Probate & Estate

Below are the answers to some frequently asked
probate and estate administration questions.

 

What is probate?

Probate is the legal process that allows the court to prove or disprove the decedent’s last will and testament, heirs to contest the will and the executor of the estate to be named and granted authority to act on behalf of the estate in estate administration.

 

How does probate start?

In New York, the probate process begins when a petition and original will are submitted to the Surrogate’s Court in the county where the decedent lived. The petition provides the court with the necessary information to move forward with validating the will and appointing the executor/executrix. The petition informs the court about the decedent’s death, the executor, the beneficiaries named in the will (as well as heirs that would inherit if there was not a will – if different) and the estimated value of property and assets passing under the will.

 

How is a will validated by the Court?

All heirs are notified of the decedent’s death at the initiation of the probate process. Before the will is validated by the court, the judge (the Surrogate) must be satisfied that there are no objections to the will.

The executor of the estate obtains signed waivers from each heir stating they waive the right to object to the will. The executor notifies heirs who do not sign the waiver of the required time and date to appear in court to make their objections. Any heirs who do not appear at the required time will be presumed by the court to have waived their right to contest the will. If there are no objections and if the will adheres to New York requirements, the court validates the will.

 

What if the will is contested?

Any heirs that do not sign the waiver and appear in court at the required time may raise their objections to the validity of the will. In a separate hearing, the court will render a decision to either uphold the current will, revert to a previous will or reject a codicil (amendment) to the will or reject the will in its entirety.

 

Who can contest a will?

Only a person with “standing” can contest a Will. This means the person must have a personal financial stake in the outcome. For example, a child or spouse who was cut out of the Will, a child who receives one third of the estate if a sibling receives two thirds, children who feel that the local charity should not get all the parent’s assets, anyone who was treated more favorably in an earlier Will.

 

Can beneficiaries be prevented from challenging a will?

Often referred to as a no contest clause, a testator may include a clause that says if the beneficiary under the instrument sues contesting the instrument, the beneficiary loses whatever he is taking under the instrument.

 

When can a will be invalidated?

A Will can be contested on several grounds. For example, if the challenger can establish that the testator was not competent when the Will was drafted, the court will invalidate the Will. If the testator was unduly influenced by someone who would benefit from the terms of the will, then the contested Will may be deemed invalid. If the Will was not properly executed pursuant to the laws of New York, then the Will may be deemed invalid. Also, if the testator creates a later Will, that Will, in effect, revokes all previously executed wills.

 

What if the will is rejected?

If the will is rejected, New York intestate laws determine how assets will be distributed to the beneficiaries — it is as if there was never a will.

 

How long does probate take?

Many factors impact the length of the probate process, such as county backlog of probate cases to be heard, time to locate and notify all heirs, and whether or not there are objections to the will. The process will take much longer if there are objections to the will or to the appointment of the executor/executrix.

 

When is probate complete?

Once the executor/executrix has officially been appointed by the court to act on behalf of the estate, the executor is given documentation as proof of such authority. This documentation will be necessary to collect the decedent’s assets, manage bank accounts, etc. This marks the end of probate and the beginning of estate administration.

 

What is estate administration?

Estate administration is a much more lengthy process that involves locating and collecting all of the decedent’s assets, reviewing and paying valid debts and claims against the estate, filing tax returns and paying applicable taxes, making distributions to beneficiaries from remaining assets, filing a final accounting of the estate and closing the estate.

Administration is the process by which legal title of property is transferred from the decedent’s estate to his or her beneficiaries. The purpose of a probate proceeding is to settle every possible claim so that title to the assets of the estate passes to the rightful beneficiaries free and clear of adverse claims.

 

Who can make a Will?

Under New York law, every person eighteen years of age or over, of sound mind and memory, may, by will dispose of real and personal property and exercise a power to appoint such property.

 

What are the requirements of a Will under New York law?

To be a validly executed Last Will and Testament, a stringent 6-point test must be satisfied. First, the Will must be signed by the testator or by another person at the testator’s direction and in his/her presence. Second, the testator’s signature must be at the end of the Will. Third, the testator must sign the will in the presence of each witness. Fourth, the testator must “publish” the will by declaring to the witnesses that the instrument is his/her will. Fifth, there must be two attesting witnesses who sign at the testator’s request. Lastly the witnesses must sign their names within 30 days each other.

