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Estate Planning Essentials

In my family law practice, I often encounter families struggling and in conflict because of the passing of a family member who died without a will (or trust agreement) specifying how to distribute the deceased person’s property and assets.  It is widely reported that in the U.S. more than one half of the adult population is without a Last Will and Testament (or a trust agreement) that specifies how to distribute an estate after death.   This means that in the event of death, the deceased person’s assets and property will be distributed by court order, according to specific legislative guidelines, and not necessarily in accordance with the wishes of the deceased.

This guidance is intended to provide basic information about estate planning laws in New York, to describe the essential value of estate planning, and to offer some suggestions concerning how to proceed with an estate distribution plan to meet your needs and the needs of your family.

While it is not essential to seek legal advice in planning your will, there are many complex issues and requirements that are difficult to fulfill with certainty without professional assistance.  I am available for consultation free of charge and will be happy to assist you and your family to prepare for the distribution of your estate according to your specific wishes.

In New York State, the law governing wills and estates is named the Estates, Powers & Trusts Law– also known as EPTL.   Click here to view the law in its entirety
https://www.nysenate.gov/legislation/laws/EPT/A1P1

This law is summarized at the NYcourts.gov web site, found at this address: http://nycourts.gov/courthelp/WhenSomeoneDies/index.shtml

Excerpts from the NYCourts summary are included in this guidance:

What Happens to a Person’s Property When that Person Dies?

The Surrogate’s Court decides what happens to a person’s property in New York when that person dies.

The judge in Surrogate’s Court is called the Surrogate. The person who died is called the decedent. That person’s property is called the estate.

A person who dies with a will in place is designated testate

A person who dies without a will in place is designated intestate

Estate Proceedings

There are three distinct estate proceedings in Surrogate’s Court, depending upon circumstances:

  1. If the decedent had less than $30,000 of personal property* the family would file for a small estate,** also called a voluntary administration.

(*Personal property is:  possessions, other than real property, that belong to a person such cash, bank accounts, bonds, car, boat, and artwork.  A house and land are examples of real property.

  1. If the decedent had a Will, the family would file for probate***
  2. If the decedent did not have a Will, then the family would file for administration****

**Small Estate
This is also called a voluntary administration. If a person died with less than $30,000 worth of personal property, then a small estate can be filed. This is a the simplest and least expensive way of dividing a Decedent’s estate. It doesn’t matter if there is a Will or not.

***Probate
If a person dies with a Will in place, then the proceeding filed is called probate and the property is divided according to the Will. When a decedent had a Will, it must be filed in Surrogate’s Court and admitted for probate. During probate, the Will is proved to the satisfaction of the court that it represents the Last Will and Testament of the person who died. When the Surrogate (the judge in Surrogate’s Court) is convinced of the validity of the Will, the Executor named in the Will is appointed to distribute the estate and carry out the wishes of the person who died. The Surrogate’s Court oversees this entire process.

Filing for Probate by the Executor

The Executor files the original Will and a certified copy of the death certificate with the probate petition and other supporting documents.  These are filed in the Surrogate’s Court in the county where the decedent had their primary residence.  The Executor  may be able to file the papers over the internet using NYSCEF, the New York State Courts Electronic Filing system. Check this possibility on the e-filing County List for your Surrogate’s Court.

The decedent’s distributees (heirs) must also be listed in the probate petition. Distributees must be served with a notice, formally called a citation that provides the Surrogate’s Court jurisdiction over them. This means that the Surrogate Court has the authority to determine the rights of the people involved. A citation tells the distributee that the Executor filed for the authority to manage the decedent’s estate. The distributee can sign a waiver and consent to the appointment of the Executor or come to court to disagree with the appointment. Beneficiaries who will inherit something under the will must be notified of the probate proceeding.

Probate proceedings can be very complicated and often justify retaining legal counsel.  Consider carefully whether to seek counsel given the importance of the inheritance issues relative to the cost of legal services.  If you consult with me, I will be able to give you information about legal costs and benefits, including the fees for filing the probate.  

