediate-spin multiplets being excited at the metal-insulator-transition temperature. We explicitly elucidate the critical role of lattice expansion and oxygen octahedral rotations in the spin-state transition. We also reproduce, from first principles, that the spin-state transition and the metal-insulator transition in LaCoO3 occur at different temperature scales. In addition, our results shed light on the importance of electronic entropy in driving the spin-state transition, which has so far been ignored in all first-principles studies of this material.