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New York Estate, Probate and Administration Basics


By J. Douglas Barics

January 2009


An estate of a deceased person is the legal entity which exists to hold assets, rights, or obligations of that person. Every estate will have one or more individuals appointed to act on behalf of the estate. Not every asset held by a decedent will pass to their estate. Nor is a decedent's estate the same as their taxable estate. As would be expected, the taxable estate is often significantly larger.


Probate is the process of having a last will and testament approved by the Surrogate's Court, and disposing of the decedent's estate in accordance with that will.


Administration is the process of disposing of a decedent's estate when there is no will.


In New York, the Surrogate's Court has jurisdiction over all estate matters.


ESTATE VERSUS NON ESTATE ASSETS


Assets which pass inside the estate

Assets which pass inside the estate are known as testamentary or estate assets. These include assets which are held in the decedent's name alone, or assets which the named beneficiary has predeceased the decedent.


These assets are distributed from the estate to the beneficiaries in accordance with either the decedent's will, or if there is no will, by the laws of intestate succession.


Assets which pass outside the estate

Assets which pass outside the estate are known as testamentary substitutes. These include jointly held assets, assets which are held in trust for another, or any other asset in which has a named beneficiary. These assets pass automatically under the operation of law, and do not need to pass into the decedent's estate first.


Example 1:

A house is owned by two people as joint tenants, with right of survivorship. When one person dies, the house passes automatically to the survivor.


Example 2:

A bank account is held by a parent, in trust for a child. When the parent dies, the account automatically goes to the child.


ADMINISTRATION PROCEEDINGS


Administration proceedings are a Surrogate's Court Proceeding to gather and distribute assets for an individual who died without a will. The first step is to have an administrator appointed. The administrator is determined by statute, and will be from the following list:

  • The decedent's spouse
  • If there is no spouse, then it will be the decedent's children
  • If there are no children, then it will be the decedent's mother/father
  • If there are no surviving parents, the next in line is the decedent's sisters or brothers
  • If none of the above exists, then the grandparents may be appointed.

If more than one person qualifies, they must choose among themselves who will be appointed. If an agreement cannot be reached, then the Surrogate will decide who to appoint. Very often, the administrator must file a bond as a condition being appointed.


Once the administrator is issued letters of administration, they are obligated to locate and gather all estate assets, obtain an estate identification number from the IRS, open an estate account, manage all the estate assets, pay any debts which the decedent owed, reimburse reasonable funeral expenses, pay any estate taxes due, and finally, distribute the remaining assets. A partial list as to how assets are distributed is as follows:

  • When the decedent is survived by a Spouse and has no children, the spouse receives 100%
  • When the decedent is survived by a spouse and children, the spouse receives the first $50,000. The balance is then divided, with the spouse getting 50% and the children sharing the other 50%.
  • When there are children and no spouse, the children share in 100% of the estate.
  • When there is no spouse and no children, the parents share in 100% of the estate
  • When there is no spouse, no children, and both parents are dead, the estate is shared among all living children of the parents.

The administrator entitled to a commission of the estate as compensation. This commission is a percentage of the estate, and is a sliding scale based on the size of the estate.


Upon distribution of the assets, the estate is closed.


PROBATE PROCEEDINGS


Probate is the process under which the Surrogate's Court declares that a Will is valid and that its terms are legally enforceable. The proposed will must be filed in the Surrogate's Court along with a verified petition seeking letters testamentary. Notice of the proceeding must be given to any individual who would otherwise inherit if there was no will; the purpose being to allow all interested parties to consent to the will being probated or to file specific written objections why it should not be approved by the Surrogate.


Virtually all Wills nominate a proposed executor. This is the individual who will be authorized by the court to carry out the instructions in the will. The executor can also be a beneficiary under the will, but there is nothing wrong with nominating someone who will not inherit either.


In order for a Will to be probated, the person filing the probate petition must prove that the testator is dead, that the testator had the capacity to make a will, that he or she declared the will to be their last will and testament, that the will was properly executed by the testator, and that it was properly witnessed by two individuals. For uncontested probate proceedings, this proof can simply be a written affidavit. Contested proceedings may require testimony and other proof.


Once the will is probated and the executor is granted letters testamentary, the duties are very similar to that of an administrator. The executor must find and gather all estate assets, obtain an estate identification, open an estate account, manage the estate assets, pay any debts owed by the decedent, reimburse any reasonable funeral expenses, pay any estate taxes due, and distribute the remaining assets in accordance with the instructions set forth in the will.


The executor is compensated for his or her time by a commission from the estate, the amount of which is a sliding scale percentage of the total value of the estate.


Upon the distribution of the assets, the estate is normally closed.


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The article "New York Estate, Administration & Probate Basics" is provided as a free educational service by J. Douglas Barics, attorney at law, and does not constitute legal advice. Legal advice may only come from a qualified attorney who is familiar with the facts and circumstances of a specific case.


If you have any questions or comments, please feel free to contact Mr. Barics at lawyer@jdbar.com or (631) 864-2600. For more articles and information, please visit www.jdbar.com.


Copyright © 1998-2015 by J. Douglas Barics, attorney-at-law. All rights reserved.
J. Douglas Barics, Esq. – Divorce, family, matrimonial lawyer in Long Island, New York.



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