Can the Executor of a Will Take Everything or Refuse to Distribute in New York?

By Albert Goodwin, Esq., Law Offices of Albert Goodwin, New York estate litigation

No. A New York executor does not own the estate. The executor holds it as a fiduciary for the beneficiaries named in the will, and must collect the assets, pay valid debts and taxes, and then distribute what is left as the will directs. An executor who keeps estate property for personal use, pays himself before he is allowed to, or sits on the estate without reason is breaking that duty.

Many beneficiaries who call us are dealing with something less obvious than outright theft. The executor has not paid anyone in a year. He moved into the house. He paid himself commissions. He says the bank accounts were "his" all along. Some of these things are lawful and some are not. This page sorts them out and explains when distributions are due. The detailed court remedies are covered on separate pages linked below.

When an Executor Can Lawfully End Up With Estate Property

An executor can receive estate assets in only a few situations:

• He is a beneficiary: If the will leaves him a gift or a share of the residue, he takes it on the same terms as everyone else, after debts, taxes and expenses are paid. If he is the sole beneficiary, the net estate is his once administration is complete.
• Statutory commissions: He is entitled to be paid for his work, but only at the statutory rates and only at the right time. See the commissions section below.
• Reimbursement: He may be repaid for legitimate estate expenses he advanced from his own pocket, such as funeral costs or property insurance, with receipts.
• A purchase that survives scrutiny: In limited circumstances he may buy an estate asset. New York treats this as self-dealing, and the rules are strict.

A fifth category causes the most confusion: assets that never belonged to the estate at all, such as a joint account that passed to him by survivorship. Those are discussed in their own section.

Executor Commissions: The Amount and the Timing

Commissions are set by SCPA § 2307 on a sliding scale applied to property the executor receives and pays out:

• 5% of the first $100,000
• 4% of the next $200,000
• 3% of the next $700,000
• 2.5% of the next $4,000,000
• 2% of anything above $5,000,000

Real property that passes to beneficiaries without being sold is generally not part of the commission base. A will can also set different compensation, and an executor may waive commissions entirely.

The amount is only half the rule. Under SCPA § 2307, commissions are allowed on the settlement of the executor's account. In practice that means the executor may take commissions in one of two ways: when the Surrogate's Court approves his account in a judicial accounting, or when the beneficiaries agree to the commissions in writing, usually as part of an informal accounting and release. If the executor wants commissions earlier, he must ask the court. SCPA § 2311 allows the court to authorize advance payment of commissions on notice to interested parties, and the court can require security.

An executor who writes himself a commission check from the estate account without court approval or beneficiary consent has acted improperly even if the figure matches the statutory schedule. Surrogates routinely surcharge executors for premature commissions, often with interest, and can reduce or deny commissions altogether where the administration was poor. If you see a payment to the executor on an estate bank statement with no court order behind it, ask what it was for.

When Distributions Are Actually Due

Many beneficiaries assume a delay means theft. Often it does not. New York builds a waiting period into every estate.

The seven-month period

Letters testamentary start the clock. Under SCPA § 1802, an executor who in good faith pays claims or distributes the estate after seven months from the issuance of letters is protected against creditors who had not presented claims by then. For that reason, executors are not expected to make distributions during the first seven months, and EPTL § 11-1.5 treats seven months from letters as the point at which a beneficiary may begin to press for payment.

Reasonable reserves

After seven months, an executor may still hold back money for good reasons. Common ones include:

• Federal and New York estate tax returns, which are due nine months after death for estates large enough to require them
• The decedent's final income tax returns and the estate's own fiduciary income tax returns
• Pending creditor claims, lawsuits or Medicaid recovery claims
• Costs of selling real property and carrying it until sale
• Legal and accounting fees to close the estate

A reserve should bear a reasonable relationship to these obligations. Holding back the entire estate for two years when the only remaining item is a modest tax return is not a reasonable reserve. Many executors make a partial distribution once the seven months pass and keep a smaller holdback until the estate closes. For a typical sequence of events, see our sample NYC probate timeline.

Interest on late legacies

Under EPTL § 11-1.5(d), a beneficiary of a general pecuniary legacy (a gift of a stated dollar amount, such as "$50,000 to my niece") is generally entitled to interest at the statutory rate if the legacy is not paid within seven months from letters, unless the will provides otherwise. Where an executor's unjustified delay causes the interest, the court can charge it to him personally rather than to the estate.

Compelling payment

If the seven months have passed and the executor has funds but will not pay, a beneficiary can petition the Surrogate's Court under SCPA § 2102 to compel payment of a legacy or distributive share. The court may instead direct a full accounting if it cannot tell what the estate owes without one.

A slow executor versus a dishonest one

Signs of a slow or overwhelmed executor include delayed returns, unanswered emails and a house that has not been listed, while the estate account itself is intact. Signs of misappropriation are different: money leaving the estate account to the executor or his family, estate funds deposited in a personal account, assets that disappear from the list, and refusal to show any records at all. Slowness may justify a petition to compel payment or an accounting. Misappropriation may justify surcharge, removal and a criminal referral.

