New York City Estate Administration Lawyer
When someone passes away, that person's estate must be settled. This process is called either probate administration or estate administration. Though these terms are often used interchangeably, if the person leaves a will the process is called probate administration, while if the person dies intestate, meaning without a will, then the process is referred to as estate administration. While the ultimate goal of estate administration is to distribute the decedent's assets to his beneficiaries or heirs, that is not the only goal of estate administration. The person who manages the process of estate administration is referred the estate administrator. At the direction and supervision of the Surrogate's Court the estate administrator will wind up your affairs and ultimately distribute your assets to your heirs. If you are appointed to serve as the administrator over a loved one's estate it is important that you work with an experienced New York City Estate Administration Lawyer who will guide you through the complicated process of estate administration so that the assets of the estate can be distributed as quickly as possible.
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Unlike an executor who is named in a will, an estate administrator is appointed by the New York Surrogate's Court. An estate administrator is appointed in response to the filing of a Petition for Letters of Administration. Notice of the petition will be given to the decedent's heirs and other interested parties. If no one objects, then the judge will determine the appropriate person for the job. That person may be decedent's surviving spouse, child, sibling, parent, or some other person who is not a relative. The judge will then issue that person the letters of administration. The letters of administration officially appoint the estate administrator giving that person the legal authority to begin the process of managing the estate. Your estate administrator is sometimes referred to as your personal representative.Responsibilities of the estate administrator
There is a wide range of duties that the estate administrator must handle. However, the three major responsibilities include: taking control of and manage the estate assets, paying estate debts and taxes, and distributing the estate assets to the decedent's heirs. In fulfilling these responsibilities, as a fiduciary the estate administrator must act in the best interest of the estate and the heirs and refrain from self-dealing. This means that the estate administrator must not manage the estate in a manner that benefits him or third parties, but only in a manner that benefits the estate.
Take Control of Estate Assets. One of the first jobs of the estate administrator is collect and to take control over the decedent's assets that are part of the probate estate. Probate property includes all of your real property and personal property that you owned either as a sole owner or as a co-owner with one or more people. Probate property is subject to estate administration by your estate administrator or executor, if you left a valid will. Most people think of estate assets as including items such as bank accounts, investment accounts, a house, artwork, antiques, jewelry, and other personal property. However, there are other types of property that may be part of a probate estate, and there is property that may first appear to be part of the probate estate, but actually is not.
Probate property includes:
- Real property owned by you in severalty, meaning that you alone own it.
- Real property owned by you in a tenancy in common. Tenancy in common is a form of concurrent ownership of real or personal property by two or more persons called tenants in common. Each person owns a separate undivided interest in the property.
- Debts owed to you such as debts in the form of promissory notes, loans, rents, income tax refunds, mortgages, royalties and stock dividends
- Gain from a sale of a business
- Retirement benefits such as Social Security, Railroad Retirement, and Veterans Administration benefits
- Damages from civil lawsuits such as a personal injury lawsuit you filed
For example, Keisha Rhines owns a house, SUV, home furnishings and a bank account individually, meaning she is the sole owner of each of these assets. Keisha also owns a vacation home equally with her sister, Trisha. If Keisha dies all of this property including her 50% interest in the vacation home as a tenant in common, would be part of her probate estate. It would pass to her heirs if she died intestate or to her beneficiaries if she has a will.
It is important to understand that probate property is subject to claims from creditors as well as federal and state estate taxes (death taxes).
Assets that would not be part of your probate estate include:
- Your ownership interest in real or personal property that you hold in joint tenancy or tenancy by the entirety
- Any property that you transferred into a living trust (inter vivos trust) prior to your death
- Other types of inter vivos gifts, meaning any property that you gave away during your lifetime
- Real estate subject to a transfer-on-death (TOD) deed
- Money held in a pay-on-death (POD) bank account
- Securities and brokerage accounts registered in TOD form
- Proceeds of life insurance policies and money that is part of a plan that has a designated beneficiary that is an individual. Examples of such plans include annuity plans, 401(k) plans, employee stock ownership plans (ESOPS), self-employed retirement plans, IRAs, and even US Savings Bonds. (However, if the designated beneficiary is your "estate," then the proceeds will be part of your probate estate.)
