New York Probate Property
When someone passes away, his (or her) will must go through a process called probate and his property must go through a process called administration before it can be distributed to the decedent’s beneficiaries. It is important to understand that not all of the property in your estate is subject to administration. Only your probate property is. Property that is not probate property bypasses the Surrogate’s Court process and goes directly to the decedent’s beneficiaries. To learn more about the impact of probate and administration on the probate property, consult with an experienced New York probate property lawyer at the Law Offices of Stephen Bilkis & Associates.Probate property
Probate property includes any asset that is owned solely by the decedent. This can include the following:
- Personal property. This can include clothing, artwork, jewelry, furniture, and appliances. It can also include bank accounts, investment accounts, stocks, bonds, vehicles, boats, and airplanes.
- Real property. Whether real estate is probate property or not depends on how it is titled. Only real estate that is titled solely in the decedent's name or held as a tenant in common is probate property. An experienced New York probate property lawyer can help you confirm how real estate is titled.
- Business interests. An interest in a partnership, corporation, or limited liability company
- Any life insurance policy or brokerage account that lists either the decedent or the estate as the beneficiary.
Non-probate assets include property that has a designated beneficiary and certain property that is co-owned with others. It can include the following:
- Property that is held in joint tenancy or as tenants by the entirety. Spouses commonly hold the family residence and other real estate as joint tenants with survivorship rights. However, joint tenancy ownership is not restricted to spouses.
- Bank or brokerage accounts held in joint tenancy or with payable on death (POD) or transfer on death (TOD) beneficiaries. Keep in mind that the designated beneficiaries in POD or TOD accounts have no ownership interest in the accounts until the death of the owner
- Property held in a trust. Property that is help in a living trust created by the decedent during his or her lifetime is not probate property. However, if the trust is a testamentary trust, meaning the trust was created by the decedent’s will, then the assets must go through probate before they are transferred to the trust.
- Life insurance or brokerage accounts that list someone other than the decedent as the beneficiary
- Retirement accounts. Retirement accounts such as IRAs, 401(k) plans have designated beneficiaries and are not probate property.
The probate process begins with the executor named in the decedent’s will files the will with the Surrogate’s Court along with a petition for probate. The Surrogate’s Court judge will review the will to ensure that it is valid. At this point, others who have an interest in the estate can come forward and contest the validity of the will. If the court agrees with the evidence presented by the objectant and concludes that the will is not valid, then the court will not allow that will to be probated. Otherwise, the court will admit the will to probate. At this point in the process the court will also formally appoint the executor, giving him (or her) authority to administer the decedent’s estate. The executor can then go about the activities required to wind up the decedent’s estate.
Probate and administration can be lengthy processes. This means that there may be a significant delay in beneficiaries receiving their distributions. On the other hand, non-probate property typically can be transferred to the beneficiaries fairly quickly after the decedent’s death.
Gathering estate assets. One of the first jobs of the executor is to identify the estate’s probate property. As a New York probate property lawyer will explain, the executor must understand what property is part of the probate estate and what property is not. This may require taking steps to learn how property is titled. For example, in order to know if a house that is reportedly co-owned with another person is probate property or not, the executor must find out if is titled as a joint tenancy, tenancy by the entirety, or tenancy in common. If the property is an individual bank account, the executor must determine if there is a POD designation.
Gathering estate assets also involves securing and safeguarding the property. For houses, condos, and co-ops, this may mean making sure that they are locked and that there are proper security systems, especially if no one will be occupying the property for a while. Vehicles should be locked and garaged, if possible. Proper insurance should be maintained on probate property.
Once the assets are gathered and secured, the executor must determine their value. In some cases putting a value on property is fair easy. For example, it would be easy enough to determine the value of a checking account. However, determining the value of unusual property may be complex and may require consulting with an expert. The executor must determine the value of the property as of the date of the decedent’s death.
Paying estate bills. One of the reasons that it is so important for the executor to inventory is that the executor must understand the value of the estate and the types of property in the estate in order to know what assets are available to pay estate debt and expenses. The executor is responsible for making sure all valid debts that are timely filed are paid. Part of the probate and administration process involves the creditors of the estate being notified of the proceeding in the Surrogate’s Court so that they will have the opportunity to file claims. Only claims that the executor concludes are valid and that are timely filed will be paid to the extent that there are sufficient assets in the estate to pay them.
Estate debt may include debt owed by the decedent at the time of his death as well as bills and expenses associated with the management of the estate. One of the first bills that the executor must pay from estate assets are the bills associated with the funeral and burial of the decedent. The executor is also responsible for making sure that all federal and local tax returns are filed and taxes paid on behalf of the decedent as well as the estate.
Distributing estate assets. One of the final duties of the executor is to distribute estate assets to beneficiaries according to the terms of the decedent’s will. Only probate property is subject to the will. If the decedent inadvertently includes a bequest of property that is not probate property, the bequest will fail.Intestate administration
As an experienced probate property attorneys in New York will explain, if the decedent passes away without a valid will, or if the Surrogate’s Court determines after a will contest that the decedent’s will is not valid, the decedent’s property will be distributed to his (or her) legal heirs based on New York’s intestate succession rules. Even though in the absence of a will “probate” is not necessary, the property that could have been the subject of the decedent’s will is still call probate property. Thus, only probate property will be distributed to the decedent’s heirs during the administration process.Contact the Law Offices of Stephen Bilkis & Associates
Understanding which property in your estate is probate property and which property is not, is important not only during administration, but for estate planning purposes. Non-probate property is not subject to your will, while probate property is. Any attempt to give away non-probate property in your will will fail. The skilled probate property attorneys serving New York at the Law Offices of Stephen Bilkis & Associates have years of experienced representing clients in a variety of estate matters including matters related to estate planning, probate, and administration. 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: Manhattan, Long Island, Nassau County, Queens, Brooklyn, Staten Island, Suffolk County, Bronx, and Westchester County.