The death of a loved one is one of the hardest events in life. While managing the personal and emotional struggles following the loss, there are many legal and financial issues that must be handled. Such complex proceedings can be difficult for anyone, and they are even harder to get through while grieving for the loss of your loved ones. The Law Office of Stephen Silverberg can help. We can serve as the representative for the estate and be the guiding hand you need in a difficult time.
The first step in estate administration is getting a fiduciary or estate representative appointed by the Surrogate’s Court of the county where the decedent lived. This estate representative is the person who will be tasked with gathering the assets of the estate, paying any estate creditors and managing claims, and distributing assets to the estate beneficiaries. The exact procedure for the appointment of this estate representative depends upon whether or not the decedent had a Will.
Those who have passed away without previously executing a Last Will and Testament during their lifetime have their assets distributed according to the laws of intestacy. New York State law has a statute that addresses who will receive assets depending on whether or not the decedent was survived by a spouse, children, parents, siblings, or cousins.
Similarly, another statute dictates who has preference to be appointed administrator of the estate, with the surviving spouse having the highest priority. Anyone wishing to be appointed as administrator of the estate will need the petition the Surrogate’s Court to be appointed. Any person with rights to be appointed equal to or greater than yours may consent to your appointment or you can have the court issue a legal notice called a citation, which gives those people the ability to object to your appointment if they wish.
People who pass away having executed a Last Will and Testament during their lifetime will have said Will submitted to the court for probate. Probate is the process of the court approving the executed document as the official Last Will and Testament of the decedent, stating it is valid to pass the assets of the estate according to the terms of the Will.
Whereas intestate estate assets pass directly to family members according to the statute, testate estate assets pass to the beneficiaries designated in the Will. This could be family, friends, trusts created for the benefit of friends and family, or charities. Similarly, where the estate administrator in intestate estates is appointed by priority under the statute, a Will can nominate anyone to be executor of the estate, and this person will be the one to petition the court for probate.
People who have their assets owned by a Revocable Trust (sometimes called a Living Trust) will still need the trust administered similarly to any other estate. The biggest difference between Trust Administration and Estate Administration is in the fiduciary appointment stage. While estates need someone to petition the Court for appointment of the estate representative, Revocable Trusts appoint successor trustees to act as fiduciary who can begin acting without Court approval upon the death of the decedent.
Financial Asset Administration
The main part of Estate Administration is the financial management of the estate. This part is generally exactly the same, whether there is a Will, Revocable Trust, or no testamentary documents. The financial management of the estate mainly breaks down into three portions: gathering estate assets, paying estate debts and creditors, and distributing assets to beneficiaries.
Gathering Estate Assets
The gathering of estate assets is the first thing an estate fiduciary must do for the estate. This can first include closing checking and savings accounts and opening an account for the estate. The fiduciary will also take title of any stocks or brokerage assets of the decedent in the name of the estate. The fiduciary will need to claim the benefit for any life insurance policies or annuities payable to the estate. And most importantly, the fiduciary needs to manage and potentially sell any real property owned by the decedent, including the decedent’s home.
Paying Estate Debts and Creditors
Before an estate representative can distribute assets to beneficiaries, estate debts and creditors must be paid. If an estate representative distributes assets to beneficiaries when they know there are unpaid estate debts and creditors, they can be held personally liable for the debts. Estate debts and creditors can include a wide range of things, including credit card debt, student loans, final income taxes, final medical bills, and funeral expenses.
Distributing Assets to Beneficiaries
Once all assets are collected and debts are paid, the assets can be distributed to beneficiaries. As part of this process, before actually turning over the assets to the beneficiaries, it is important to prepare an accounting of the estate to the beneficiaries to show the assets collected, debts paid, and moneys to be distributed to beneficiaries. This can be done informally or judicially through the court. If the beneficiaries agree on the final distribution they are to receive, they will sign an agreement that they stating as such and releasing the estate representative from any liability with regards to the estate.