If you leave a will, upon your death your estate will have to go through a process called probate before your property is transferred to your beneficiaries. Probate is the process where a judge determines if you will is valid and oversees the settling of your estate and distribution of your assets. The executor whom you named in your will has the responsibility of completing the tasks involved in probate. Probate can be fairly routine involving the gathering of your property, the paying of your debts and the distribution of assets. Of it can be complicated involving probate litigation and estate tax issues. Either way, probate takes time. At a minimum probate will take several months and can take several years. However, there are steps that you as the testator can take to ensure that probate is not delayed and that your beneficiaries receive the property that you choose to leave them as quickly as possible. To learn more about probate and the process of creating a will, contact a Bronx Probate lawyer who will work closely with you to ensure that your estate does not get unnecessarily delayed in probate.
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The job of your executor involves a great deal of responsibility regardless of the size of your estate. While many of the responsibilities of your executor may be routine, your executor will have a great deal of discretion in how he or she carries out these responsibilities. In addition, your executor will have to interact with your family members, beneficiaries, heirs and other interested parties. It is important that your executor have the ability to interact with them in such a way that conflict is minimized. Thus, you should take care when selecting your executor. Some issues to consider when naming your executor include:
- Familiar. Your executor should be someone who not only you know well, but someone who also knows your family well and is on fairly good terms with them. .
- Fair. The person you pick for your executor should be fair. During the probate process, concerns and conflicts may arise regarding the settling of the estate. Your executor must be able to address these issues keeping in mind the best interests of the estate and all of the beneficiaries.
- Trustworthy. Your executor will have a fiduciary relationship with your estate and your beneficiaries. This means that your executor must fulfill his or her responsibilities as an executor with the utmost care, and in an unselfish manner.
- Practical. The executor of your last will and testament will need to use common sense and make practical decisions while managing your estate until it is transferred to your beneficiaries.
- Organized. Because of the many tasks which need to get done and the many details involved, your executor will need to be organized. For example, the executor will have to keep track of your estate's bills, balance its checkbook, locate and inventory your assets, resolve to claims against the estate, and respond to issues that may arise with your beneficiaries. While doing all of these things your executor will have to tend to his or her own personal affairs. Thus, the person you name as your executor must be able to successfully manage each of these responsibilities.
A spouse is the most often selected as an executor, followed by adult children and siblings are as they are often relatives who are closest to the testator and, therefore, the most trusted. Some forgo selecting a family member and opt for a disinterested executor such as corporate executor. This is because in some cases if the executor is also a beneficiary, there may be distrust among other beneficiaries and family members regarding the management of the estate, possibly resulting in probate litigation. Also, a relative who is close to you may not be able to effectively discharge the duties of an executor because of the extreme emotional distress your death has caused.
If you have substantial assets or your estate is complex an executor who is an attorney or accountant may be a good idea as such an executor may be more equipped to manage a complicated estate. It is also a good idea to name a successor executor in the event that the primary executor is unable to serve.The Probate Process
In order for a will to go through probate your estate must first be opened. This means that your will must be located and a petition must be filed with New York Surrogate's Court in the county in which you lived at the time of your death and file a Petition. While the executor is often the person to file the probate petition, it can be filed by any interested party such as a beneficiary or heir. The petition must include a copy of your will and any amendments, a certified copy of your death certificate, and the filing fee. On the petition you will have to include the names and addresses of the beneficiaries as well as the approximate value of the estate.
A New York Surrogate's Court judge will review the will to determine if it valid. To be valid New York wills must be signed by the testator in the presences of 2 witnesses. If the will shows this, the judge will admit the will to probate and issue the person you named as executor in your will Letters Testamentary. In doing so, the executor is given the legal authority to begin managing your estate and ultimately distributing your assets to your beneficiaries. However, if a beneficiary or other interested party feels that your will is not valid, that person can initiated a will contest and delay probate.
Managing the estate involves a number of steps:
Locating Assets. Your executor must find you assets. This may be as simple as your executor going to your home and inventorying its contents. It may also mean finding bank and investment accounts. You executor's job may become somewhat sticky if your executor must retrieve assets that have been loaned to family and friends. In fact, dispute may arise as to whether or not you gave the asset away or if you loaned it. If you have property in another state, the executor's job becomes more complicated as it may be subject to probate in that state.
Not all of your assets are subject to your will and probate. Assets such as proceeds of life insurance policies, retirement plans such as pension plans, 401(k) plans and IRAs, property that you own jointly with others, and property that you placed in a trust while you were still living will pass to the beneficiaries outside of your will.
Appraising Assets. Before your executor will be able to pay your debts and distribute your asset, your executor will have to figure out the exact value of your estate. The values of a vehicle, bank account or investment account are fairly straightforward to determine. However, other items such as jewelry and collectibles or a small business may require that the executor hire someone to give an appraisal. If your estate does not have enough assets to pay your estate's debts, then not only will some of creditors not be paid, your beneficiaries will not receive anything.
