If you are responsible for administering the estate of a decedent, you have an important job ahead of you. One of decisions you need to make is to determine if the estate must go through formal probate or if an alternative for small estates is available. The Long Island probate attorneys at Eghrari Wealth Training Firm help you decide if an estate can avoid formal probate in New York.
Formal Probate Basics
The assets owned at the time of death comprise the estate of a decedent at the time of their death. Some people amass a huge estate that includes complex and valuable assets while other people own little more than their personal possessions at the time of death. Regardless of the size and value of assets owned by a decedent, those assets must be identified, valued, and passed down to the new owners. That is the primary purpose of the legal process known as probate. Probate also serves to authenticate a Last Will and Testament purportedly executed by the decedent as well as litigate any challenges to that Will. In addition, creditors of the estate are notified and provided an opportunity to file claims against the estate during probate. Finally, all taxes, including federal gift and estate taxes, owed by the estate must be paid before the probate process can reach its conclusion.
Formal Probate: What Is The Benefit Of Avoiding It?
For most estates, some type of probate is required; however, there are many advantages to avoiding formal probate because formal probate is costly, both monetarily and in terms of time. In the State of New York, it will take at least eight months to probate even a relatively simple estate if an alternative to formal probate cannot be utilized because creditors have seven months from the date the Surrogate Court issues letters to file a claim against the estate. Often, formal probate can take considerably longer than eight months. All the while, the probate assets remain unavailable to the intended beneficiaries. In addition, the longer it takes to probate an estate, the more expensive it usually is because everyone involved (Executor, attorney, appraiser, accountant) is entitled to a fee for their services.
Small Estate Alternatives in New York
In the State of New York, when a decedent left behind less than $50,000 of personal property it is considered a small estate. It does not matter of the decedent left behind a Will or not; however, if real property owned by the decedent alone was left behind it is not considered a small estate. If the decedent owned real property jointly with someone else and owned less than $50,000 of personal property, the estate does qualify as a small estate. If the estate qualifies as a small estate, it can be administered using an alternative to formal probate referred to as “Voluntary Administration.” In a Voluntary Administration, the Surrogate’s Court appoints a Voluntary Administrator. If the decedent executed a Will prior to death, the Executor of the Will is appointed the Voluntary Administrator. If there is no Will, then the closest heir is named the Voluntary Administrator. The Surrogate’s Court issues a certificate for each asset listed in the papers which the Voluntary Administrator collects and distributes according to the law.
Keep in mind when deciding if an estate can avoid formal probate that not all assets are considered probate assets. Before you can decide if an estate requires formal probate, you must first determine which assets are probate assets and which assets bypass probate altogether. For example, assets held in a trust do not go through probate nor do proceeds from a life insurance policy.
Contact Our Long Island Probate Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding the possibility of avoiding formal probate in New York, contact the Long Island probate attorneys at Eghrari Wealth Training Firm by calling us at 631-265-0599 to schedule your appointment.
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