When you envision the way that a will is administered after someone dies, you may assume that the executor that is named in the document could follow the instructions and act independently. This type of scenario is sometimes depicted on fictional television shows and in the movies, but it is just that: fiction.
Under the laws of the state of New York, a will must be admitted to probate after the passing of the testator. The executor or personal representative would handle the business of the estate in a hands-on manner, but the administration of the estate would be supervised by the Surrogate’s Court.
There is a proving of the will during probate. The court examines the will to make sure that it is valid, and if anyone wants to contest the validity of the will, an argument could be presented during probate.
All valid final debts must be paid, including taxes, and the assets that comprise the estate would be prepared for distribution to the heirs. After the court closes the estate, the executor would be allowed to distribute inheritances.
The probate process does provide certain protections, but it is problematic for the rightful heirs to an estate. Inheritances are not distributed while the court is probating the estate, and it will typically take somewhere in the vicinity of a year, even if there are no particular complications.
A loss of privacy is another drawback, because probate records can be accessed by the public. This loss of privacy is disconcerting in a general sense, and the information can potentially cause hard feelings among interested parties.
Expenses accumulate during probate, including court costs, the executor’s fee, legal and accounting expenses, and appraisal and liquidation charges. These expenditures reduce the amount of the inheritances that will ultimately be received by the heirs.
Simplified Probate Process
There is a simplified probate process in New York that is potentially available when a small estate is being transferred. If the value of the estate does not exceed $30,000 and there is no real estate involved, the executor can file a request for this simplified process.
Transfers Outside of Probate
There are certain types of asset transfers that take place outside of the probate process. You can be proactive about the implementation of a probate avoidance strategy, and there are transfers that are simply not subject to probate.
With regard to transfers that would naturally take place free of probate, life insurance proceeds would be paid directly to the beneficiaries, and the probate court would not be involved.
If you have a payable on death account at a bank or brokerage, the transfer to the beneficiary would not be subject to the probate process. Ownership of property that is held in joint tenancy would be transferred outside of probate as well.
When it comes to intentional probate avoidance, one commonly utilized tool is the revocable living trust. You do not lose control of assets in this type of trust, so you do not have to be concerned on that level. As the grantor of the trust, you can act as the trustee and the beneficiary, and you can also dissolve the trust entirely if you ever choose to do so.
You name a successor trustee to administer the trust after you are gone when you create the trust declaration, and you name successor beneficiaries. After your passing, the successor trustee would be empowered to distribute assets to the beneficiaries outside of probate.
These are some of the ways that probate can be avoided, but there are others.
Learn More About Estate Planning!
If you would like to learn more about estate planning and nursing home asset protection, we have some fantastic resources that you can access right here on this website.
Our attorneys have prepared a number special reports that you can absorb to gain a more thorough understanding of this important process. Best of all, these resources are being offered free of charge, so there is no reason not to take advantage of this opportunity to build on your knowledge.
You can see the titles and gain personal access if you head over to our library of special reports.