Paying Creditors and Final Bills. Your executor will then pay your estate's debts. Your executor must notify known creditors of your death as well as publish a notice so that anyone who has a claim against your estate will be put on notice. Creditors and claimants have 7 months after the date given in the published notice to file claims against the estate. There may be claims that are filed against the estate that your executor determines are not valid. If your executor refuses to pay a claim, the claimant may initiate probate litigation against the estate in an effort to get paid. In addition to any bills that you incurred before your death, estates debts also may include funeral expenses and expenses related to managing your estate. For example, if the executor needed to hire an appraiser, attorney, or accountant, their fees would be paid by the executor from estate assets.
Filing and Paying Taxes. Your executor must file your final federal, state, and local tax returns and pay any income taxes owed. He or she must also file estate income tax returns, if required. If you are audited, your executor is responsible for resolving the audit.
Closing the Estate. Before your executor is legally permitted to distribute your assets to your beneficiaries your estate must be closed. The executor will complete a formal accounting of all estate transactions and file it with the Surrogate's Court. Once the court approves the accounting the estate is closed and the executor may distribute assets to the beneficiaries according to the terms of your will.
Distributing Assets. The transfer of assets to beneficiaries is usually not very difficult. For cash gifts the executor will simply write a check to the beneficiary from the estate's bank account. For tangible personal property such as jewelry, clothing or household furnishings, your executor will simply turn it over to the appropriate beneficiary. If the property is real estate, the executor must make sure that the title to the property is properly transferred to the appropriate beneficiary.
In some cases the executor may have difficulty locating a beneficiary. The executor must make a reasonably diligent effort to locate a missing beneficiary, including possibly employing an heir finder. If the executor cannot find a beneficiary and the property remains unclaimed, the property will eventually be distributed to the missing beneficiary's statutory heirs according to New York's intestacy laws. EPTL § 4-1.1. If the named beneficiary has no statutory heirs, then the property will become the property of New York State according escheat rules. N.Y. ABP. Law § 1215.
The job of a New York Surrogate's Court judge is to oversee the entire process of winding up a decedent's estate. This involves adjudicating the validity of a will, preventing malfeasance by executors, enforcing the provisions of a will, and ensuring the proper distribution of the assets. Typically this requires little action on the part of the Surrogate's Court judge other than signing off on certain requests such as to sell estate assets and to close the estate. If there is no will contest or other estate litigation, then the judge will have little other direct involvement in the probate process. If there is any sort of dispute involving the estate the judge will have a significant role. The judge will have to resolve challenges to the validity of the will, disputes regarding how the executor and other fiduciaries are managing the estate, and contested claims against the estate.Timeframe for Probate
One problem with probate is that it can take a long time. In New York it generally takes at least 9 months, and can take 1 or more years. The first 9 months of the process includes the time it takes for the court to issue the letters testamentary to the executor and the time required to wait for claimants to come forward. If there is a will contest or any type of estate litigation probate will take even longer. A will contest can be brought by a beneficiary, an heir, or any other interested party and may involve a challenge to the validity of the will, a challenge to how the executor has managed the estate, or may involve a claim against the estate that the executor refused to pay.
Another cause for delay in probate is if your estate requires the filing for an estate tax return. New York law requires that large estates with assets worth over $1,000,000 file estate tax returns. If this is the case, your estate will not be closed until you receive notification from the taxing authorities. This can add up to 3 years to the probate timeframe.Consequences if You Do Not have a Will
If you do not have a will your estate will still have to go through a probate process. However, it is referred to as estate administration. Instead of an executor, the Surrogate's Court will appoint an estate administrator. The estate administrator will have to do the same activities as an executor to wind up your affairs. However, instead of distributing you assets to your named beneficiaries, the administrator would distribute your assets to your heirs according to New York's rules of intestate succession.
New York intestacy laws identify only spouses and certain blood relatives as possible heirs. For instance, if you are survived by your spouse but have no children your spouse will receive your entire estate. If you are survived by both a spouse and children, your spouse and your children will share in your estate. Your spouse will receive the first $50,000 of your estate and the balance will be divided between your spouse and your children, with your spouse receiving half and your children splitting the other half. Your children will receive your entire estate if you pass away without a surviving spouse. There are also provisions for when parents, grandparents and other blood relatives will share in an estate. NY EPTL § 4-1.1.
Under New York intestacy rules friends, organizations, and even certain blood relatives will not be able to inherit your property unless you provide for them in a will. Furthermore, blood relatives who you do not wish to share in your estate might receive a share if you die without leaving a will. The best way for your wishes to be fulfilled is for you to have a will.
With proper estate planning you can ensure that the bulk of your estate will be distributed to your named beneficiaries without the delay caused by probate. For example, if you create and fund a living trust, those assets will pass to beneficiaries almost immediately upon your death, avoiding delays associated with probate. The staff at Stephen Bilkis and Associates has years of experience in working with clients to create wills, trusts and other estate planning documents, as well as representing estates in New York Surrogate's Court. Contact us at 800.696.9529 to schedule a free, no obligation consultation regarding your estate plan.