Estate Accounts in New York: How to Open and Manage One

Authored by Albert Goodwin, Esq., a New York estate attorney admitted to practice in New York. Last updated: June 2024. This article is general legal information, not legal advice for your particular situation.

An estate account is a dedicated bank account opened in the name of a deceased person's estate and managed by the court-appointed fiduciary — the executor (if there is a will) or the administrator (if there is not). It exists for one purpose: to hold and move the decedent's money separately from anyone's personal funds while the estate is being settled in the New York Surrogate's Court.

Under New York law, a fiduciary holds estate property in a position of trust. Section 11-1.6 of the Estates, Powers and Trusts Law (EPTL) flatly prohibits a fiduciary from mingling estate funds with their own money. Keeping estate cash in a properly titled estate account is the primary way executors and administrators comply with that statute and avoid personal liability.

What goes into an estate account?

Once you are appointed, you should deposit any money that belongs to the decedent or the estate into the estate account, including:

• Checks made payable to the decedent (for example, a final paycheck or refund).
• Funds collected from the decedent's solely-owned bank accounts. (If a bank account has no named beneficiary and no joint owner, see our page on a bank account with no beneficiary in New York.)
• Rent collected on real property owned by the estate.
• Interest, dividends, and proceeds from selling estate assets.
• Refunds, settlements, and other money owed to the decedent.

When it is time to pay beneficiaries, distributions are normally made by checks drawn on the estate account, which creates a clean paper trail for the accounting you may have to file in Surrogate's Court.

Do I need an estate account if I am settling an estate in New York?

Most executors and administrators in New York do open one. You may not need an estate account if there is no cash to collect — for example, where the only asset is real estate that passes by a deed or where every financial account already had a named beneficiary or joint owner and passed outside the estate.

One important New York exception is voluntary administration (often called small estate administration) under Article 13 of the Surrogate's Court Procedure Act (SCPA). When the decedent's personal property is worth $50,000 or less (excluding real estate), the voluntary administrator can collect assets using a small estate affidavit and a certificate, and a bank will frequently release funds without requiring a separate estate account. For larger estates that go through full probate or administration, an estate account is almost always necessary.

How do I get a tax ID number (EIN) for the estate?

A bank cannot open an estate account under the decedent's Social Security number, because that number is retired at death. Instead, the estate is treated as a separate taxpayer with its own Employer Identification Number (EIN), the same kind of number a business uses. The fiduciary applies for it on IRS Form SS-4.

1. Go to the IRS EIN application page.
2. Select “Estate” as the type of entity.
3. Enter the decedent's name and Social Security number, the date of death, and your information as the fiduciary.
4. The EIN is issued immediately online; print or save the confirmation letter (CP 575), which the bank will want to see.

The estate's income (interest, dividends, gains) is reported under this EIN, generally on a federal Form 1041 and the corresponding New York fiduciary return when filing thresholds are met.

How do I open the estate account, and what do I bring?

You open the account in person at a bank. Many large New York banks — Chase, Citibank, Bank of America, TD Bank, and others — open estate accounts, but not every branch teller handles them often, so it helps to ask for a banker or branch manager. Bring:

• Your personal photo identification (a driver's license or passport), because the bank must identify the person signing.
• Your court-issued appointment papers with a raised seal — certified Letters Testamentary if there is a will, or certified Letters of Administration if there is not. The bank wants to confirm you currently have authority.
• The estate's EIN confirmation letter from the IRS.
• A certified copy of the death certificate (frequently requested).

Restricted versus unrestricted estate accounts in New York

In some New York cases the Surrogate's Court limits the fiduciary's control over estate money. When Letters are issued, the court may impose restrictions — for example, requiring that funds be held in a restricted account from which no withdrawal can be made without a further court order. This is common where the fiduciary was not required to post a bond, or where the court wants added protection for beneficiaries or minors. An unrestricted account lets the fiduciary deposit and withdraw to carry out estate business. Always read your Letters carefully; they will state any restriction, and the bank will enforce it.

Why you cannot rush distributions: the 7-month creditor period

New York gives creditors time to come forward before an estate is distributed. Under SCPA 1802, a creditor generally has seven months from the date Letters are issued to present a claim against the estate. A fiduciary who distributes assets before that window closes, and before known debts and taxes are paid, can be held personally liable to creditors who are left unpaid. EPTL 11-1.5 governs payment of claims and the order in which they are satisfied.

Because of this, an executor should not simply hand out money the moment it lands in the estate account. The safer practice is to keep funds in the account, pay valid debts, taxes, and administration expenses, obtain signed receipts and releases (waivers) from the beneficiaries, and only then distribute the remainder.

Can I just retitle the decedent's accounts to the beneficiaries instead?

Sometimes. If a financial institution permits it, the fiduciary may transfer (retitle) a decedent's account directly to the beneficiaries entitled to it — either as the will directs or, in an intestate estate, according to New York's distribution rules in EPTL 4-1.1. Even then, you should follow the same safeguards: confirm debts and taxes are addressed, wait out the creditor period, and obtain signed waivers and releases. Skipping these steps does not save time if a creditor or a beneficiary later challenges what you did.

What happens if a fiduciary commingles or withdraws estate funds?

The estate's money does not belong to the executor or administrator — they merely manage it for the beneficiaries. Taking estate cash for personal use can be embezzlement and exposes the fiduciary to criminal and civil liability. Even innocent mistakes carry consequences: if the fiduciary mismanages or commingles funds, a beneficiary can ask the Surrogate's Court to impose a surcharge, ordering the fiduciary to repay the estate from their own pocket for any loss, and to seek the fiduciary's removal for breach of fiduciary duty.

This is why the accounting matters. At the close of administration, the fiduciary is generally expected to account for every dollar that came into and went out of the estate. A clean estate account makes that accounting straightforward; commingled funds make it nearly impossible to defend.

Estate account vs. personal account at a glance

Frequently asked questions

Can an executor withdraw cash from an estate account for themselves?

No. The funds belong to the estate, not the executor. A fiduciary who takes estate money for personal use can face a surcharge, removal, and criminal exposure for embezzlement. The executor is entitled to statutory commissions under SCPA 2307, but those are paid through the proper accounting process, not by helping themselves to the account.

Can an executor deposit their own money into the estate account?

No. Mixing personal funds with estate funds is exactly the commingling EPTL 11-1.6 prohibits. Keep the accounts entirely separate.

Does a small estate in New York need an estate account?

Often not. If the decedent's personal property is $50,000 or less, voluntary administration under SCPA Article 13 may let you collect assets with a small estate affidavit, and banks frequently release funds without requiring a separate estate account.

How long should funds stay in the estate account before distribution?

At minimum until the seven-month creditor period under SCPA 1802 has run and all known debts, taxes, and expenses are paid. Distributing earlier can make the fiduciary personally liable.

Speak with a New York estate attorney

Opening and properly managing an estate account is a core duty of an executor or administrator under New York law. Done correctly, it protects you from personal liability and makes closing the estate faster. If you have questions about an estate account, the broader estate administration process, or your responsibilities as a fiduciary, you can call New York estate attorney Albert Goodwin at 212-233-1233.