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. We help our clients and their families by breaking down these important steps to relieve some of the stress so that you are able to focus on yourself and your family. The first thing to do after a loved one passes away is to arrange for their funeral and burial. Examine their important papers to see if they have a prepaid funeral plan or cemetery plot. Also, note any specific wishes they have told family members or put in writing. They might also have a small life insurance policy or a bank account with a beneficiary to provide the funds for the funeral arrangements. You should ask the funeral home to order death certificates. Request one for each financial account, plus a few extra.
Once you have a death certificate, then there are a few quick financial items that can be taken care of. Contact all credit card companies to inform them of your loved one’s passing and to cancel all cards to prevent fraud. Contact pension companies and the Veterans Administration, if applicable, to stop additional deposits and checks (the funeral home will notify Social Security). Sometimes Social Security or pension payments have to be returned if paid post-death. In addition, Social Security or pensions may have benefits for survivors, especially spouses.
Probate is the court process of “proving” a last will and testament as valid and creating an estate. The executor named in the will petitions the Surrogate’s Court to declare the will valid and to appoint them as executor. They will have to give notice or secure consent from beneficiaries and distributees. If there are no objections, the court will appoint the fiduciary and issue Letters Testamentary which the fiduciary can use to show they were appointed the executor. If there is no last will and testament, the process is similar, but a close relative will petition the court to be appointed as administrator. Of course, the court process is not easy, and an experienced trust and estate attorney is necessary to guide you through the process.
The cost of a trust and estates attorney varies based upon the complexity of the estate. The important thing to know is that you get what you pay for! When it comes to hiring a trust and estate attorney to guide you through the complex estate and trust administration process, now is not the time to be penny wise and pound foolish. You want to hire knowledgeable and experienced trust and estates attorneys like the award-winning attorneys at Cona Elder Law.
There are a number of duties depending on the nature of the estate, but generally, an executor will need to:
Any assets in your loved one’s individual name that are not joint, in trust, or do not have beneficiaries pass through their estate. Accessing these assets requires the appointment of an estate fiduciary by the Surrogate’s Court. Typical non-estate assets include retirement accounts, life insurance, annuities, joint bank accounts, and trust assets. These assets (other than trust assets) can typically be accessed by contacting the financial institution holding the asset and providing a death certificate.
You are not responsible for the debts of a loved one unless you agree to be jointly responsible for the debt (for example, a joint mortgage or co-signing a loan). However, if you inherit certain types of assets, you may be required to pay creditors out of those assets before you can keep the rest. An exception to this rule is life insurance and retirement accounts that name beneficiaries. Those pass directly to the beneficiaries and are exempt from creditors. If the estate is insolvent, there are complex rules regarding who gets paid first and how much.
The estate tax is a one-time tax based on the value of a deceased person’s assets as of their date of death if they exceed the estate tax exemption. The federal estate tax exemption is currently over $11 million and the New York estate tax exemption is currently over $5 million. The vast majority of estates do not have to pay estate taxes. However, many more estates do have to pay income taxes. An executor is responsible to ensure that the deceased’s last personal income taxes are paid, as well as any income taxes on income earned after death.
A fiduciary has a duty to account to the beneficiaries of the estate. However, the vast majority of estates are closed without a formal court accounting. The fiduciary can simply provide a short informal accounting to the beneficiaries before making distributions. An accounting provides the beneficiary with a list of the assets collected, debts, expenses, and proposed distribution. The fiduciary should ask the beneficiaries to sign a release before making distributions. This process requires no court filings. If there are disputes, a formal accounting can be filed with the court and the beneficiaries will have the opportunity to file objections.
If you have a last will and testament, the beneficiaries you name in your will inherit your assets. If you do not have a will, there are default rules in New York that state who will inherit from you and in what order (called “intestacy”). If you have a spouse and children, $50,000 plus one half of the balance of your estate will pass to your spouse, with the other half passing equally to your children. If your spouse pre-deceases you, then all assets will pass to your children in equal shares. If you have no surviving spouse or children, then your assets will pass down a line of priority starting with parents, then siblings, then nieces and nephews, etc. This is why it is so important to have a will, to make sure your assets pass exactly as you want, and not leave it up to the default rules of intestacy.
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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