Which court you must use to open probate depends on where the decedent lived and where their assets were located. Depending on the circumstances, you might not need to open probate at all. On the other end of the spectrum, you might need to institute probate proceedings in more than one jurisdiction. The larger and more complex the estate is, the more likely it is that you will need to deal with more than one probate court.
When You Don’t Need Probate at All
When someone dies, their assets may or may not become part of their “probate estate.” If they are not, then the probate court will not dispose of them. Instead, they are payable directly to a particular beneficiary. Most people die with some probatable assets and some non-probatable assets. With proper estate planning, however, you might be able to remove all your assets from probate.
Types of Property Not Subject to Probate
The following types of property are not subject to the jurisdiction of any probate court:
- Life insurance proceeds go to the named beneficiary based on the terms of the decedent’s life insurance policy;
- Assets held in a payable on death (POD) or transfer on death (TOD) account—typically cash or securities—go directly to named beneficiaries;
- Retirement accounts—IRAs, for example—include a beneficiary to whom the funds pass directly upon the decedent’s death; and
- Certain types of jointly owned property with “rights of survivorship,” such as a house, might be owned in joint tenancy with the right of survivorship.
Certain other types of property, such as pension payments, salary and wages, and co-owned US savings bonds, can also evade probate. An estate worth less than $30,000 after the subtraction of the value of all the foregoing types of assets might be subject to a simplified, expedited probate process.
Assets Placed in a Living Trust
Some types of property, such as the right to receive life insurance, avoid probate by their very nature. You can also create a living trust to hold just about any type of asset. Once the trust owns your asset, it is no longer part of your probate estate.
To create a living trust, you must:
- Name a trustee to manage the trust;
- Appoint at least one beneficiary; and
- Create a trust document to govern how the trustee must manage the trust.
Once you create the trust, it will survive your death. Not only can you use it to distribute your assets immediately after your death, but you can also use it to distribute assets on a periodic basis. For example, the trust might distribute a monthly amount to a beneficiary.
Where to Open a Probate Estate for Ordinary Probate Proceedings
The general rule is that you must open probate in the court where the decedent was domiciled when they died. “Domicile” means the place where the decedent lived with no definite plans to leave. You might prove domicile with documentation such as a state driver license. If the decedent’s property was located in two or more New York counties, an interested party should initiate probate proceedings in the New York Surrogate’s Court of the decedent’s domicile.
Ancillary Probate Proceedings: Where to Open a Probate Estate When Assets are Scattered Among Jurisdictions
Many decedents owned property in more than one county, more than one state, or even more than one country. Things can get complex when another state or country is involved because two or more separate legal systems might apply. Under these circumstances, you might need to open ancillary probate proceedings in an out-of-state jurisdiction.
Determining the “Situs” (Location) of Property
Before you know whether you need to open ancillary proceedings, you need to know the location of the probate property. Sometimes it is easy to assign a location to property. Real estate, for example, is located in the state and county where it sits. But what about a copyright or a patent? Some types of property are so abstract that it is difficult to assign a location.
- The location of tangible personal property (such as jewelry or automobiles) is usually wherever it was located when the decedent died.
- New York probate law treats the contents of bank accounts and investment accounts as intangible personal property with a situs where the decedent was domiciled when they died.
- The law treats ownership interests in cooperative apartments as intangible property located at the decedent’s domicile, regardless of the actual physical location or the apartment.
- The law treats intellectual property as intangible property located at the decedent’s domicile.
As a practical matter, some banks and financial institutions located out of state might not recognize New York´s claim of jurisdiction over a bank account with an out-of-state bank. This is one of those situations where a lawyer could come in handy.
If Some of the Probate Assets of a New York Decedent are Located Out of State
If the decedent was living in New York at the time of death, and if some of the probate assets are located out of state, an interested party (typically the named executor) should initiate probate proceedings in the decedent’s home county.
The executor must initiate ancillary probate proceedings in the out-of-state or international jurisdiction. The executor will need authority from a local court to liquidate estate assets to pay estate creditors and to distribute cash to beneficiaries. New York will retain the authority to assess certain types of tax and to impose certain other liabilities on the estate property.
If the Decedent Lived Outside of New York With Assets Located in New York
If the decedent is not a New York domiciliary but owns New York property, the out-of-state executor must initiate ancillary probate proceedings in New York. The property will be dealt with under New York law. A New York Surrogate’s Court, for example, might issue documents allowing the executor to sell New York property. New York might tax this property, especially if it is real estate, even if it has no authority to tax the decedent.
Experienced Counsel Is a Practical Necessity
Probate courts do not always require litigants to retain a lawyer. Nevertheless, an experienced New York probate legal practitioner is essential for optimal results in most cases. This is especially true when dealing with complex, multi-jurisdictional probate estates that involve the application of two or more legal systems.
If you are facing upcoming probate proceedings, you’ve come to the right place. Please contact the Law Office of Andrew M. Lamkin, P.C. today.