Each of these types of assets is nonprobate property and goes directly to the named beneficiary or surviving owner by operation of law, outside of the probate process. In addition to being distributed outside of intestate laws or your will, such property will not be subject to the claims of your creditors.
The process of going through the decedent's estate may be tedious as you may have to go through a great deal of paperwork to find information. However, the only way to make an accurate determination of the value of the property in the estate is to find all assets and have them appraised.
Managing the Estate. While the ultimate goal of estate administration is to distribute estate assets to the decedent's heirs, doing so will take some time. In the meantime the estate administrator must manage the estate's assets. This may involve making sure that property is secure and paying estate bills such as utility bills or credit card bills. The administrator must also collect any money owed to the deceased. If the decedent owned a business, the administrator may have to sell assets, take care of payroll and otherwise temporarily run the business until it is transferred to the decedent's heirs or sold.
If there is not enough cash in the assets to pay all of the estate's debts, then the administrator may have to sell property in order to satisfy debts. Assets such as real estate, jewelry, and vehicles are typically sold at public auction.
Pay Estate Taxes. One of the responsibilities of the executor is to pay estate taxes. If necessary, the administrator can hire an attorney or accountant to help calculate any estate taxes that are due. In addition, the administrator is responsible for filing the decedent's final tax return. If the decedent owes taxes, the administrator will pay them out of estate assets. If a refund is due, it will be added to the estate.
Closing the estate. After all estate debts are paid, claims are resolved and taxes are paid, the administrator must provide the Surrogate's Court with an accounting of the estate showing all income earned or disbursements made by the estate after the death of the deceased.
Distributing Estate Assets. The last step in the administration process is distributing the estate assets. Prior to the final distribution of assets, small allowances can be given to the testator's spouse, minor children and others who relied on the testator for support. In general, however, no assets are distributed until debts paid and all other estate issues are resolved.
Since there is no will, New York law dictates who will receive the decedent's property. The only potential heirs are a surviving spouse and certain blood relatives, including children, parents, grandparents and siblings. The rules of intestate succession give a specific order in which statutory heirs may inherit. NY EPTL § 4-1.1. If the decedent has only a surviving spouse, then he or she will receive the entire estate. If the decedent has both a spouse and surviving children, then the spouse will receive the first $50,000 of the estate with the remaining assets being split between the children and the spouse. If there are no children or spouse, then the decedent's parents will get the entire estate. After that, the decedent's siblings and then other blood relatives will be entitled to share in the estate.
Even though the law states clearly who may inherit, family members may be dissatisfied with the result and resort to estate litigation. Another problem that occasionally develops is where heirs are difficult to locate. When this happens the estate administrator must make a diligent effort to locating the missing heirs.Hiring professionals
Oftentimes estate administration involves complex issues that the estate administrator does not have the experience or expertise to handle. This may mean that the estate administrator may need to hire such professionals as an attorney, accountant, or financial advisor. The estate administrator would have to get permission from the court to do so. The fees from these professionals would be paid out of estate assets prior to the distribution of assets.Problems during Estate Administration
Estate administration is not always a smooth process. Should problems arise during the administration of am estate, it is the responsibility of the estate administrator to manage and resolve such issues. Examples of problems include a missing heir, a will contest, or an objection to how the administrator or other fiduciary is managing the estate's assets and affairs. Any problem in the administration of an estate may cause a delay in probate and extra fees to the estate.
The process of estate administration can be far from routine. Issues such as determining exactly what property is part of the probate estate can present complex issues of ownership. Furthermore, missing heirs and estate litigation can add additional layers of complexity to the process. An experienced New York City Estate Administration lawyer will help you manage the estate administration process as efficiently and quickly as possible under the circumstances. The staff at Stephen Bilkis & Associates, PLLC has extensive estate planning experience and frequently represents clients before the New York Surrogate's Court. Contact us at 1.800.NY.NY.LAW (1.800.696.9529) to schedule a free, no obligation consultation regarding your estate plan. We serve individuals throughout the following locations: