Answers to your Questions

Probate’s legal definition is “the act or process of proving a will” stemming from the Latin verb probare: to test, prove, examine. Add a conservative nine to fifteen months of petitions, affidavits, appointment of a fiduciary, a marshaling of the assets, plus an accounting and that “test” is complete.The petitioner, usually the executor, must prove to the Surrogate’s Court that the presented will was in fact the will of the decedent and after proving the will is valid, must follow all the statutory conditions in order to distribute the estate.

New York’s probate process is complicated and burdensome on purpose: the Surrogate’s Court has a duty to the people of New York to make sure that their wishes are successfully carried out. That means everyone who is an interested party gets notified of the proceeding, has a chance to object, and then hopefully, Letters Testamentary are issued.

An easy way to think about probate is that it is New York State’s way of making sure that the decedent’s wishes are fairly followed. Although somewhat lengthy and convoluted at times, the probate process will make sure all of the decedent’s debts and expenses are paid and will ensure that the named beneficiaries in the will actually receive the funds. It also allows for any possible contested issues to be presented to the court.

Letters testamentary are essentially permission from the court allowing the nominated executor to take over their fiduciary role and marshall the assets of the estate, pay off any debts or expenses and pay beneficiaries their legal share. Letters allow the fiduciary to actually take action and begin wrapping up the affairs of the decedent.

Every county is different, but with recent New York State cutbacks waiting times are only increasing. The norm used to be somewhere from six to twelve weeks. Now it can take longer. Remember this is not the end of the probate process. Assets need to be marshaled, sold, properly distributed and eventually accounted for. I always tell my clients that it will at least be a year long process, but I do my best to check up the probate petition to make sure we haven’t fallen through any cracks.

Probate is only necessary when their are probate assets. Examples include:

  • Real property titled sole in the decedent’s name or held as tenants in common
  • Savings or checking accounts that are sole in the decedent’s name
  • Personal property, i.e., automobiles, furniture, jewelry
  • Life insurance that lists the estate or the decedent as beneficiary
  • Possible business interests in a partnership, corporation or LLC

Non-probate assets can include:

  • 401k’s or other retirement accounts
  • Certain bank accounts not solely in the decedent’s name, i.e., totten trusts.
  • Life insurance passing to named beneficiaries
  • Any property that is held by a trust

When no will is presented, then a similar petition is followed except the decedent has no explicit wishes and the estate passes by intestacy, more specifically, EPTL § 4-1.1. So regardless of whether a person makes a plan or doesn’t make a plan, New York will give the assets of the estate to the people they think should get it. This sometimes causes problems.

If there aren’t issues and all interested parties are on the same page, then an administration shouldn’t vary too much from a probate proceeding, except that there is a different administrative process of proving who the distributees are and what they are entitled to. In the big picture, most things stay the same: assets are marshaled, sold if necessary, paid to the respective, legally entitled distributes, and then accounted for by the Administrator.

When I meet with potential clients, this is an important issue that must be discussed open and honestly from the beginning. Probate is a unique area of the law where there is usually a pot of money to be distributed at the end, so a patient attorney may be willing to wait to get paid. I take these cases in three ways:

  • Hourly Billing: Here the attorney bills the client at a set hourly rate, for example $375 an hour, and continues to do so until the matter is completed. The problem arises when litigation ensues or issues arise that were not contemplated from the onset. Here fees can quickly build and continue to build.
  • Flat Fee: Flat fees can be tricky because they do account for any surprises. Surprises happen. Most times when I bill at a flat fee I will detail exactly the work that is included and also include a provision that any contested matters outside of the normal scope of a straightforward probate affair will be billed at an hourly rate.
  • Contingency or Percentage of the Estate: The positives of contingency billing are that the attorney is directly connected to the outcome of your matter and that the fee will remain the same no matter how much work they put in. When a client cannot normally afford hourly rates, this enables the potential client the benefit of a probate attorney in their case.

There are two types of estate tax returns: federal and state. If the decedent died in 2015 and their estate (probate and non-probate assets) was over $5,430,000, then an federal estate tax is due. The exact rules can be found here.

New York has adopted legislature where every year until 2018, the estate tax limit is rising. So, right now it pays to stay alive. So, depending on when the decedent passed away, the monetary amount rises every year until 2019:

On or after April 1, 2014, and on or before March 31, 2015: $2,062,500
On or after April 1, 2015, and on or before March 31, 2016: $3,125,000
On or after April 1, 2016, and on or before March 31, 2017: $4,187,500
On or after April 1, 2017, and on or before December 31, 2018: $5,250,000

Most importantly the estate is required to file and pay the tax within 9 months of the decedent’s death. Click here for more information. Form 706 must be completed even if the estate is not required to file a federal estate tax return.

If you have any questions about Probate and Administration, contact the Westchester Law Office of Anthony Nigro at (914) 595-6527.

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