Definitions: Terms used in Probate Proceedings

Last Will and Testament

A Last Will and Testament is also called a Will. A Will is a written statement concerning how a person wishes to distribute property and assets after death.

A Will can have directions for how property should be divided and it names an Executor to carry out those wishes. Wills can also appoint a guardian for children of the deceased.

A person’s Will should be kept in a safe and accessible place.  In some counties, the Surrogate’s Court has a vault where Wills are stored for safekeeping until the person dies.

The Will must be filed in Surrogate’s Court and admitted for probate before the wishes of the person who died can be followed. If the person who died had less than $30,000 of personal property, then a small estate (also called a voluntary administration) can be filed instead, as described in this guidance.

Wills are a confidential document until the person dies. Once the Will is admitted to probate or a small estate, it becomes a public document that anyone can see and read.

Fiduciary of the Estate

After a person dies, the decedent’s property (also called the estate) must be divided.

Depending on what kind of estate proceeding was filed, the fiduciary is called by different names:

  • In a probate proceeding, this fiduciary is the Executor. This person is named in the Will.
  • In an administrative proceeding, the fiduciary is the Administrator. In general, this is the closest relative to the person who died.
  • In a small estate proceeding, also called a voluntary administration, the fiduciary is the Voluntary Administrator. In general, this is the closest relative to the person who died or the named Executor if there is a Will.

The fiduciary is appointed by the judge in Surrogate’s Court and may be represented by a lawyer.

 Duties and Responsibilities of the Fiduciary

Executors, Administrators, and Voluntary Administrators are fiduciaries who have a legal duty to act faithfully towards the estate.  Fiduciaries may not advance their interests ahead of their duty to fulfill the legal directives of the estate.

Executors must carry out the wishes of the person who died as stated in the will.

Administrators and Voluntary Administrators must settle the estate according to New York State laws of intestacy.*****

Fiduciaries are responsible for protecting the property until all debts and taxes are paid and to promptly and efficiently administer the estate.  The Surrogate’s Court may require that a fiduciary be bonded.  Bonding is equivalent to an insurance policy that provides security for the estate’s assets.

In general, fiduciaries have three responsibilities:

  1. Collect, inventory, and appraise all the assets of the estate.
  2. Pay the bills, taxes, estate expenses, and creditors of the person who died.
  3. Transfer property according to the will or, if there is no will, then according to the law.

*****NY York State laws of Intestacy: When There is No Will

When a person dies without leaving a Last Will and Testament, it is said that the person  died intestate. The property of intestate individuals is distributed according to provisions  found in EPTL 4-1.1.

The family members who are entitled to a share of the decedent’s estate when there is no Will are called “distributees”.  The distributees’ share of the estate depends on the living relatives’ relationship to the decedent.  Simply stated:

If the decedent has a spouse and no children, the spouse inherits everything

If the decedent has children but no spouse, the children inherit everything

If the decedent has a spouse and children, the spouse inherits the first $50,000 plus one half of the balance of the estate.  The children inherit everything else.

If the decedent has siblings (brothers or sisters) but no spouse, children, or parents, the siblings inherit everything

Note concerning deceased children of the decedent:  If a decedent’s child dies before the decedent and had children, then the decedent would have grandchildren who would step into the decedent’s child’s place and inherit in place of the deceased child.

About Decedents’ Children

For children to inherit from their parents, New York State requires that there be a legal parent-child relationship. Usually this is clear, but there can be complications:

  • Adopted children will inherit just like a biological child.
  • Foster children and stepchildren will not inherit unless they were legally adopted.
  • Children born after the decedent dies will inherit.
  • Children born outside of marriage, also called non-marital child, will inherit from a male decedent if paternityis established
  • Grandchildren will inherit only if their parent (the decedent’s child) dies before the decedent died.

If the decedent has no family at all, then the property will be claimed by New York State.

Who Can File an Estate Proceeding?

If there is a Will, then the Executor named in the Will files for probate or a small estate in the Surrogate’s Court in the county where the decedent had primary residence.

