Typically, how long does the Estate Administration process last?
Beginning from your appointment as the Executor, the estate must remain open for at least seven months. Under New York law, this period is known as the creditor’s period. This period could be considerably longer if it is larger estate, requiring the filing of federal or state tax returns or if someone wants to contest the will.
What factors could increase the cost and time associated with administering the estate?
There could be many factors that potentially increase the amount of time and cost of the estate administration. Some of the most common factors include, minor beneficiaries, incapacitated beneficiaries, litigation, estate tax filing requirements, creditor’s claims, problems proving the validity of the Will to the Court’s satisfaction, charitable beneficiaries, accounting proceedings, and assets which are difficult to value and/or distribute fairly.
If I am named as the Executor under the will, after the death of the testator, how do I begin to administer the estate?
To begin the estate administration process, you must first file a petition with the appropriate Surrogate’s Court. Once the Surrogate’s Court receives the petition, they will determine if the Will is valid and if you are fit for appointment as a fiduciary.
Is the estate required to pay any fees to the Surrogate’s Court?
Yes, each proceeding commenced in the Surrogate’s Court will require the payment of a fee. This fee will vary based on the size of the estate and can range between $45 to 1,250.
Do Beneficiaries pay an income tax on their inheritance?
No, beneficiaries do not pay an income tax on their inheritance however, they are responsible to pay their share of any taxes on the post-mortem income earned on their inheritance.
Who may challenge the Will?
Although not common, the Will may be challenged by certain family members who survive the decedent called the distributees. Distributees are determined in the following order: spouse and children, parents, siblings and nieces and nephews, grandparents and 1st cousins, then great-grandparent and 1st cousins once removed. Also, certain persons unfavorably affected by the Will may challenge the Will.
When is the reading of the will?
Usually there is no formal “will reading” for the family. If you are the next of kin,
you hopefully are aware of the estate planning attorney that your family member
used. Please contact that attorney or law firm to inquire if there is a Last Will and
Testament and if you are the nominated Executor (person in charge of the estate)
named in the document.
What is Probate?
The process by which the ownership of the assets of a person who dies are transferred if there is no designated beneficiary.
How do we begin the process?
In New York a probate proceeding is commenced in the court known as the
Surrogate’s Court. Each county has its own Surrogate’s Court. To begin the process you will need the original Last Will and Testament, if one exists. If there is no Last Will and Testament, there are Estate Administration proceedings available to you as well in the Surrogate’s Court.
What does it mean if a bank or financial institution asks for “Letters Testamentary”?
Generally, if a bank or financial institution asks for “Letters Testamentary” it means that there is no designated beneficiary for that asset and you will need a court proceeding to collect the asset.
What does it mean to be a “Designated Beneficiary”?
If you are named as a designated beneficiary of an asset, the asset becomes yours
without a court proceeding.
How do I collect an IRA or an Annuity?
If you are named a beneficiary of an IRA or an annuity, you can collect the asset
with a death certificate and without a court proceeding. However, please have the
financial institution confirm two things: what are your options to collecting the
account; and what are the income tax consequences to the collection of the account?
How do I collect an Insurance Policy?
You should contact the insurance company who will provide a set of forms to collect the policy. You do not need a court proceeding to collect the policy if you are a designated beneficiary.
What are the tax implications of receiving an inheritance?
First, you should consult your tax preparer if you are a beneficiary of an estate. And, while the distribution of the actual inheritance may not be an income event for you personally, the distribution may in fact “carry out” either the income or the excess deductions of an estate to you which must be included on your personal income tax return. In addition, as a beneficiary of the estate, you may share in the estate taxes that may be owed to the IRS or NYS. Again, please be mindful of any assets that you are collecting or receiving and consult a tax professional before you make any decisions!
What if there is no Last Will and Testament?
If there is no Last Will and Testament, you will commence an administration
proceeding and the law will designate who will inherit the estate.
What are the costs involved of Probate?
There are court filing fees that are determined by the value of the estate, as well as attorney fees to prepare the court filings. Please have the attorney you choose to assist you advise you of these costs prior to their commencing any work on your or the estate’s behalf.