Losing a loved one can be extremely difficult, and even more so if you are responsible for navigating the process of probate, whereby the courts settle the deceased’s estate in accordance with their estate planning documents. If there are estate planning documents in place, the process is relatively hands-off once the documents are authenticated. However, if the decedent did not have a will in place, the court has to play a more active role in the process.
There is no question that this process can be confusing, stressful, and time-consuming. Below, we discuss the process and what to expect:
What is Probate? The Law and Exceptions
Probate can not only refer to the process of administering an estate after an individual passes away but also the process of validating a will, depending upon the circumstances. The process involves taking inventory of the decedent’s assets and distributing property to their beneficiaries once debts and taxes are also settled, and can take anywhere from several months to a year or more, all depending upon whether there is a will in place. In New York, the average probate wait time is reportedly between seven and nine months.
Specifically, the probate process can become more complicated under these circumstances:
- The decedent does not have a will in place: In this case, the court appoints an Executor and distributes the decedent’s assets based on intestate succession laws. Note that, in New York, the Executor is entitled to commissions under state law based on the value of the probate estate and range between two and five percent of the value of assets received and paid
- If a will is deemed to be invalid: For example, if it is not notarized or its validity is being challenged by anyone, for example, if the decedent was under duress or last minute changes were made without their permission, etc.
- Additional oversight is needed, for example, if any assets were overlooked
- Any beneficiaries named predeceased the decedent (in which case the court proceeds based on intestate succession laws)
New York state probate law also dictates that any estates that fall under the value of $50,000 do not need to go through the probate process.
In order to best prepare for probate, it is wise to familiarize yourself with the process:
- Opening probate: The Executor or a close relative files a petition with the court and initiates the process by filing a certified death certificate and any additional supporting documentation, such as estate planning documents (a will, any trust documents, etc.)
- The court will then authenticate the will of the deceased, ensuring that it was created in accordance with state laws
- The court will officially appoint the Executor named in the will, or if there is no will, the court nominates next-of-kin based on state law
- It is then the Executor’s job to notify any interested parties, such as beneficiaries listed in the will, as well as any parties with a financial interest in the estate, such as creditors, mortgage lenders, and others
- The Executor will need to appraise the value of assets, including bank and investment accounts, personal items, etc., including any items not included in the will
- The inventory should be reported back to the court and beneficiaries
- Assets are distributed: This can be very time-consuming, as it also includes settling debts on behalf of the Estate, selling any assets specified in the will, and filing any necessary life insurance claims, etc. If any assets are left to minors, the court will need to get involved again to oversee the creation of a trust until the beneficiary comes of age
- The estate can then be closed, whereby the Executor files a petition with the court, and this becomes a part of the public record
New York Now the Riskiest Place to Die Without a Will in Place
In spite of the many risks of not having estate planning documents in place, two-thirds of Americans still do not have one, and a recent study revealed that New York is the riskiest state to die without being prepared in terms of your estate planning. When someone dies without a will, some have described their families facing what’s been called a “postcode lottery,” whereby, due to the complicated laws in place – especially when it comes to guardianships – the process can turn into a complete nightmare. For example, a child of the deceased will be forced to live with a court-designated guardian unless there is a will in place.
Estate settlement is exactly how it sounds: It involves what happens to an estate after the owner dies. The process typically involves the following:
- Organize any relevant information
- Consult a probate attorney
- File the will and notify the necessary parties
- Take inventory and appraise assets
- Establish a bank account
- Pay any taxes and debts
- Distribute assets according to instructions provided in the will
- Close the estate
Do You Own a Business? Avoid These Common Mistakes
If you are an entrepreneur, do not assume that your business will automatically be handled without engaging in estate and succession planning. Below are some common mistakes entrepreneurs that can hinder their estate and succession plans:
- Failing to plan for incapacity (i.e., put in place a durable power of attorney or living trust)
- Failing to update your estate planning documents: Remember that estate plans are living documents that need to be kept up-to-date
- Relying solely on a will – note that this does not allow the privacy and control that other estate planning documents can provide
- Underestimating the value of assets (resulting in unintended tax liabilities)
- Not planning for estate tax payments and impacts on heirs
Contact Our New York Estate Administration Attorneys to Find Out More
There is no question that living in New York should provide serious motivation to engage in estate planning sooner rather than later due to the lack of an estate plan exposing heirs to serious risks.
Probate is not a process that you want to go through alone: Court appearances, understanding confusing legal documents, and other administrative duties can be beyond overwhelming. Contact our New York probate attorneys today so that we can provide you with guidance during this process.