What Happens to Bank Account When Someone Dies Without Beneficiary in New York

When someone dies without a beneficiary in New York, the account becomes part of the deceased's estate, and the funds in the account are distributed according to New York laws. If the deceased died with a will, the bank account forms part of the residuary estate if it was not specifically bequeathed in the will. If the deceased died without a will, the estate, which includes the bank account, is distributed ina ccordance with New York intestacy laws. In order to gain access to the proceeds in the bank account, the administrator or executor must present to the financial institution letters testamentary or of administration issued by the New York Surrogate's Court. If the estate is of small value, a shorter and simplified probate process may be utilized.

Consequences of Dying Without a Beneficiary

When someone dies without a designated beneficiary on their bank account, the account becomes part of their estate and is subject to the probate process. Probate is the legal process of administering the estate of a deceased person, which includes identifying and inventorying the deceased's assets, paying debts and taxes, and distributing the remaining assets to the heirs. The probate court appoints an executor or administrator (depending on whether the deceased died with or without a will) to oversee the probate process, which can be time-consuming and expensive. The executor or administrator must file a petition with the probate court, notify potential heirs, pay creditors, and obtain court approval for distributing funds. The probate process can take several months to a year or more to complete, depending on the complexity of the estate and any disputes that may arise.

When a bank account is subject to probate, the funds in the account are not immediately available to the deceased's heirs. The probate process can be delayed by various factors, such as difficulty locating heirs, disputes among family members, or challenges to the validity of the will (if one exists). Delays in the probate process can create financial hardship for the deceased's loved ones, who may be relying on the funds in the account to cover expenses such as funeral costs, mortgage payments, or living expenses. Complications can arise if the deceased has outstanding debts or taxes, as these must be paid from the estate before any funds are distributed to the heirs. If the estate is large or complex, the probate process can be costly, with legal fees and court costs consuming a significant portion of the estate's value.

Small Estates

In New York, if the value of the estate is small and below $50,000, a simplified probate process is utilized with the appointment of a voluntary administrator. This process, known as a voluntary administration, is designed to expedite the distribution of small estates and reduce the costs and time associated with traditional probate.

To qualify for voluntary administration in New York, the deceased's estate must meet the following criteria:

1. The value of the estate must be less than $50,000.
2. The deceased must have been a resident of New York at the time of death.
3. The estate must consist only of personal property, such as bank accounts, vehicles, and household items. Real estate cannot be part of a voluntary administration.

The process of voluntary administration begins when a person, usually a family member or close friend of the deceased, files a petition with the Surrogate's Court in the county where the deceased resided. The petitioner must provide proof of the deceased's death, such as a death certificate, and an itemized list of the deceased's assets and their values.

If the court approves the petition, it will appoint the petitioner as the voluntary administrator of the estate. The voluntary administrator is responsible for collecting the deceased's assets, paying any outstanding debts or taxes, and distributing the remaining assets to the rightful heirs or beneficiaries according to New York law.

The voluntary administration process is generally faster and less expensive than traditional probate, as it involves less court oversight and fewer legal formalities.

When a bank account owner dies with no designated beneficiary, you will probably need a probate lawyer to assist you in obtaining access to these funds. A probate lawyer like us can help you navigate the complex legal process of probate and ensure that the deceased's assets are distributed according to New York law. Should you need assistance, the Law Offices of Albert Goodwin are here for you. We are located in Midtown Manhattan, New York, NY. Call us at 212-233-1233 or email [email protected] to schedule a consultation.