The Executor Living in the House or Keeping the Car

An executor has authority to take control of the decedent's real property to protect it, and in some cases may sell it if the will grants a power of sale. Control is not ownership. An executor who moves into the decedent's house or apartment and lives there rent-free while other beneficiaries wait is using an estate asset for personal benefit. Surrogates have charged executors and occupying beneficiaries the fair rental value of the property, offset against their share, and have treated long unexplained delays in selling an occupied home as grounds for relief. The executor living in the house also remains responsible for keeping taxes, insurance and maintenance current, because a lapse can cost the estate money.

For the occupancy rules in detail, see our pages on a beneficiary living in the inherited house and a sibling living rent-free in the inherited house. If the executor wants to keep the house, the usual lawful path is a buyout at fair value, discussed on our inherited residence buyout page.

Vehicles follow the same principle. A car titled to the decedent belongs to the estate unless an exception applies. If there is a surviving spouse, or in some cases children under 21, EPTL § 5-3.1 sets aside certain exempt family property, including one motor vehicle up to a statutory value cap. Outside that exemption, an executor who simply starts driving the decedent's car, or transfers title to himself without accounting for its value, is taking estate property.

Purchases From the Estate and the Self-Dealing Rule

An executor who buys estate property for himself is on both sides of the deal. New York courts apply a strict rule to this. Under the "no further inquiry" rule, a fiduciary's self-dealing transaction can be set aside at the beneficiaries' option without any need to prove the price was unfair (see Matter of Ryan, 291 NY 376 [1943]). The fiduciary's good faith and a fair price do not save it on their own.

The leading New York case on conflicted executors is Matter of Rothko, 43 NY2d 305 (1977). The executors of painter Mark Rothko's estate sold and consigned his paintings on terms that favored a gallery with which two of them had ties. The Court of Appeals upheld their removal and affirmed damages measured by the paintings' increased value, not just the difference in sale price at the time. The case remains the standard citation for the principle that an executor's divided loyalty, by itself, can justify removal and personal liability.

Beneficiary consent can protect a purchase, but not always. Consent is effective only if every affected beneficiary is a competent adult, receives full disclosure of the asset's value and the terms, and agrees in writing. Consent does not bind minors, incapacitated beneficiaries or anyone who was not told the facts. Where any of those problems exists, the safer course is a petition for court approval of the sale. A purchase price backed by an independent appraisal helps, but it does not replace consent or court approval.

Joint Accounts, POD Accounts and Other Non-Probate Assets

Some property passes outside the will. The executor has no authority over it, and if the executor happens to be the named recipient, he may be entitled to keep it. This is one of the most common reasons beneficiaries believe an executor "took everything."

Non-probate assets include:

• Joint accounts with right of survivorship: Under Banking Law § 675, a joint account is presumed to pass to the surviving owner.
• Payable-on-death and Totten trust accounts: These pass to the named beneficiary under EPTL Article 7, Part 5.
• Transfer-on-death securities accounts: These pass under EPTL Article 13, Part 4.
• Life insurance, IRAs and 401(k)s: These pass to the designated beneficiary.
• Real property held jointly: Property held as joint tenants with right of survivorship, or as tenants by the entirety between spouses, passes to the surviving owner.

Being the named survivor is not the end of the question. The survivorship presumption can be challenged with evidence that the account was opened only for convenience, for example so a child could pay a parent's bills, and was never meant as a gift. Beneficiary designations and joint titling can also be challenged for lack of capacity or undue influence, particularly if they were changed shortly before death or while the executor held a power of attorney. If the executor withdrew money from the decedent's sole accounts before death using a power of attorney, those funds may be recoverable for the estate.

Executors also sometimes treat estate accounts as non-probate when they are not. An account in the decedent's sole name with no beneficiary is an estate asset. Our page on a bank account with no beneficiary after death explains how those accounts are handled.

Warning Signs and the Evidence to Gather

These patterns justify a closer look, along with the records that usually confirm or rule them out:

• No estate bank account: EPTL § 11-1.6 requires a fiduciary to keep estate property separate from his own and to hold it in his name as fiduciary. Ask for the name of the estate account and statements.
• No inventory: Surrogate's Court rules (22 NYCRR 207.20) require fiduciaries to file an inventory of assets with the court. Ask whether one was filed.
• Payments to the executor: Commission payments without a court order or your written consent, and "reimbursements" without receipts.
• Rent-free occupancy: The executor or his family living in estate property with no rent paid to the estate and no plan to sell.
• Unexplained withdrawals: Large cash withdrawals or transfers to family members, before or after death.
• Missing assets: Jewelry, vehicles, art or accounts that you know existed but that do not appear in any accounting.
• Refusal to share documents: No accounting, no copy of the will, and no answer to written requests after the seven-month period.

