Call Today: 212-233-1233

Estate Account in a New York Estate

Do I Have to Open an Estate Account?

Opening an estate account in New York is required in most cases. The estate account serves as a repository for the deceased's assets before they are distributed to the rightful beneficiaries. Regardless of the estate's size, opening an estate account is a prudent decision. Executors and administrators are prohibited from mixing their personal assets with those of the estate, and an estate account provides the most effective safeguard against commingling. Moreover, an estate account simplifies the process of accounting to beneficiaries and expedites the closure of the estate.

How Do I Open an Estate Account?

When an estate has cash and assets (that can be sold and liquidated to cash), the fiduciary must obtain an Employer Identification Number (EIN) from the IRS. The EIN functions as a social security number for the estate entity and is essential for opening a bank account in the estate's name. To open the estate bank account, the fiduciary will need to provide the EIN, certified letters testamentary or of adminsitration, and a certified copy of the death certificate.

Executors or administrators often rush to open an estate bank account, thinking that unclaimed assets will automatically go to the State of New York by escheat. But this is not true. Escheat only happens when there is no heir to inherit in accordance with law. Instead, after a year of no activity in the deceased's bank account, the banks move the money to New York Unclaimed Funds, which is managed by the Office of the Comptroller. Getting money from Unclaimed Funds takes longer, usually 90-120 days, as opposed to getting it straight from the bank withiin 1-2 days, for as long as you have the letters. To prevent the money from going to Unclaimed Funds, your NY estates lawyer can apply for preliminary or temporary letters, despite ongoing probate litigation such as will contests that could delay the issuance of the regular letters testamentary or administration.

Managing an Estate Bank Account

A fiduciary's primary responsibilities include collecting assets, settling debts, and distributing the assets to the decedent's beneficiaries or heirs-at-law. Before distribution, the fiduciary must pay ordinary and necessary expenses using the estate bank account. These expenses may include monthly mortgage payments, co-op maintenance charges, junk removal, utilities, decedent's debts, taxes, legal fees, and other essential costs related to the estate or estate property.

All withdrawals and payments must be properly accounted for. Prior to distribution, our law firm prepares an informal accounting based on bank statements and receipts provided by the fiduciary. This document itemizes all collected assets, paid expenses, fiduciary commissions due, legal fees, and the final distribution amounts owed to the heirs or beneficiaries named in the will. The accounting is then circulated to the parties for review and approval. If any beneficiary or heir has serious concerns about the management of the estate bank account, it may lead to a judicial accounting, which is a time-consuming and costly process.

When withdrawing funds from an estate bank account, it is crucial to minimize cash withdrawals. While paying in cash may sometimes be unavoidable and cost-effective, such as when hiring a local handyman or cleaning lady, it is best practice to maintain a paper trail by paying by check or obtaining an invoice to substantiate cash withdrawals. Fiduciaries often encounter problems when they withdraw advances of their inheritance and/or executor commissions from the estate bank account. It is strongly advised not to withdraw any advances without first consulting with your NY estates lawyer. Additionally, if you receive notices of any debts owed by the decedent, consult with your NY estates attorney to ensure that only legitimate debts are paid.

Closing an Estate Bank Account

Depending on the estate's value, it is advisable to maintain a contingency fund in the estate bank account for a period of one year following the distribution of assets. This fund serves as a safeguard against any unforeseen liabilities that may emerge during this time. The size of the contingency fund should be proportional to the overall value of the estate.

If you require expert guidance in estate planning matters, the Law Offices of Albert Goodwin, situated in the heart of Midtown Manhattan, New York, NY, is well-equipped to provide you with tailored solutions. You can call us at 212-233-1233 or send us an email at [email protected].

Attorney Albert Goodwin

About the Author

Albert Goodwin Esq. is a licenced New York attorney with over 17 years of courtroom experience. His extensive knowledge and expertise make him well-qualified to write authoritative articles on a wide range of legal topics. He can be reached at 212-233-1233 or [email protected].

Albert Goodwin gave interviews to and appeared on the following media outlets:

ProPublica Forbes ABC CNBC CBS NBC News Discovery Wall Street Journal NPR

Client Reviews

Verified feedback from our clients

Mr. Goodwin is everything you want in an attorney: professional, honest, thorough, and genuinely caring. He always explains things clearly, so I understood exactly what was happening and what to expect next. His attention to detail and persistence really stood out. Looking back, I feel lucky to have found him. He guided me through the whole process expertly, and I deeply appreciate all his hard work. Would definitely recommend him to anyone needing legal help.

Sarah M

Legal Services

Thanks to Mr. Albert Goodwin's hard work and smart thinking, I finally won my case, which has been a long time coming. He figured out solutions that no one else could see. I'm really impressed by his strong ethics - something that's rare these days. As my lawyer, he went above and beyond what I expected. I'm so grateful I found him and would definitely recommend him to anyone needing legal help.

Lawrence H

Legal Services

From our first meeting, I knew I was in great hands with Albert and his associate Katrina. They handled my case with incredible skill and efficiency, even though they took it over from another firm. What impressed me most was how quickly Albert responded to my questions with honest, clear answers - no sugarcoating, just straight talk. They managed a huge workload under tight deadlines, and their fees were very reasonable for such high-quality work. Beyond his legal expertise, Albert's wit and personality made a difficult process much easier to handle. I'm deeply grateful for their hard work and would absolutely choose them again. If you need legal help in New York, you won't find better representation than Albert's firm.

Adam F

Legal Services

VIEW MORE
New York State Bar Association Member Badge New York City Bar Association Member Badge American Bar Association Member Badge Avvo Rated Attorney Badge