Estate administration is the process of handling a deceased person’s affairs after they pass away. The tasks necessary vary widely and are typically handled by family members or other trusted persons with the assistance of an estate attorney. If your loved one had a comprehensive estate plan in place, the process is quicker and easier than if they passed without one.
The purpose of estate administration is to proceed through the numerous tasks to settle the estate of a deceased person. These tasks include contacting Social Security and pension companies, closing out credit cards, filing court documents to become executor or administrator (sometimes called a personal representative), collecting assets, selling real estate, paying creditors, filing tax returns and paying taxes, preparing an accounting, and distributing the assets.
An estate administration attorney handles the estate administration and probate process from start to finish by providing essential legal advice. That can include preparing court documents, securing the liquidation of financial accounts, filing estate tax returns, handling disgruntled or impatient beneficiaries, transferring or selling real estate, and preparing an accounting, which can include an informal or a judicial accounting.
The usual time to contact and hire an estate administration attorney is shortly after your loved one’s funeral and burial arrangements are concluded. There are some initial steps that an estate attorney can advise you on such as dealing with life insurance, IRAs, joint accounts, and other non-probate assets, and then begin the process of preparing and filing the court documents necessary to have you become appointed administrator or executor of the estate.
Executors and administrators of estates have basically the same duties and are both considered fiduciaries. A fiduciary is someone who handles finances on behalf of another person. Every fiduciary has a duty to act for the other person’s benefit, and not their own. In the case of an estate, the executor or administrator is acting on behalf of the beneficiaries. If the person who passed away had a last will and testament, then the fiduciary for their estate is called an executor. If they instead passed away without a will, then the fiduciary for their estate is called an administrator.
If you have a last will and testament there is no legal limit to the number of executors you can appoint. However, it is strongly recommended that you try to limit it to one or two executors, with alternates. The more people in charge, the more difficult administration can be, even if the executors are not in disagreement. The administrative burden of obtaining multiple consents and signatures for everything over the months or years of probate can be very difficult. If there is no last will and testament, the court will appoint a relative as the administrator of the estate by the following priority: spouse, children, grandchildren, parents, siblings, nieces and nephews, etc. Technically, if you had six children, all six of them have the right to be administrators. However, that is not recommended for the same reasons we would recommend against having six executors: the possibility of disputes and administrative burden inhibiting even basic actions.
Similar to the difference between an executor and an administrator, the difference between estate administration and probate depends on whether there is a last will and testament. When you are filing to become the fiduciary for an estate, the court process is called probate if there is a last will and testament, and administration if there is not. However, estate administration is also commonly used to refer to the overall process of handling the estate of a deceased loved one, whether they had a will or not.
Depending on the nature of your estate and whether there are complicating factors or possible disputes between beneficiaries, it may be prudent to update your estate plan to try to avoid probate by having proper estate planning documents in place. This can include having a living trust prepared by an estate planning attorney and making sure your assets are properly titled into the trust.
Probate or estate assets are any assets in your loved one’s individual name that are not joint, not in a trust, or do not have beneficiaries. Typical probate assets include a primary residence, bank accounts, and investment accounts. Accessing these assets requires the appointment of an estate fiduciary by the surrogate’s court. Non-probate assets include life insurance, retirement accounts (401(k) and IRA), annuities, joint accounts, joint real estate, and assets held in a living trust. Non-probate assets pass directly to the individuals named with the financial institution or in the trust agreement and do not typically pass through the estate. If there is a trust there is a separate process to administer it, often requiring a combined trust and estate administration.
There is no overall time limit to administer an estate. However, there are a number of related deadlines and general fiduciary duties that must be followed. For example, an estate must be open for a minimum of seven months to allow for creditors to present any claims against the estate. If the deceased’s estate is valued more than the estate tax exemptions, an estate tax return is due within nine months of the date of death. Additionally, a final personal income tax return is due the April following the person’s death. There are some extensions available, but these items need to be handled by the required deadlines. Generally speaking, the estate administration process takes up to a year for an average sized estate. An estate with substantial assets, pending lawsuits, or disputes between beneficiaries can take longer to conclude.
There is no one-size-fits-all cost for administering an estate. There are filing and recording fees charged by the courts and county clerks for filing and recording documents based on the value of the estate. The cost of having an estate attorney assist you with this process can vary widely depending on the nature of the estate and any complicating factors, such as disinherited beneficiaries and estate litigation. Some parts of the process (like a real estate closing) may be done based on a flat fee, and other parts (probate and estate administration) are typically handled on an hourly basis.
After the death of a loved one, managing the seemingly countless number of tasks involved when you are the executor or administrator of the estate can be overwhelming and challenging — to say the least. However, you are not alone. The experienced estate administration and probate attorneys at Cona Elder Law are on your team to help you every step of the way. Contact us today to see how we can be your lifeline in a difficult time.
Cona Elder Law is a full service law firm based in Melville, LI. Our firm concentrates in the areas of elder law, estate planning, estate administration and litigation, special needs planning and health care facility representation. We are proud to have been recognized for our innovative strategies, creative techniques and unparalleled negotiating skills unendingly driven toward our paramount objective - satisfying the needs of our clients.
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