New York, like most states, requires a minimum asset value of the estate to require probate. Therefore, if an estate’s value is under that, then the estate goes through a small estate proceeding. That said, even if an estate is below the threshold, that does not mean the Surrogate’s Court is not involved. Likewise, you should never assume that just because the estate is under a specific amount, you qualify for small estate proceedings.
Understanding the procedures involved with probate is critical. In New York, if an estate is valued over $50,000, it must be probated with a will. If the estate is valued under $50,000, it is still subject to probate, but what is known as a small estate proceeding. When there is no will, the estate is administered; not probated.
Accounting for All Assets – Is the Estate Really under $50,000?
At first glance, it might be easy to assume an estate is under $50,000, but once you dive deep into the financial records, you might find the estate is worth much more than originally thought. An estate’s “value” includes all assets, such as:
- Financial Accounts – This includes bank accounts, savings, investment accounts, and stocks, bonds, and retirement or pension accounts. Now, these only apply if they do not have a designated beneficiary already. If a named beneficiary is already on these accounts, then their value bypasses probate.
- Insurance Policies – Any applicable life insurance policies, and their payout value, are included in the estate value.
- Physical Assets and Their Value – Physical assets, meaning anything that could be sold for funds, are included. This might involve real estate property, vehicles, and even furniture.
Before an executor can even petition to the Surrogate’s Court, they must first have the estate evaluated by a third-party. Before hiring that third-party, they must locate all of the assets that are part of the estate and handle other administrative duties so that they can find the true value.
- Locating and inventorying all assets. First, the executor must locate all assets in the estate, create an inventory, and transfer ownership over to the estate if they are not part of it. Some of these assets may already be named in a will, but if the person did not have one, then the executor will be in charge of locating them.
- Paying all liabilities for the estate, including taxes. Before any evaluation begins, the executor must first pay all liabilities. That includes any outstanding debts and the final tax bill for the estate. They may have to collect all debts the estate owes and possibly wait for some debts to finalize. For example, if the deceased were struggling with a long-term medical condition, it could take a few weeks to receive the final bills from medical providers.
The Small Estate Proceeding in New York
After all of the debts have been paid and assets located, if the estate’s value truly falls under $50,000, then that estate qualifies for the small estate proceeding. Formally, this is known as a voluntary administration of the estate, and it will not matter if there is or is not a will.
There are limitations to these small estate proceedings, however. For example, if the deceased owned real estate, then the estate will need to go through regular probate instead of the small estate proceeding. If there is no real estate or property, and the value is under $50,000, then the administration proceeding can be filed instead.
In small estate proceedings, the Surrogate Court is still involved, and they will appoint a Voluntary Administrator to oversee the proceeding. When there is a will, the party named as the executor is then appointed as the Voluntary Administrator. When there is no will, the closest heir is appointed by the court.
When There Is a Will
If there is a will, the process is quite straightforward. The executor, who is now appointed as the Voluntary Administrator, will administer the estate in accordance with the deceased’s instructions in the will. They will still have to locate and inventory all assets, pay any outstanding debts, and then distribute the assets, but the process is often quicker than ordinary probate proceedings.
When There Is No Will
If there is no will, the Voluntary Administrator appointed by the court would have to distribute according to the latest estate laws.
The law dictates which relative gets what based on a hierarchy system, which includes:
- A Surviving Spouse and No Children – Then the spouse inherits all property.
- Children, but No Surviving Spouse – Children will inherit the remaining assets equally.
- A Surviving Spouse and Children – The spouse would receive up to $50,000 first, then children would inherit the remainder. In this case, the estate is $50,000 or less; therefore, the spouse receives the assets.
- Surviving Parents with No Spouse or Children – The parents would receive the full estate.
- Siblings Only – If there are no spouses, children, or surviving parents, then siblings of the deceased would receive the estate in equal sums.
The Process for Filing a Small Estate – Do You Need an Attorney?
When there is a will, the executor will still need to file that will and the death certificate with the courts using a small estate affidavit petition. They must provide evidence to the Surrogate’s Court that the estate qualifies as a small estate. Without a will, the person who is closest to the inheritance line would be the one that files the petition. Therefore, you can use the distribution rules above to determine which party would file that affidavit with Surrogate’s Court.
In some cases, you do not need an attorney to finalize a small estate, but the process alone is time-consuming, complicated, and confusing. Often, loved ones prefer to use an attorney, regardless of the estate’s size, to handle the paperwork, filing deadlines, and assist with any final administrative duties.
Whether you are trying to administer an estate, or you want to work on a will for your small estate, now is the time to contact a local estate planning attorney. The Law Office of Andrew M. Lamkin, P.C., can assist you with your small estate needs. Contact the office now to schedule a free case evaluation – including teleconferencing options for those who do not wish to leave home.