 

What happens if I want to change my will?

A testator may create a new Will or a “codicil” at any time during his lifetime, so long as the testator is mentally competent. It is advisable to destroy any prior Wills to avoid challenges to the validity of a later Will after your death. In addition, under New York law, a divorce will terminate an ex-spouse’s rights under a Will, unless a contrary intent is clearly shown. A separation does not terminate a spouse’s rights under a Will.

 

How do I revoke my will?

A Will may be revoked by an act of burning, tearing, cutting, cancellation, or other mutilation or destruction performed by the testator, or by another person at the direction of the testator. Additionally, under New York law, a subsequent Will, by law, revokes all prior Wills.

 

What happens if I die without a will?

If a person dies without a will, then the decedent’s estate will pass according to the laws of intestacy. The New York legislature has designed a method of distribution that provides default rules for distribution in the absence of a will. Under intestacy, a surviving spouse is guaranteed the first $50,000 whether the decedent dies with or without a will. If the decedent has surviving children, the children will split one-half of the remaining amount with one-half of the balance to the surviving spouse.

 

If I serve as executor, will I get paid?

In New York, executors get paid commissions which are calculated as a percentage of the value of the “probate estate,” less any items of real or personal property left by the testator to a specific individual (known as specific bequests, legacies or devises). The commission rate in New York for each Executor is 5% on the first $100,000 in the estate, 4% on the next $200,000, 3% on the next $700,000, 2-1/2 % on the next $4,000,000 and 2% on any amount above $5,000,000.

 

Does all property have to go through probate when a person dies?

Property that passes outside of a will, for example through joint tenancy or a living trust, is not subject to probate. Additionally, in New York, a small proceeding may be filed if the value of the estate is under $30,000 and the decedent owned no real estate. The filing fee with the Surrogate’s Court is only $1.00. This proceeding is available for persons who died with or without a will.

 

What assets do not go through probate?

Not all property is subject to probate. Life insurance and retirement benefits do not need to go through probate. Life insurance benefits can be paid directly to a named beneficiary. Money from IRAs, Keoghs, and 401(k) accounts transfer automatically to the persons named as beneficiaries. Bank accounts that are set up as pay-on-death accounts or “in trust for” accounts with a named beneficiary also pass to the beneficiary without probate.

 

Does the personal representative have to account for all of the deceased person’s personal property?

New York law allows for certain property to be except from probate, including (1) furniture, appliances, computers valued up to $10,000; (2) books, the family bible, family pictures, video tapes, and computer tapes, disks, and software used by the family are exempt property up to a value of $1,000; (3) domestic animals with their necessary food for up to 60 days, farm machinery and one tractor, and one lawn tractor not exceeding an value of $15,000; (4) a car worth up to $15,000; (5) money or other personal property not exceeding $15,000.

 

Can a spouse be disinherited?

In New York, a surviving spouse cannot be disinherited. A surviving spouse is entitled to at least $50,000 or one-third of the decedent spouse’s net estate, whichever is greater. The surviving spouse has a right of election even if the decedent has no Will. The purpose of this rule is to give effect to the testamentary substitutes. Otherwise, a spouse could make gifts with retained power to revoke and invade, and then die intestate, leaving his spouse with a right of election in an estate of zero dollars.

 

When must a spouse exercise a right of election?

Under New York law, an election notice must be filed in Surrogate’s Ct within six months from the issuance of letters testamentary or letters of administration, but not later than two years after the decedent’s date of death. Written notice must be served by mail upon decedent’s personal representative.

 

Am I responsible for paying the rest of the deceased spouse’s bills?

If you and your spouse shared the same bank account and credit cards, checks, etc., then you may have to pay the bill. If the credit cards or accounts were opened with only your spouse’s information as reference, then you may not be liable. Creditors usually collect their debts from the estate before the remainder is divided among the heirs. Each case depends on the circumstances. Talk to an experienced probate lawyer.

What if the decedent owned land outside New York?

If the decedent was a resident of New York, the probate laws of New York determine who will get the decedent’s personal property (wherever it was located) and the decedent’s real property located within New York. However, property owned by the decedent in another state is subject to that state’s laws in determining how the real property will be distributed. There will be probate in each state (ancillary probate) where there is real property, in addition to the home state.

 

Is the personal representative required to notify creditors of the decedent’s passing?

