Estate, Powers and Trusts, § 12-2.2: Action May Not be Joint or Several; Right to Implead
When someone passes away, it is up to that person’s executor or estate administrator to wind up the decedent’s affairs. This includes not only distributing estate assets, but is also involves paying debts of the estate. Typically estate debts are paid from estate assets prior to distribution of assets. However, in cases where a creditor was not paid prior to the distribution of assets, the law allows creditors to try to collect from the beneficiaries or heirs who received distributions from the estate. In fact, under New York Estate, Powers and Trusts, § 12-2.2, Action may be joint or several; right to implead, creditors are permitted to file actions against one or more distributees in an effort to recoup the debt owed by the estate. If you are an executor, beneficiary, or heir and you have questions about debts owed by a decedent’s estate, contact an experienced New York estate litigation lawyer who will explain to you the rules related to the payment of estate debts and who will also explain your legal rights under New York probate law.Role of executor or the estate administrator in paying estate debts
When a decedent passes away leaving a will, it is the job of the executor named in the will to wind up his estate and distribute assets to the beneficiaries named in the will. If the decedent passed away without a will, the court will appoint an estate administrator to manage the decedent’s estate. In either case, the job of the estate administrator (or executor) involves the following:
- Inventorying the estate. One of the first responsibilities of an estate administrator is figure out what property is in the estate and its value. This is critical as the estate administrator must know what assets are available to pay creditors and distribute to beneficiaries. Probate property may include real estate such as the family house, condo or co-op. It may also include financial property such as bank accounts and investment accounts. Personal property such as the contents of a house, clothing, collectibles, and vehicles would be estate property. However, as a New York estate litigation lawyer will explain, not all property that a decedent owns is necessarily probate property. There may be some property that passes to beneficiaries outside of probate or estate administration. Examples of such property include retirement accounts with designated beneficiaries and real estate owned by the decedent as a joint tenant with a right of survivorship.
- Appraising the estate. Once the estate administrator understands what property is part of the estate, he must understand its value. It may be necessary to hire a professional to appraise some items to ensure an accurate valuation.
- Pay estate debts. The estate administrator must pay estate debts. Estate debts may include debts owed by the decedent at the time of his death, expenses related to managing the estate, federal and state taxes, and other claim against the estate. The estate administrator is required to publish a notice about the decedent’s death in order to alert creditors. Creditors must file claims against the estate within a specific time period. Debts are to be paid from estate assets. If liquid estate assets are not sufficient, then the estate administrator has the right to sell assets in order to get cash to pay debts.
- Distribution of assets. Once debts are paid, the estate administrator must distribute assets to beneficiaries and heirs.
Once the executor reports to the court that estate debts have been paid, the court will give the executor permission to close the estate and distribute the assets according to the terms of the will. If there is no will, the estate assets will be distributed to the decedent’s heirs according to the laws of intestate succession.
Although the law requires executor or estate administrator to notify creditors of the debtor’s death, for a variety of reasons not all creditors file timely claims. As an estate litigation attorney in New York will explain, failure of a creditor to timely file a claim against the estate does not leave that creditor without recourse. Such creditors have the right to try to collect the money from the beneficiaries and heirs who received distributions. In cases where there are multiple beneficiaries or heirs who received distributions from the estate, under § 12-2.2 of New York Estate, Power and Trust law, a creditor can sue one of the distributees. That distributee in turn has the right to implead other distributees. In other words, the distributee who is sued by the creditor has the right to bring the other distributees into the lawsuit in an effort to apportion liability among all distributees.Related Statutory Provisions
- Liability of distributes and testamentary beneficiaries: Estates, Powers and Trusts, § 12-1.1
- Extent of liability; judgment debtor’s right to indemnity and contribution: Estates, Powers and Trusts, § 12-1.3
- Effect of application to surrogate to sell real property: Estates, Powers and Trusts, § 12-2.3
- Effect of judgment: Estates, Powers and Trusts, § 12-2.4
An action may be brought against one or more of the persons subject to liability under this article. A person against whom an action is brought may implead, pursuant to the provisions of CPLR article 10 governing impleader, any person who may be liable to him for indemnity or contribution under paragraph (b) of 12-1.3.Contact the Law Offices of Stephen Bilkis & Associates
If a deceased loved one’s creditor contacts you demanding payment from you, it is understandable that you would be both shocked and confused. New York law related to payment of debts owed by an estate is complicated, and under certain circumstances does allow creditors to go after a decedent’s beneficiaries or heirs. The estate litigation attorneys serving New York at the Law Offices of Stephen Bilkis & Associates have years of experience representing beneficiaries, heirs, executors, and administrators in disputes related estates and distributions of assets. We are here to help. Contact us at 1-800-NY-NY-LAW (1-800-696-9529) to schedule a free, no obligation consultation regarding your case. We represent clients in the following locations: Nassau County, Bronx, Brooklyn, Long Island, Manhattan, Queens, Staten Island, Suffolk County and Westchester County.