When a person dies, there are several different routes that can be taken to administer the estate. These routes vary based on whether the decedent executed a Last Will and Testament prior to his or her death and the value of the total estate assets. This legal briefing outlines three common routes to administer an estate when a person dies in New York State.
Dying With A Will
A properly executed Will allows the person who executed the Will (known as a “testator”) to nominate someone he or she trusts to carry out the testator’s wishes. This nominated person is referred to as an “Executor”, and the Executor is granted the power to act on behalf of the testator’s estate by the Surrogate’s Court.
Upon the death of the testator, the customary procedure is that the nominated Executor submits the testator’s Will and other required documentation to the Surrogate’s Court to allow the Will to be probated. Once the Surrogate’s Court reviews the documentation provided and the Will is determined to be valid, the Court will issue a certificate called “Letters Testamentary” to the Executor to formalize the Executor’s official appointment to the role. An Executor has no power to act for the estate until the testator has received these Letters Testamentary. The general duties an Executor typically faces are as follows: to identify and gather the decedent’s assets, to utilize the decedent’s assets to pay all of the decedent’s debts, taxes, and any costs incurred due of the administration of the decedent’s estate, as well as to protect estate assets, and ultimately, to distribute the estate assets according to the terms set out in the Will.
There are occasions when the probate of a Will can be delayed. A few examples are as follows: someone with legal standing may choose to contest the validity of the testator’s Will; or a more-lengthy search for the next of kin of the decedent is necessary to properly notify all interested parties that the Will is being offered for probate. When a delay is anticipated, or even when there is no significant delay, but actions need to be taken immediately to protect estate assets, the nominated Executor can file a petition with the Surrogate’s Court seeking “Preliminary Letters Testamentary”. Once a Preliminary Executor has been appointed, the estate administration can move forward pending the probate of the Will and the Court’s issuance of Letters Testamentary to the nominated Executor. A Preliminary Executor, for example, may be responsible for paying estate taxes and debts, collecting assets, and safeguarding the estate assets. It is common for the Preliminary Executor to be granted all the powers of an appointed Executor, except that the Preliminary Executor is not permitted to distribute estate assets to beneficiaries.
In the event that a Will has been executed, but no Executor was named within the Will, or the Executor named is incapable or refuses to act, an “Administrator C.T.A” can be appointed by the Surrogate’s Court. “C.T.A” is an abbreviation of the Latin phrase “cum testamento annexo”, which means “with the Will annexed”. An Administrator C.T.A has all the same duties as an Executor or an Administrator and is permitted to collect estate assets, pay administrative expenses, pay taxes and debts, and distribute assets in accordance with the decedent’s Will. Any interested party can petition the Surrogate’s Court to be appointed as an Administrator C.T.A. The Surrogate’s Court will typically give priority to close family members to step into this role.
Dying Without A Will
In the event an individual dies without having executed a Will, the Surrogate’s Court will appoint an Administrator of the decedent’s estate. An interested party can submit a petition to the Court in the county where the decedent was domiciled at the time of his or her death. Typically, the person most closely related to the decedent has the greatest preference in being appointed if the Surrogate’s Court receives multiple petitions seeking appointment to this role. The Surrogate’s Court will first look to a spouse, followed by adult children, then adult grandchildren, and if none exist then the Court will look to the decedent’s parents, then to the decedent’s adult siblings. An Administrator does not secure the authority to act on behalf of the estate until the Surrogate’s Court has issued the person a certificate called “Letters of Administration”. Letters of Administration serve as the documentary evidence of the Administrator’s authority to act on behalf of the estate. Like Executors, Administrators are permitted to collect estate assets, to pay taxes and debts, and ultimately to distribute estate assets to the distributees, which is the lawful name of the people that will inherit assets in accordance with New York State statute when a person dies without a Will.
In the event that no relative of the decedent submits a petition to become the Administrator, or when there has been mismanagement of an estate that has led to a significant devaluation of an estate, the Surrogate’s Court can appoint a Public Administrator. A Public Administrator appointed by the Court has the lawful authority to administer the estate. A Public Administrator performs similar duties to an Administrator and will also attempt to locate any potential heirs that may have a claim to estate assets.
Estates Worth Less Than $50,000
In the event an individual dies with or without a Will, and the decedent’s personal property is valued at less than $50,000, the decedent’s estate is eligible to be administered through a process known as a “Voluntary Administration.” The individual that would customarily act as the estate’s Voluntary Administrator depends on whether or not there is a Will. If there is a Will, the Executor named in the Will has the first right to act as the estate’s Voluntary Administrator. If the individual dies without a Will, the Voluntary Administrator is customarily a distributee, in the following order of lawful preference: surviving spouse, adult children, adult grandchildren, parent, sibling, niece or nephew, aunt or uncle.
Letters of Voluntary Administration are typically issued to allow the Voluntary Administrator access to certain assets and those assets only. The Letters issued by the Court are tailored to each individual Voluntary Administration. Before collecting any assets, the Voluntary Administrator must show the bank, or any other agent involved, evidence of the decedent’s ownership, as well the Voluntary Administrator’s right to collect that asset on behalf of the estate – evidenced by the Letters of Voluntary Administration issued by the Court. The Voluntary Administrator will typically be responsible for collecting estate assets, paying the estate’s debts, and distributing the remaining assets to the required individuals or entities.
Now That You Know This Information, What Should You Do?
One of the easiest ways to ease the burden on your loved ones upon your passing is to lawfully execute a Will that clearly dictates your wishes and appoints an Executor (and an alternate Executor in the event your chosen Executor cannot act or refuses to act at the time of your death). By taking this action, you are declaring to the world (and, more importantly, to the Surrogate’s Court) who you have chosen to administer your Estate. This can help to remove the familial strife that can arise with deciding which family member(s) will step into the role of Executor upon your death and can also reduce the chances for litigation amongst family members upon your death.
As always, the attorneys at Pullano & Farrow are available to answer questions you may have regarding your Last Will and Testament and other estate planning questions.
This Legal Briefing is intended for general informational and educational purposes only and should not be considered legal advice or counsel. The substance of this Legal Briefing is not intended to cover all legal issues or developments regarding the matter. Please consult with an attorney to ascertain how these new developments may relate to you or your business. © 2021 Law Offices of Pullano & Farrow PLLC.