Probate and Estate Administration

This is the second article continuing What is Probate?

The last article left off with an interested party filing paperwork and paying filing fees with Surrogate’s Court to “open” an estate for a person who has passed. Let’s move forward to the stage of a fiduciary appointment.

Letters Testamentary or Letters of Administration

If there is a will and an executor is then appointed, we will have Letters Testamentary granted by the Court. If there is no will and an administrator is then appointed, we will have Letters of Administration granted by the Court. Certificates will also be issued, upon request, and these certificates are then used as proof of authority for the fiduciary to act on behalf of the estate. Again, in either case, various requirements must be met depending on the facts and circumstances of the estate. Getting to the point of an executor or administrator appointment can be the first foray into “probate” either being “not so bad” or “the worst”. Like I say, “it all depends”.

Preliminary or Temporary Appointments

Prior to the stage of an executor or administrator being appointed, there may be preliminary or temporary appointments desired and obtained, depending on the matter, and the anticipated delays and the many concerns within the estate. From the first article, I mentioned that there can be any number of delays before an executor or administrator is appointed, so the need for a temporary or preliminary appointment should be assessed with additional papers filed, if deemed necessary or beneficial for the estate.

Estate Administration

After the executor or administrator appointment, the estate administration must be handled (or continued to be handled if preliminary or temporary appointments were in place) with the fiduciary acting in the best interest of the estate itself, which includes creditors and those who will ultimately benefit from the estate.

In New York, there is a seven-month creditor period after the fiduciary appointment in which the fiduciary cannot close the estate until such period has run. There are various nuances here in regard to claims being pursued even after the seven-month creditor period.

An Inventory of Assets, and Firearms Inventory if necessary, need to be appropriately filed (with special attention to handling the firearms themselves). The Inventory of Assets provides information on estate assets and values and other information. At this point, the filing fees owed to Surrogate’s Court may change from the initial filing fees paid based on what is discovered by the fiduciary in regard to the value of the estate with either additional filing fees owed or a refund being issued.

The fiduciary continues to work with his/her/its' attorney to move estate administration matters forward diligently with any number of matters and issues in the mix, including:

• Determining how mail should be handled, including needing it forwarded and to whom

• Ensuring claims are being run through insurance, including Medicare, private insurance or casualty insurance

• Handling canceling credit cards, club memberships, magazine subscriptions, etc. and obtaining refunds, as appropriate

• Determining if there are any outstanding orders to buy/sell stocks and handling as appropriate

• Making sure any vehicles owned by the decedent are properly handled (we are concerned about potential liability the estate may incur and need to take appropriate actions)

• Handling personal property appropriately (there can be a myriad of potential concerns here)

• Obtaining an accurate understanding of the decedent’s assets

• Continuing/obtaining insurance on estate assets, such as vehicles, homeowners, etc. in the name of the estate, and, as appropriate

• Determining what assets legally pass through the estate

• Reviewing retirement accounts, brokerage accounts, bank accounts, annuities, pensions, credit union accounts, Health Savings Accounts, life insurance, CD’s, bonds, stocks, and other potential assets, including intellectual property rights and so on

• Determining what auto-deduction withdrawals are being made through the decedent’s bank accounts and how to properly handle same

• Determining ongoing estate expenses, including those associated with real estate

• Valuing/appraising assets, as appropriate

• Handling cryptocurrency, as appropriate

• Handling digital assets, as appropriate

• Obtaining date of death values on assets, as appropriate

• Collecting assets, as appropriate

• Determining the overall creditors of the estate, assessing creditor claims, and whether the estate will be able to pay all creditors’ claims, as appropriate (note: non-probate assets may be subject to pay such claims in some instances)

• Assessing income taxes, what has been filed/what needs to be filed

• Assessing gift tax return filings and/or gifts/transfers made in contemplation of death

• Assessing real property needs, which could include any number of issues given the type of real property including the decedent’s personal residence, other residential real estate, commercial real estate, real estate owned by a business of which the decedent held an interest, a summer or winter home or farmland, and those of which the decedent held an interest as a tenant-in-common owner, etc.; matters to be considered include appraisals, insurance, repairs, leases, who may be living in any real property, the desire or need to sell real estate, liens on the properties including mortgages, etc.

• Managing business interests and handling potential concerns in that context, including determining if any buy-sell agreements or other agreements exist

• Establishing an estate checking account

• Determining if the estate will be unable to meet all its’ financial obligations, including the bequests made in a will

• Working with out-of-state attorneys for ancillary proceedings, if needed

• Working with appropriate parties for guardianship appointments for minors or others, as appropriate

• Determining if a trust shall be set up, pursuant to the provisions of the will

• Interpreting the will, as appropriate

• Filing an Inventory of Assets (and Firearms Inventory, if needed)

• Handling tax returns for the estate (including estate tax returns and fiduciary income tax returns)

• Re-titling estate assets into the name of the estate, as appropriate

• Selling estate assets, as appropriate

• Accounting to proper parties

• Preparing closing paperwork, including receipt and releases

• Distributing property

• Closing the estate

Along the way there could be matters being handled and/or issues that arise, whether with interpreting the will, an uncooperative party, a right of election claim, a wrongful death proceeding or personal injury action, a creditor issue, a beneficiary or distributee passing after the decedent, handling the decedent’s business interests, the fiduciary him/herself passing after appointment, claims of bad actions by the fiduciary and other matters and issues.

There can be further proceedings in Surrogate’s Court within the estate administration process, and for each such proceeding, personal jurisdiction over the necessary parties must also be obtained.

Each Estate is Different

Given each estate is different, when someone asks how easy or difficult estate administration may be, the answer is, of course, “it all depends”.

The entire process of administering an estate depends on the various factors involved, from the people involved, to the assets and debts, to the governing legal documents and so on. It is not the size of the estate that alone determines how easy or difficult the estate administration may be. Sometimes, relatively small estates have tremendous difficulties due to various factors, whether that be due to warring siblings, creditors or a number of other factors.

The issues that can be encountered during the course of estate administration can be another “eye-opening” part of “probate” for those involved.

Stay tuned for the third article where I will review some of the issues that can give rise to problems with probate and estate administration.