If there is no Will, then there is a rule for who can file for administration or a small estate. In general, the “closest distributee” can file for administration or small estate. This means that the decedent’s husband or wife has a prior right over the decedent’s children to file. But if the decedent does not have a living husband or wife, then the decedent’s children have equal rights. If the relative with the prior right does not want to administer the estate, that person can sign a renunciation and waiver. In the same way, if relatives have equal rights (such as a decedent’s son and daughter) in an administration proceeding, either can then sign a waiver, without giving up any share of the estate.

Administration Further Defined

When a decedent did not have a Will, then the estate proceeding is called an administration. If the decedent died with a Will, then a probate proceeding should be filed. If the decedent had less than $30,000 of personal property with a Will or without a Will, then a small estate, also called a voluntary administration proceeding, can be filed instead

Administration is the process where the Surrogate’s Court issues Letters of Administration to a qualified distributee of the Decedent. Letters of Administration appoints a decedent’s distributee with the authority to collect and distribute the decedent’s property according to the law.

If the Decedent’s only asset is real property (real estate), it may not be necessary to file an administration proceeding depending on who survives the decedent. By law, real property vests in the decedent’s distributees at the time of death which makes the distributees the owners of the property.

 Filing for Administration

In New York, the rule for who can file the administration proceeding is generally the person who is the closest distributee (heir) to the decedent.

The closest distributee files a copy of the paid funeral bill, a certified copy of the death certificate with the Petition for Letters of Administration and other supporting documents in the Surrogate’s Court in the county where the Decedent had  primary residence.\

It may be possible to file the papers over the internet using NYSCEF, the New York State Courts Electronic Filing system. Check this possibility on the e-filing County List for your Surrogate’s Court.

The Decedent’s distributees must also be listed in the petition. Distributees must be served with a notice, formally called a citation. The citation gives the Surrogate’s Court jurisdiction over them. This means that the Surrogate’s Court has the authority to determine the rights of the people involved. A citation tells the distributee that someone is asking for Letters of Administration to manage the decedent’s estate. The distributee can sign a waiver and consent to the appointment of the Administrator or come to court to disagree with the appointment.

What is a Trust in New York Estate Law?

Generally, a Trust is a right in property (real or personal) which is held in a fiduciary relationship by one party for the benefit of another. The trustee is the one who holds title to the trust property, and the beneficiary is the person who receives the benefits of the Trust.

A Trust is created when a person transfers assets to a trustee to hold for the benefit of one or more beneficiaries. The term ‘trust‘ simply describes the fiduciary arrangement or relationship between those parties. It is not a legal entity.

Can a Beneficiary Also be a Trustee 

Trusts are an integral part of many estate plans. From an asset protection standpoint, generally it is best to appoint an independent, professional trustee. But in some cases, it is desirable to name the trust’s primary beneficiary as trustee.

What is the difference between a Will and a Trust?

The main difference between a Will and a Trust is that a Will goes into effect only after the creator dies.  A Trust takes effect as soon as it is created and authorized. A Will is a document that identifies recipients of an estate and it appoints a legal representative to carry out the will’s directions.

How to Obtain a Copy of the Death Certificate

A death certificate is a document that records the official date and location of a person’s death.  The funeral director can be expected to have copies for those who need them.

In some cases, a “certified” copy of the death certificate, not a simple copy of the death certificate, may be needed. A certified copy has the raised seal of the state and is good for legal purposes such as settling an estate or claiming insurance benefits.  Certified copies are available as follows:

For a Person who died in New York City

If the person died in New York City (Bronx, Brooklyn, Manhattan, Queens, and Staten Island), you can order a certified copy of the death certificate online or by mail from the Office of Vital Records.

For a Person who died Outside of New York City

If the person died outside of New York City but in New York State, you can order a certified copy of the death certificate online or by mail from the New York State Department of Health.

For a Person who Died Outside of New York State 

If the person died in the United States but not in New York, contact the vital records or death records office of the state where the person died.

For a Person who Died Abroad

If the person was a U.S. Citizen and died outside of the United States, contact the U.S. Department of State for a Consular Report of Death of a U.S. Citizen Abroad.