Useful evidence includes the Surrogate's Court file (the probate petition lists estimated assets and the court records when letters issued), the will, any deeds and the decedent's last bank statements in your possession. If the executor will not produce records, a discovery proceeding under SCPA § 2103 allows the court to compel his testimony and the production of bank and brokerage records. Keep copies of every written request you send. You are entitled to see the will in most circumstances; see are beneficiaries entitled to a copy of the will.

Remedies in Surrogate's Court

Each remedy below has its own page. In brief:

• Compelled accounting: Under SCPA § 2205, an interested party can ask the court to order the executor to account under oath for everything received and paid. See estate accountings.
• Discovery and turnover: SCPA § 2103 lets the estate identify and recover property held by the executor or anyone else. See discovery and turnover proceedings.
• Removal: SCPA §§ 711 and 719 allow removal of an executor who wastes or misapplies assets, commingles funds or disobeys court orders. See removing an executor or administrator.
• Surcharge: When the executor's breach causes a loss, the court can order him to repay the estate personally, with interest, and can deny commissions. See breach of fiduciary duty.

Not every dispute needs litigation. Some are resolved by a demand letter, an informal accounting or mediation. Our page on resolving beneficiary and executor conflicts covers those options, and inheritance disputes covers broader family conflicts.

When It Becomes a Crime

Under Penal Law § 155.05, larceny includes embezzlement: wrongfully taking or withholding property from its owner with intent to deprive the owner of it. Estate property belongs to the estate until it is distributed, so an executor who diverts it to himself can commit larceny even if he is also a beneficiary. Grand larceny begins above $1,000 and rises in degree at $3,000, $50,000 and $1,000,000 (Penal Law §§ 155.30 through 155.42). In New York City, felony prosecutions are brought by the county District Attorney and heard in Supreme Court, Criminal Term. A Surrogate's Court finding of misappropriation does not itself start a prosecution, but the facts developed in a turnover or accounting proceeding can support a referral.

If You Are the Executor

If a beneficiary has accused you of keeping estate property, the rules above protect you as much as they constrain you. Keep all estate money in an estate account. Do not pay yourself commissions until the beneficiaries consent in writing or the court approves them, and seek an order under SCPA § 2311 if you need them earlier. Charge yourself rent or get written agreement if you live in estate property. Get court approval or informed written consent before buying any estate asset. Before final distribution, give each beneficiary an informal accounting and obtain a signed receipt and release. If releases are refused, a judicial accounting lets the court approve your work and discharge you. If you are still in the early stages, see our page on letters testamentary.

Which Court Hears These Disputes

Estate disputes are heard in the Surrogate's Court of the county where the decedent lived at death. In New York City that is the Surrogate's Court for New York County (Manhattan), Kings County (Brooklyn), Queens County, Bronx County or Richmond County (Staten Island). We also appear in Nassau, Suffolk and Westchester. A compelled accounting can move relatively quickly if the executor cooperates. A contested accounting with turnover and surcharge claims often takes a year or more, depending on discovery and the court's calendar.

Frequently Asked Questions

How long does an executor have to distribute the estate in New York?

There is no fixed deadline to close an estate, but distributions are generally not expected before seven months from the issuance of letters. After that, a beneficiary can petition to compel payment under SCPA § 2102, and general pecuniary legacies paid late may carry interest under EPTL § 11-1.5. The executor may keep a reasonable reserve for taxes, claims and closing costs.

Can the executor pay himself commissions before the estate is settled?

Not on his own authority. Commissions are payable on settlement of the account, either through a judicial accounting or with the beneficiaries' written consent. Earlier payment requires a court order under SCPA § 2311. Self-paid advance commissions can be surcharged.

The executor says the bank accounts were joint and belong to him. Is that true?

It may be. A joint account with right of survivorship is presumed to pass to the surviving owner under Banking Law § 675. That presumption can be rebutted with evidence the account was a convenience account, or the joint titling can be challenged for undue influence or lack of capacity.

Can an executor who is also a beneficiary be charged with theft?

Yes. Until distribution, estate property belongs to the estate. Taking more than his share, or taking it before other beneficiaries are paid, can lead to surcharge in Surrogate's Court and potential larceny charges.

What should I do first?

Send the executor a written request for an informal accounting and the estate account statements. Check the Surrogate's Court file to confirm when letters issued. If you get no meaningful answer, speak with an estate litigation attorney about a compelled accounting or discovery proceeding.

Speak With a New York Estate Litigation Attorney

If an executor is keeping estate property, paying himself early or refusing to distribute, we can review the court file and records with you and explain which proceeding fits. We also represent executors facing accusations. Call the Law Offices of Albert Goodwin at 212-233-1233 or email [email protected].

This page provides general information about New York law and is not legal advice for any particular situation.