Probate is the process of determining inheritors, collecting estate assets, paying debts and filing taxes. A New York estate administration attorney can help you compile a list of all assets, have them appraised and ensure that Court and tax deadlines are met.
When someone dies with a will in place (testate), their property is transferred under that will. If they do not have a will, their property is distributed according to state intestacy laws.
Appointment of Personal Representative
The first step in probate and estate administration is petitioning the Surrogate’s Court to appoint the executor or administrator (and admit the will, if there is one) and obtaining any required clearances. This part of the process typically takes 2-4 weeks depending on how complex the estate is.
The second step involves the personal representative reviewing and paying bills, creditors’ claims and expenses. Often, an estate checking account is established to pay these expenses and the personal representative must decide which assets will be sold to pay these debts and when. If the estate does not have enough money to cover all expenses, state law sets forth a priority list for how these bills should be paid.
During this time, the personal representative will also send notices to all beneficiaries and heirs of the estate. He or she must file federal and New York estate tax returns and pay any taxes owed. Once all the estate’s assets have been gathered, expenses calculated and any controversies resolved, the personal representative will prepare an accounting for review by the beneficiaries.
Marshalling Assets
This is one of the major duties of the estate administrator. They are required to locate and take charge of all probate assets belonging to the deceased individual. This includes heirloom watches, real property, bank accounts and 401(k) plans. Certain accounts and policies, however, are considered “non-probate.” They typically pass directly to beneficiaries or according to forms filed with plan administrators and life insurance companies.
After taking possession of all probate assets, the estate administrator must pay creditors and file an inventory with the court. State statutes determine the time period for this filing. Creditors are given notice that an estate inventory has been filed and have the opportunity to submit their claims.
Once the statutory waiting periods have passed, the personal representative prepares an account to be reviewed by all interested parties. This document lists all credits and debits, and also provides a proposal for distribution of remaining assets. If any of the beneficiaries object to the accounting, they can challenge it in court.
Accounting
Most people own assets and carry debts at the time of death. Probate law dictates how those assets and debts are handled. An estate attorney who specializes in probate and estate administration can assist with navigating the process.
The first step involves petitioning the Surrogate’s court to appoint an estate representative and admit the will, if any, to probate. This part of the proceeding generally takes 2-4 weeks to complete.
Once the personal representative is appointed, he or she must review and pay outstanding debts and creditor’s claims. Often an estate checking account is opened to cover expenses such as funeral costs, legal fees, appraisers’ fees and more.
Heirs must also be notified of the proceedings and given the opportunity to claim assets that are owed to them. Depending on state laws, heirs may include surviving spouses and children, or other relatives who have a legal relationship with the deceased person. This process is known as escheatment.
Final Distribution
A final distribution of estate assets is when courts transfer ownership to beneficiaries and heirs. During this process, the Executor will locate all legal heirs and follow state inheritance laws regarding what each should receive. This can be a lengthy process since each person’s family may have complicated relationships.
During the marshalling process, the Executor will sell real property, liquidate stocks and other investments and transfer funds to an estate account. Then the Executor will prepare an accounting. This is a written form listing all credits and debits as well as a proposed distribution to the beneficiaries. This step usually takes a few weeks, assuming no objections are raised.
During this time, the personal representative may be required to file a bond to protect the Beneficiaries. This is a costly proposition, but it is necessary to ensure that the Executor is able to pay estate debts and taxes. Certain assets, such as property titled in joint tenants with right of survivorship, life insurance policies and retirement accounts that have listed beneficiaries and pass according to their terms, do not require probate and can bypass the entire process.