New York does not require the personal representative to search for or send notice to creditors. The law assumes that creditors exercising ordinary diligence will send regular bills to the deceased person and the personal representative will learn of claims through receipt of the decedent’s bills. A creditor who learns of the death of a debtor should send to the personal representative written notice of a claim, stating the amount sought and a recitation of facts upon which the claim is based. In New York there is no statute of limitations that applies to claims against a deceased person. Rather, the customary statute of limitations to enforce a claim will continue to apply, that is, the six-year statute of limitations for most contract claims. Once the personal representative receives the claim, the claim can either be paid or contested. In paying it, a release should be sent from the creditor acknowledging payment and releasing the estate of its liability. If the claim is contested, the estate must file an objection. The personal representative must act in the estate’s best interests, remembering that the cost of fighting a claim (i.e. court and attorney fees) must be weighed against the cost of paying outright.

 

What happens if the beneficiary under a will dies before the testator?

If a beneficiary does not survive the testator, the devise fails. All gifts made by the will are subject to a requirement that the beneficiary survives the testator, unless the testator specifies otherwise. Despite this rule, New York law allows for certain bequests to “survive” to the next generation. This rule is referred to as the Anti-Lapse Statute. This provides that if the will makes a gift to the testator’s children or siblings, and a beneficiary dies before the testator, then the descendants of the deceased beneficiary will inherit whatever was willed to that beneficiary.

 

What happens if I was given a gift while the decedent was still alive, does it come out of my inheritance?

A lifetime gift is not treated as an advancement unless proven by a writing, contemporaneous with the gift, signed by the donor evidencing his intention was that the gift be treated as an advancement or the person receiving the gift acknowledged that such was the intention. The mere fact of a lifetime gift or even oral statement that an advancement was intended will not automatically create an advancement.

 

What happens if property that I was to receive by a will was conveyed prior to the testator’s death?

If a will includes a specific devise of an item of property, but the testator sells or gives the item away before death, the gift is said to have adeemed. An ademption may be of the whole or may be a part of a testamentary bequest or devise. If the whole bequest or devise is disposed of prior to death, the testamentary disposition is revoked.

 

If I am given by will real property that’s subject to a mortgage, does the Estate pay off the mortgage?

Unless the will states otherwise, under New York law mortgage on real property is debt that is so tied to real property that there is a presumption that the property goes subject to the mortgage. The beneficiary of real property inherits the property subject to the mortgage debt.

 

What is a living will?

A living will is a written statement that expresses your desires with regard to health care treatment if you become mentally incapable and/or physically incapable of expressing those desires. It may include instructions concerning the termination of life support.

 

What is a health care proxy?

A health care proxy is a document which allows you to designate a person to make health care decisions for you if you cannot make them for yourself. These decisions can involve the management of your health care in order to keep you healthy. These decisions can also involve the termination of life support.

 

What is a trust?

A trust is a fiduciary relationship in which a trustee holds legal title to a specific property under a fiduciary duty to manage, invest, and safeguard the trust assets for the benefit of designated beneficiaries, who hold equitable title.

What is a supplemental needs trust?

A supplemental needs trust is a discretionary trust established for the benefit of a person with a severe and chronic or persistent disability. The beneficiary does not have the power to assign, encumber, direct, distribute or authorize distributions from the trust. Typically, this is money used to give the child something above and beyond what the state would give them.

 

What is a spendthrift trust?

A spendthrift trust is one in which, by statute or more often by virtue of the terms of the trust, the beneficiary is unable voluntarily or involuntarily to transfer his interest in the trust. A trustee cannot sell or give away his right to future income or capital, and his creditors are unable to collect or attach such rights. This type of trust is usually created to provide a fund or the maintenance of the beneficiary that will be secure against his own improvidence.

 

Can a trust be modified or terminated?

If the settlor and all the beneficiaries consent a trust may be modified. If the trust is revocable by the grantor he can take the property back. If the trust is irrevocable, the parties can terminate if they all sign on and if the material purpose of the grantor will not be changed. The trustee has no beneficial interest and cannot object. Such a right to modify and terminate exists even if the trust contains a spendthrift clause.

Under New York law, a statutory spendthrift trust cannot be terminated by beneficiaries as the settlor’s participation is required under statute. This means that if the settler is dead, or if it’s a testamentary trust, the trust cannot be terminated.