Estate Administration and Probate are, in essence, two similar court proceedings in which a representative is appointed to manage a decedent’s estate with the ultimate goal of transferring the decedent’s assets to the beneficiaries of the estate. When a decedent passes away without a Last Will & Testament, the proceeding is referred to as estate administration. This proceeding takes place in New York State Surrogate’s Court, which is sometimes generically referred to as probate court. The term “probate” is often used interchangeably with the term “estate administration”. However, strictly speaking, if a person dies with no valid will (known as dying “intestate“), then the process is referred to as “estate administration”. On the other hand, if a person dies “testate“, or with a will, then the process is referred to as “probating the will”. The venue for both court proceedings is New York State Surrogate’s Court.
This vernacular is used in New York and many other states; however, this article focuses on New York Estate Law. If you are seeking information on the legal process for a decedent’s estate in another state, you should be certain to consult with an estate attorney in that particular state.
What is Estate Administration in New York?
If an individual passes away without a Last Will & Testament, someone must step up in order to administer the estate and transfer the assets to those entitled to receive them. Usually, it is the heirs at law (known as the distributees) who petition the Surrogate and requests authority to act on behalf of the decedent’s estate – to be appointed “Administrator” of the estate. Under the New York State Surrogate’s Court Procedure Act, there is an order of priority concerning who may serve as Administrator:
1) Surviving spouse;
6) Any other person who is a distributee and eligible to qualify.
The survivor with the highest priority has the right to serve as Administrator unless that person is disqualified. Those who are disqualified from serving as Administrator include minors, incompetents, non-domiciliary aliens, persons convicted of a felony, and those who otherwise do not possess the qualifications required to serve as Administrator. This last category is broad, and the Court has discretion in determining whether someone is qualified to act as Administrator.
Any person lower in priority may serve as Administrator with the consent of everyone with higher priority. Further, any person not named in the list of priority may become Administrator with the consent of all distributees. If more than one person exists in the class with the highest priority, each person in that class has an equal right to serve. For instance, if the decedent died with no spouse and two children, then the children have an equal right to serve. In this type of case, the children can serve together; they can agree that only one will serve; or, if they both want to serve alone, litigation can ensue and a hearing could be held for the Surrogate to determine who is most qualified to serve as Administrator.
While the administration process is largely the same throughout the State of New York, this article focuses on administration proceedings in Manhattan (New York County), Brooklyn (Kings County), Bronx County, Queens County, and Staten Island (Richmond County).
New York Estate Administration Procedure
The person causing a petition to be filed on behalf of the estate is referred to as the petitioner. Typically, one of the heirs at law acts as petitioner and hires an estate lawyer to conduct an administration proceeding. The petitioner is required to file an Administration Petition with the Surrogate’s Court, which includes detailed information regarding the decedent, the petitioner, the heirs at law, and the assets of the estate. Jurisdiction must be obtained over all the heirs at law so as to provide them with proper notice of the administration proceeding and the opportunity to object. Most administration proceedings do not involve objections; however, when objections are filed they usually involve: 1) the claim that a will exists (in which case the will, if valid, would need to be probated); or 2) a disagreement as to who should serve as Administrator.
Jurisdiction is always required over certain individuals such as the heirs at law. Jurisdiction may be obtained by having each heir sign a Waiver & Consent which “waives” the need for that person to be served with a Citation to appear in Court and “consents” to the appointment of the proposed Administrator. If an heir refuses to sign a Waiver & Consent, which sometimes happens, then the petitioner must serve the heir with an administration citation issued by the Court. An administration citation demands that the person receiving it appear in Court on a certain date and voice any objections. If the person does not object on such date, then the right to object is deemed waived.
Once the Administrator (or Administrator’s estate lawyer) has filed the petition along with the original death certificate, a copy of the paid funeral bill, appropriate waivers, proofs of service of citations, additional supporting documents as needed, and pays the filing fee, most courts take 2-3 weeks to render a decree and issue Letters of Administration, the Administrator’s official written appointment from the Surrogate.
Potential Pitfalls in an Administration Proceeding in New York
While the above procedure is somewhat typical of an administration proceeding, it is not always this straight forward. Various issues can arise that complicate the proceeding. Disputes as to who should serve as administrator are the most common; however, there are less severe complications that can occur in an administration proceeding such as:
These are just a few of the possible complexities in an administration proceeding; however, each problem may be solved with the application of appropriate legal techniques by your estate attorney.
Conclusion of the Administration Proceeding
The Administration Proceeding is concluded when Letters of Administration issue to the proposed Administrator, but this is only the beginning of the overall process. Once the Administrator is issued Letters, he or she then has the authority to collect and liquidate estate assets, determine and pay debts, handle other estate issues, and make distributions to the distributees. The role of the estate lawyer is to guide the Administrator through this process, ensure that court proceedings are conducted properly, appropriately administer estate assets, and prevent mistakes and liability for the Administrator.
Administrator’s Legal Obligations
The administrator has a fiduciary responsibility to act in good faith, with reasonable care, and handle the estate with prudence and undivided loyalty. If the administrator breaches his or her fiduciary duty, he or she may be personally liable to the estate for damages. There may also be federal and state income tax and estate tax requirements that must be met. Your estate attorney can advise you on satisfying your fiduciary obligation.
Collecting & Liquidating Estate Assets
The administrator is charged with the responsibility of collecting and liquidating estate assets. For instance, if there is real property, that property may need to be sold and the proceeds divided among the heirs. In this case the administrator is responsible for preparing the house for sale, listing the property, contracting with a buyer willing to pay a fair price, and closing the deal. The expertise of an estate attorney is extremely important in this process. Similar action must be taken with respect to collecting cash, securities, personal items, and any other estate asset.
The accounting is the final stage of administering an estate. The administrator’s attorney will typically draft an informal account and distribute it to the interested parties. Each party signs a Receipt & Release which indicates that the distribution was received and that each party releases the administrator from liability.
In certain, usually more acrimonious circumstances, a judicial accounting is necessary. This is a formal proceeding before the Surrogate in which the administrator seeks a Court Order approving the executor’s account. A judicial accounting is often used in situations where an interested party refuses to approve the accounting and the administrator seeks final settlement of the accounting before the Surrogate.
Follow this link for more detailed information on Accountings.
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