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Estate Settlement & Planning FAQ
- What is a Last Will and Testament?
- Do You Need a Will?
- What is an Executor?
- What is an Administrator?
- What is Probate?
- What is an Administration Proceeding?
- What is an Intestate Estate?
- Who Inherits When There is no Will?
- What is a Kinship Hearing?
- What is an Estate Settlement?
- What is a Fiduciary Bond?
- What is a Will Contest?
- What is an Estate Fiduciary Accounting?
- What is a Contested Accounting?
- What is a Breach of Fiduciary Duty?
- What is a Compulsory Accounting?
- What is a Spousal Right of Election?
1. What is a Last Will and Testament?
Except in limited situations, a Last Will is a writing that is signed and witnessed pursuant to the requirements of New York statutes. Typically, a Will contains provisions for the disposition of assets or other directions following a person’s death. A Will usually appoints a fiduciary such as an Executor and can be revoked and changed prior to death as often as desired. A Will can also create a testamentary trust and designate Trustees and Guardians for minor children.
2. Do you need a Will?
There is no legal requirement to have a Will. If a person dies without a Will, assets that are titled in the person’s name alone that do not have a beneficiary designation are distributable to the decedent’s next of kin pursuant to the laws regarding intestacy. The individuals who have a right to inherit are determined by the New York laws. A Will provides directions for the post-death distribution of a person’s estate and avoids leaving this process to be controlled by statutory intestacy directions which may not reflect a person’s true intentions.
3. What is an Executor?
An Executor is a person who is named or designated in a Last Will. The job of the Executor is essentially to be in charge of all of the affairs of the decedent’s estate. The named Executor usually seeks to probate the Will in which he is named. The Executor’s duties also include collecting all estate assets, paying estate bills and expenses and making distributions according to the terms of the Will. The Executor has authority to act when the Court approves his appointment. The Executor is granted Letters Testamentary.
4. What is an Administrator?
An Administrator is a person who is like an Executor. The difference is that an Administrator is appointed when a person dies intestate, which means without a Last Will. The Administrator’s job is to handle all of the affairs of an estate. When a person dies without a Last Will, the New York Statutes provide a list of persons who have priority to be appointed as Administrator such as a surviving spouse, or a child of the decedent.
5. What is Probate?
Probate or probating a Will is the process by which a Will is submitted to the Court for validation. After a person dies, the document that is denominated as the person’s Will must be officially authenticated by the Surrogate’s Court. The probate process can be complicated and requires the filing of many different papers in support of the Will. These can include kinship information and attesting witness affidavits. Will Contests can be a part of the probate proceeding. When a Will is admitted to probate, typically an Executor is appointed by the Court. The Executor receives Letters Testamentary which provides the official authorization to act on behalf of the estate.
6. What is an Administration Proceeding?
An administration proceeding is the process by which an Administrator is appointed to handle estate affairs. When a person dies intestate (without a Will) an administration proceeding is needed to appoint the estate fiduciary who is called an Administrator. To obtain the appointment of an Administrator, a number of documents need to be provided to the Court. Such papers include affidavits of kinship and a statement regarding the debts and liabilities and assets of the estate. The New York Statutes provide the rules which identify the individuals who may petition the Court for appointment. In some instances, there may be a requirement that the Administrator obtain a surety bond before the Court issues an appointment.
7. What is an Intestate Estate?
An intestate estate or intestacy means that a person died without leaving a Last Will. In these cases the person’s estate is distributed to his next of kin or distributees.
8. Who Inherits When There is no Will?
If a person dies without a Will, his distributees or next of kin inherit the estate. Distributees who have a right to inherit are determined according to the New York estate laws. Typically, a surviving spouse and children have priority. If none of these persons are surviving then the decedent’s parents and then brothers and sisters inherit. The statute has further provisions for more distant heirs.
9. What is a Kinship Hearing?
When a person’s next of kin or distributees cannot be fully ascertained or are distant in nature such as cousins, the Surrogate’s Court holds a hearing to determine the rightful heirs. Kinship hearings can be complicated and involve the presentation of birth records, marriage records and other heirship documents. Very often professional genealogists are hired to search for missing heirs. The Surrogate’s Court requires the presentation of all of these kinship documents and witness testimony to determine who should inherit an estate.
10. What is an Estate Settlement?
This is the process by which a decedent’s estate is administered. There are generally three phases. The first phase consists of the appointment of a fiduciary such as an Executor or Administrator. The second phase involves collecting assets and paying expenses, taxes and resolving claims against the estate. The final phase concerns preparing an accounting for the beneficiaries and distributing the net estate assets according to a Will or pursuant to the intestacy laws.
11. What is a Fiduciary Bond?
A fiduciary bond or a surety bond is like an insurance policy that is issued by a bonding or surety company that insures that the estate assets will be properly secured and paid. If the fiduciary mishandles or misappropriates estate funds, the bonding company may need to pay for the damages incurred. The Surrogate’s Court often directs that an Administrator be bonded or obtain a bond. The person who is to be bonded should be financially acceptable to the bonding company in order to qualify for the bond. The bonding company charges an annual premium for the bond.
12. What is a Will Contest?
A Will Contest is a proceeding in the Surrogate’s Court in which the validity of a Will being offered for probate is challenged. The basic grounds for Objecting to a Will are Lack of Due Execution, Lack of Testamentary Capacity and Undue Influence. Proving the validity of a Will can be facilitated where the Will is drafted by an attorney and the attorney supervises its execution. The decedent’s distributees are given notice regarding the probate proceeding. This notice is called a Citation. These individuals have the right to file Objections to the Will.
13. What is an Estate Fiduciary Accounting?
A fiduciary accounting is an account that an Executor or Administrator prepares showing all of the assets and income collected and the payments and expenses made and all other financial transactions during estate administration. The accounting is provided to the estate beneficiaries for their approval.
14. What is a Contested Accounting?
When a fiduciary files an Account with the Surrogate’s Court for judicial approval, the interested parties have the right to file Objections to the Account. The Objections can relate to various payments that the Executor or Administrator made or the manner in which the fiduciary handled various assets.
15. What is a Breach of Fiduciary Duty?
When a fiduciary acts or fails to act in a manner that is not in accordance with his fiduciary responsibilities, he may be found to have breached his duties. In these cases the Surrogate’s Court can remove the fiduciary from his office or hold him liable for monetary damages.
16. What is a Compulsory Accounting?
Parties interested in an estate are entitled to receive an Accounting from the fiduciary. If the fiduciary refuses or delays in providing this information, the party can file a Compulsory Accounting Proceeding in the Surrogate’s Court. In this proceeding the Court will direct that the fiduciary file a full Account with the Court and the interested parties will be able to review all of the financial transactions that occurred during estate administration.
17. What is a Spousal Right of Election?
The law in New York provides that a surviving spouse of a decedent has the right to receive a share of a decedent’s estate. The spouse is allowed to claim at least one-third of the net estate. The calculation of the Right of Election share can be complicated. The surviving spouse files a Notice of Election with the Surrogate’s Court to preserve these rights. Jules Martin Haas represents clients in matters concerning estates, guardianships and real estate throughout the New York Metropolitan area. If you have a case or issue regarding any of these areas, call Mr. Haas now for a free review.