A Brief Guide To Settling Your Loved One’s Affairs
Coping with the loss of a loved one is one of life’s most difficult experiences. At the outset, it is important to understand that there is no clear, single guide as to how to help a family deal with such a loss. Equally, as disheartening as the grief one feels following the passing of a family member or friend is the confusion about what the next step is.
At some point shortly after your friend or loved one has died, it will become necessary to begin the unwieldy process of settling his or her affairs. Often times this process involves a formal Court proceeding (either Probate or Administration), the collection of assets, payment of debts and the filing and possible payment of taxes. What follows, below, is a practical guide with questions and answers to some of the most important issues you must now confront.
What Are Probate and Administration and Are They Necessary?
Generally speaking, Probate and Administration are the processes of obtaining legal authority from a Court to manage a person’s affairs after death. Probate and Administration, while different in some respects, are both very similar processes: Probate refers to the Court proceeding involving the estate of an individual who died with a Will and Administration refers to the Court proceeding involving the estate of an individual who died without a Will. At this point in time, you will likely have heard both sides of the Probate and Administration “coin:” (a) “you have to probate the estate;” or (b) “why would you probate the estate; that’s only for rich people.” So, is the Probate or Administration of your loved one’s estate necessary? The answer is, it depends.
If your loved one has died owning what are loosely referred to as “probate assets,” then Probate or Administration of the decedent’s estate will generally be required. “Probate assets” are assets that were owned individually by the decedent at the time of their death. Possible examples of probate assets are bank accounts, brokerage accounts, real estate, and tangible personal property such as jewelry, home furnishings, and antiques. In fact, you may already have learned this fact the “hard way” if you have attempted to close, access or modify one of the decedent’s financial accounts, only to be told that you need “Letters” or “Letters Testamentary” or “papers from the Court.”
What Are Letters Testamentary and How Do I Get Them?
Letters Testamentary are Letters/Certificates issued by a County’s Surrogate’s Court stating that a particular person or persons have officially been appointed Administrator(s) or Executor(s) of a decedent’s estate. The “Letters” outline the Administrator’s or Executor’s authority and responsibility, and any limits that the Court may have put on such person or institution’s authority and responsibility. Most, if not all, financial institutions will require certified/stamped copies of “Letters” (either Testamentary or of Administration) before they will release information or assets to the appointed Executor or Administrator. However, even at the point that an Executor or Administrator has been appointed and “Letters” have been issued, the appointed Executor/Administrator must be extremely cautious in how they handle the estate’s assets and affairs.
I’ve Been Appointed Administrator/Executor and Have Letters Testamentary: Now What?
The temptation for many who are faced with settling the estate of a family member or loved one is to immediately distribute the assets of the decedent once they are appointed Administrator or Executor and “Letters” have been issued. Anyone who insists on proceeding in this manner does so at their own risk. New York State law holds the Administrator or Executor of an estate to the highest duty of care, and any failure to competently and properly handle the affairs of an estate may result in the Administrator or Executor being held personally liable for any losses that result from such failure(s).
The duties of an Administrator or Executor are numerous and, depending on the size and complexity of the estate, can place a heavy burden in time and effort on the appointed Administrator/Executor. An Administrator/Executor will be responsible for the following tasks, amongst many others:
Many individuals ultimately decide to hire a law firm or attorney to assist with the Probate or Administration process due to the complexity, time, effort and risk involved in handling an individual’s estate.
How Long Does The Process Take and What Does It Cost?
The length of time that the typical Probate/ Administration Process will take varies by State and depends on factors such as the size and complexity of the estate, the number of beneficiaries and their location (out of State or international beneficiaries may greatly increase the time necessary to complete the process), the variety, complexity and location of estate assets, and other factors too numerous to list. However, and on average, the Probate/Administration process in New York State should take at least 9-12 months from start to finish. Any complication or peculiarities with the estate may cause the process to take up to 2 years or more.
With respect to cost, individuals are free to handle the Probate/Administration themselves, without retaining outside assistance such as a law firm. In such a situation, the only mandatory costs are Court fees which will vary depending on the size of the estate. However, additional expenses are likely, both in terms of time, effort and money. For those who choose to hire a law firm to handle the Administration/Probate process for them, costs typically range from 3-7% of the gross value of the estate. This figure, of course, varies (both upward and downward) depending on many of the factors listed above, such as the size and complexity of the estate and any complications that may arise.
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