What is Estate Administration in New York City

Estate administration involves identifying assets, paying any outstanding debts and taxes, and distributing the remaining assets to the heirs or beneficiaries. The rules of estate administration in New York can be complex with rigid procedures and deadlines that must be met.

To minimize any risk of incurring liability due to estate mismanagement, hiring an experienced New York estate administration attorney is highly recommended in settling an estate. An attorney well-versed in New York estate administration law can help guide you through the process, communicate with the Surrogate’s Court, navigate estate issues, and ensure proper distribution of assets to beneficiaries.

Small Estate vs. Formal Estate

The first step of estate administration is determining what kind of probate process will need to be filed in your case.

If the probate estate is not greater $50,000 and does not have any real property, it is a small estate to be managed under voluntary administration.

If the probate estate is greater than $50,000 and/or it owns real property:

• Petition for probate if the deceased died with a will.
• Petition for administration if the deceased died without a will.

Apply for Letters of Administration

You get letters of administration from the probate court. In New York, this court is called the Surrogate’s Court. You can have an attorney assist you with the process.

Gathering Assets and Paying Debts

To administer the estate, the executor or administrator must gather the deceased’s assets and pay the deceased’s debts.

Once the executor or administrator is appointed:

• The executor or administrator has six (6) months to file an inventory listing the decedent’s real and personal property.
• Creditors are given seven (7) months to file their claim with the estate.

The executor or administrator must diligently work to identify and gather all of the decedent’s assets that will make up the estate. If the deceased’s property is held by a third person, the executor or administrator can file discovery and turnover proceedings to recover such asset.

The executor or administrator also has to pay the deceased’s legitimate debts and taxes in a timely manner. This involves paying any outstanding debt obligations, funeral costs, medical bills, and the like. It may also involve filing the deceased’s final income tax returns.

Filing Estate Tax Returns

In addition to paying any outstanding taxes owed by the deceased, the executor or administrator may have to file estate tax returns and pay taxes if the value of the estate is above the exemption amount. As of January 2024:

• The federal estate tax threshold is $13.61 million.
• The New York estate tax threshold is $6.58 million.

Closing the Estate

Once assets have been gathered and all debts have been paid, the executor or administrator will prepare a final account showing all holdings, transactions, income and distributions made by the estate. This account is submitted to the beneficiaries or heirs for their approval.

Approved: the beneficiaries or heirs sign receipts and releases and they can then receive their distributions.

Disapproved: the executor or administrator will submit an accounting to the court for approval.

Properly administering an estate is a complex, legal process with many requirements to be aware of. Having a knowledgeable estate administration attorney can minimize any risk of making costly mistakes. Should you need legal help with estate administration in New York, we at the Law Offices of Albert Goodwin are here for you. We are located in Midtown Manhattan in New York City. You can call us at 212-233-1233 or send us an email at [email protected].

The First Steps After a Death

Immediate steps after a family member's death typically include:

• Obtaining the death certificate. Multiple certified copies will be needed for banks, insurance, and government agencies.
• Securing the decedent's residence. Locking up the home, securing valuables, and continuing essential services like insurance.
• Locating the will. Searching the home, contacting the drafting attorney, and checking the safe deposit box.
• Notifying Social Security and pension administrators about the death.
• Notifying the decedent's employer if applicable.
• Identifying who will serve as executor or administrator and initiating contact with an estate attorney.

These steps happen quickly, often within days of the death. They lay the groundwork for the formal estate administration that follows.

The Petition Stage

The petition is the first formal document filed in the Surrogate's Court. Whether it is a petition for probate (with a will) or a petition for administration (without), the document includes:

• Identification of the decedent and the date of death.
• The relationship between the petitioner and the decedent.
• The proposed executor or administrator.
• A list of distributees who would inherit by intestacy.
• Information about the estate's assets.
• The will itself, if any (or affidavits if a copy is being probated).
• Citations or waivers from interested parties.

The petition is filed with supporting documents and the filing fee. The court reviews the petition for completeness, issues citations to interested parties who have not waived, and ultimately appoints the personal representative.

Issuance of Letters

The court issues letters testamentary (for executors) or letters of administration (for administrators) once the petition is approved. The letters are the formal grant of authority that allows the personal representative to act. The letters typically state:

• The personal representative's name.
• The capacity in which they act (executor, administrator, c.t.a., d.b.n.).
• The date of issuance.
• Any limitations on the letters (limited letters may restrict specific actions).

Certified copies of the letters are provided to the personal representative, who presents them to banks, brokers, and other institutions as proof of authority.

Marshalling Assets

With letters in hand, the personal representative begins the work of "marshalling" or gathering the estate's assets. This involves:

• Opening an estate bank account at a major bank.
• Closing the decedent's individual accounts and transferring the funds.
• Collecting life insurance proceeds payable to the estate.
• Transferring brokerage accounts.
• Taking control of safe deposit boxes.
• Securing real estate, including changing locks and maintaining insurance.
• Identifying and collecting any other assets the decedent owned.

This phase typically takes several months. Some assets transfer quickly; others require extensive paperwork and follow-up.

Working with the Court's Calendar

The court's calendar affects the timing of administration. Each county's Surrogate's Court has its own processing times and procedures. The personal representative and counsel adapt to:

• The time required for petition review.
• Return dates for citations.
• Hearing schedules for contested matters.
• Deadlines for inventory, accounting, and other required filings.
• Backlogs in particular courts.

Manhattan tends to be faster than the outer boroughs. Filings prepared correctly the first time avoid bounce-backs that add weeks or months.

Common Surprises During Administration

Several issues frequently surprise families during administration:

Hidden debts. The decedent had debts the family did not know about. Credit cards, medical bills, business obligations, or other liabilities surface as creditors are notified.

Missing assets. The decedent had accounts the family did not know about. Sometimes these surface through tax records, sometimes through unclaimed property searches, sometimes through investigation by the personal representative.

Asset transfers during life. The decedent transferred property during life under circumstances the family questions. These transfers may need to be challenged through discovery and turnover proceedings.

Family disputes. Family members who got along during the decedent's life may become adversarial during the estate. Each side wants their interests protected.

Tax complications. The estate's tax position turns out to be more complex than initially expected. Estate tax returns, audits, and disputes consume time and resources.

The Personal Representative's Liability

Throughout the administration, the personal representative remains a fiduciary subject to personal liability for mistakes. The most consequential exposures:

• Distributing before paying creditors (the personal representative may have to make up missing creditor payments from personal funds).
• Failing to file required tax returns or pay taxes.
• Mismanaging investments through neglect or improper decisions.
• Self-dealing or conflicts of interest.
• Failing to keep adequate records.

Engaging counsel and following advice protects against most of these exposures. Going it alone, especially for substantial estates, is risky.