When a New York resident dies "testate" (leaving a will), the Surrogate's Court will be asked to appoint the person designated in the will as the executor to administer the probate of the estate. If a person dies "intestate" (without a will), the court appoints a person called an administrator to oversee the estate. The administrator can be anyone who is eligible to share in the deceased individual's estate under New York law. This is usually the deceased's spouse, children, grandchildren, parents, or brothers or sisters. Once you are appointed as administrator by the court, you are responsible for gathering the assets, paying the debts and taxes, and distributing the estate to the heirs.
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Appointment of the Administrator
File a petition for administration of the estate with the Surrogate's Court in the county in which the deceased person died. Your do not have authority to act on behalf of the estate until you are appointed by Surrogate's Court. Notice of the petition or application to the court must be sent to potential heirs of the estate. The order issued by the court appointing you and granting you the power to act on behalf of the estate is called the Letters of Administration.
Collect the Estate Assets
Collect and take control of the assets of the deceased individual, technically referred to as the"decedent." You are responsible for keeping a record of the assets you collect, and for the safekeeping of those assets until the estate is fully distributed to the heirs. Careful records must be kept of the assets collected because the estate could be liable for taxes on income earned from them. If you do not live in New York State, be careful to comply with the law that prohibits the removal of estate assets from the state until they are distributed to the heirs.
File Inventory of Assets
File an inventory of the estate assets that have been collected. Within six months from the date of the Letters of Administration, you must file an inventory with the Surrogate's Court listing all real and personal property of the estate, including the fair market value of each item as of the date of death of the decedent. Depending upon the type of the assets collected, you may need to have them appraised by a professional appraiser to determine their value. For example, the value of a savings account on the date of death can be readily determined from a copy of a bank statement, while the value of a house would require an appraisal from a licensed appraiser.
Estate Bank Account
Open an estate bank account. This is usually a checking account into which the administrator deposits all money belonging to the estate that comes into his possession. The law forbids commingling estate assets with non-estate assets. Use the estate account to pay expenses of the estate, taxes, and distributions to the heirs.
File tax returns for the estate and the decedent, and pay all taxes and debts. State and federal income tax returns must be filed if the decedent had taxable income for the year in which he died. Income tax returns for the estate may be needed if the estate earns taxable income. If New York or federal estate taxes are due on the value of the estate, you must file them and pay the taxes from the estate assets.
Pay all debts of the estate and the decedent. It is your job to look through the financial records and mail of the decedent to determine what debts are owed. You must pay all valid debts that are presented by creditors within the first seven months following the court's issuance of the Letters of Administration. You must pay funeral expenses, taxes and debts, in that order, before distributing any assets to the heirs. Violating this rule against early distributions could make you liable if there are insufficient assets from which to pay obligations of the estate.
Distribute to the heirs the funds remaining in the estate after payment of funeral expenses, taxes and debts. New York law lists the priority and order in which relatives of the decedent share in the estate. For example, where there is a spouse and brothers and sisters of the decedent, the spouse receives the entire estate because the law gives priority to the spouse. You must get a signed release from each person to whom a share of the estate is distributed, and file all releases with the Surrogate's Court.
Estates Not Distributed Within Two Years
You must file a form with the Surrogate's Court explaining why an estate has not been closed with a final accounting within two years from the date the Letters of Administration were issued. Explain the reason the estate remains open, and show the amount of estate funds remaining in your possession. As a result of the filing of the form, the court can determine what action it must take to expedite the closing of the estate.
Closing the Estate
File the final accounting with the Surrogate's Court. The accounting shows the total value of the assets of the estate, and payments you made for debts, taxes and expenses related to the administration of the estate. You need not request a court order approving the accounting unless there is a minor child who is receiving a share of the estate. The final accounting closes the estate.