If your loved one died without leaving a will, his or her estate will have to go through a process called estate administration. Estate administration is the vehicle by which your loved one’s financial and legal matters will be settled and his or her assets passed to his or her heirs.
Without a valid will, your loved one’s assets will be passed according to New York’s intestacy laws rather than as your loved one wished them to be passed. For example, even though your loved one may have intended the assets pass only to his or her spouse, the state mandates that they must be divided between the spouse and surviving children.
The duties of an estate administrator include seeking and obtaining property appraisals, notifying your loved one’s creditors, paying taxes and paying legal fees. After the fees, taxes and debts are paid, the administrator will then distribute the assets to your loved one’s heirs.
At the office of Joseph A. Lewidge, our attorney regularly helps his clients understand their rights in the event their loved ones have passed away without a will. He advises close relatives regarding their probable inheritance rights and helps them to reach a resolution of any estate disputes they may have. Mr. Lewidge also advises people who have been appointed as administrators, and he helps them understand their duties so they can avoid costly disputes and court litigation. Mr. Lewidge is highly knowledgeable about estate taxes and helps his clients figure the owed amounts. Estate administration can be complicated and leave people with many questions. In order to provide better assistance to people who have a loved one who passed without leaving a will, Mr. Lewidge has gathered additional information on his Queens estate administration page . If you have questions, you may find a review of it to be helpful.
As New York residents may know, having a life insurance policy as part of the owner’s estate may have an effect on both taxes and probate. The manner in which the owner sets up the policy might have unintentional consequences when the time comes for the proceeds to be disbursed. While a married individual may assume that the proceeds from an insurance policy goes to the spouse, it is still a good idea to not only name the spouse on the policy as a beneficiary, but to also name an alternate beneficiary in the event something should happen to both married partners around the same time.
An insurance policy that does not include the name of a beneficiary, even though the owner is married, may be treated as part of the estate and end up going through the probate process . This can be time delaying and costly, particularly if the owner had significant financial oblgiations. While creditors may make a claim on an estate, a life insurance policy with a named beneficiary is not treated as part of the owner’s estate and the proceeds are disbursed to the named beneficiary directly. Naming a minor child as a beneficiary in a life insurance policy also requires consideration. Since a minor cannot receive funds directly from a policy, the policyholder may wish to consider either naming a custodian or having the funds placed in a trust for the child.
When a life insurance policy is a part of a comprehensive estate plan, consideration should be given to whether the proceeds from the policy might end up in probate, potentially reducing the amount the beneficiary might receive. As a result, those wanting to purchase such a policy may wish to discuss the alternatives with an attorney.
Source: The Motley Fool, “Buying Life Insurance? Don’t Make These Mistakes with Beneficiaries” , Selena Maranjian, March 6, 2015
After an individual passes on, his or her estate must go through the probate process. While some believe that going through probate is a long and stressful process, it tends to be quick and relatively easy. During this process, assets inside of an estate are inventoried and accounted for. Although it is possible to place assets outside of an estate to avoid probate, there is often little or no reason to do so.
Those who don’t put their assets into a living trust may be able to avoid probate anyway. For instance, money inside of a retirement account or a life insurance death benefit may pass directly to a previously named beneficiary. Real estate that was held in the name of the deceased may also pass to a beneficiary or be passed directly to a spouse.
Typically, the probate process may be extended due to tax laws that are outside of the probate court’s control. Therefore, avoiding probate may not cause an estate to be settled any faster than it would if probate were not avoided. Additionally, it is important to consider the fees and other costs of having a trustee administer property held inside of a trust. For most people, a living trust is more useful for estate planning purposes instead of as a tool to avoid probate.
Individuals who are interested in learning more about the probate process may wish to talk to an estate planning attorney. An attorney may be able to provide more information about what probate is and whether or not there is any benefits to creating a trust to avoid it. A lawyer may also be able to talk about different estate planning tools available to create a plan that meets an individual’s needs now and in the future.
Agreeing to be the administrator for the estate of a loved one in New York may seem simple, but there are numerous responsibilities involved. An administrator’s job typically begins upon the death of the individual to whom the estate belonged, meaning that this could be an emotional process. Additionally, there are many steps involved in handling the remaining assets of that individual.
If a will exists, the wishes of the decedent may be clear, but in intestate situations, the lack of a will leaves much of the decision-making process in the hands of the court system. The three phases of administrating an estate include management of assets, finalizing financial obligations to debtors and the government, and handling asset distribution. Before probate begins, issues such as burial, locating documents and safety deposit boxes, and obtaining copies of a death certificate are typically addressed. The more organized the estate is, the easier its administration will typically be.
With more advanced methods of estate planning , an individual can simplify the process for their selected administrator. Some assets can be managed while that party is still alive so that transfer is automatic upon their death. Naming of beneficiaries on retirement accounts and life insurance policies may also minimize probate matters. Forming a living trust may allow the probate process to be minimized or completely avoided. In addition, an individual who has been asked to serve as the executor of a will or as a trustee might be entitled to compensation for their services due to the extent and complexity of the task.
In addressing estate plans in a family, it may be prudent to discuss one’s estate and administration wishes with an intended executor or administrator. This may minimize confusion on various issues while making the task more manageable for the person to be appointed. Legal guidance may be important during this process. A lawyer could serve as an advisor throughout the planning of an estate.