What is Estate Administration?
When a person passes away without a Last Will and Testament, they have died intestate. That means New York State under EPTL 4-1.1 will determine who the estate will pass to and in what proportions. Do not let New York State determine where your funds should pass. Contact Miller & Miller Law Group PLLC for Estate Planning to make sure that your wishes and desired are fulfilled. Should a person pass away without a will, someone must be appointed to administer their estate. There are three phases to Estate Administration; Appointment of the Administrator; Marshalling Assets and Paying Liabilities; and Distribution According to Intestacy
Phase 1- Appointment of Administrator
When a person passes away without a will, a person needs to be appointed to marshal the assets of the decedent, pay their liabilities, and distribute the remaining funds to the people who would inherit according to intestacy. That person is called the administrator of the estate. The administrator is a fiduciary and must act in the best interest of the estate. The person that has the largest interest in the decedent’s estate according to intestacy has priority in becoming the decedent’s administrator. SCPA 1001 lists the order of priority for granting letters of administration parties may petition to become administrator. Once appointed, the Administrator receives Letters of Administration and must work to marshal the assets of the decedent and pay liabilities.
Phase 2- Marshal Assets of the Decedent and Pay Liabilities
Once the Surrogates Court has appointed the Administrator, they have several duties with respect to the estate. Included are:
- Marshalling of Assets – Once the Court Grants Letters of Administration, the administrator must marshal the assets and pay the liabilities of the estate. Miller & Miller Law Group PLLC, can provide valuable advice and help with this process. From working with the banks and financial institution, to negotiating with creditors, to applying for a release of lien from New York State, Miller & Miller Law Group PLLC is here to help.
- Inventory of assets with the Surrogate’s court – The administrator must file a list of the assets with the Surrogate’s court in six months of the date they received Letters of Administration.
- File and Pay Income taxes – The administrator must file the final income tax return of the decedent and file 1041 income tax returns on behalf of the estate if income is generated.
- File and Pay Estate Tax- Should the estate be considerable in size, the Administrator may need to file a Federal and New York State Estate Tax return.
- Pay the debts of the estate – The Administrator should wait for 7 months for creditors to seek a claim against the estate before distribution of Assets
Phase 3- Distribution According to Intestacy
The last step of an estate is everyone’s favorite, distribution. After all the estate’s property has been marshaled and liabilities have been paid, the Administrator can begin the process of distribution according to intestacy. This process involves accounting to the heirs/distributees and receiving release and receipts from the heirs/distributees. The Administrator should wait 7 months for any creditors to submit their claims to the estate. It also may be advisable for an Administrator to withhold some funds as a precaution in the event another claim was to surface against the estate.
Being an Administrator in New York
As Administrator, you have a fiduciary duty to the heirs/distributees of the estate. Properly handling the estate is critical to avoiding litigation. Miller & Miller Law Group PLLC is here to guide you through the administration process and protect you as Administrator.