Planning for Life’s Journey
Estate & Trust Administration Frequently Asked Questions
What Is Probate?
Probate is the process by which a Will is accepted by the Surrogate’s Court and found to be authentic. The Executor is the formally appointed with documents from the Court called Letters Testamentary. The Executor then carries out the wishes as expressed in the Will, with the court overseeing the work of the Executor and the distribution of the estate. The decedent’s property is identified and inventoried, the debts of the estate are paid and the remaining property is distributed to the estate beneficiaries.
In the event a person dies with assets in their name, but without a Will, the estate does not go through “Probate” but instead goes through a similar process called “Administration.” The person appointed by the Court is called an Administrator, who serves in the same capacity as an Executor and is given documents from the Court called “Letters of Administration.” The court oversees the administration and distribution of the estate.
Are There Fees to Be Paid to the Surrogate’s Court?
Yes. The fee to the Surrogate’s Court is calculated based on the total assets being handled by the Executor or the Administrator. These fees are fixed by law.
What Is an Executor or Executrix/Administrator or Administratrix and What Is the Difference?
The Executor (male) or Executrix (female) is the person named in a Will and appointed by the Court who is responsible for administration and distribution of an estate according to the terms of the decedent’s Last Will and Testament.
An Administrator (male) or Administratrix (female) is the person appointed by the Court to handle the estate of a decedent who did not leave a Last Will and Testament.
Both Executors and Administrators are “fiduciaries” in that each person stands in a position of responsibility with an obligation of undivided loyalty to the estate.
What Are the Differences in the Language Related to Inheritance – Beneficiary, Legatee, Distributee, Heir and Devisee?
Here is a quick guide to the differences in inheritance language.
Beneficiary – a person entitled to any part or all of an estate typically named in a will or a trust to receive property.
Devisee – a person designated in a will to receive a transfer of real property such as the family home or vacation property.
Legatee – Historically a “legatee” is someone who receives personal property (as opposed to real property) from an estate. It has come to more commonly refer to a person who inherits under a will but may not be related to the decedent such as a friend inheriting under someone’s will, or a charity.
Distributee – A person who is entitled to inherit from the person who died in the absence of a will.
Heir – “Heir” refers to blood relatives such as children, parents, siblings, nieces and nephews, grandparents, uncles, and cousins but also includes the decedent’s surviving spouse and adopted children. Heirs are usually limited to those related by blood, marriage, or adoption.
Is There a Way to Avoid my Estate Having to Go Through Probate?
If one of your objectives is to avoid the involvement of a court in managing your assets after death, there are various ways to accomplish this objective.
A Revocable Trust made and funded during your lifetime is a common vehicle used to avoid Court involvement at death. This requires the creation of the Trust, of which the creator (Grantor) often serves as Trustee during his or her lifetime. Then, the Revocable Trust must be funded. Assets are retitled out of the individual’s name into the name of the Revocable Trust. Upon the creator’s death, the terms of the Trust dictate how the assets are distributed. Most often, this achieves the objective of avoiding court involvement. Because the creator is also the Trustee, and because the Trust is fully revocable, all of the assets are available to the creator and therefore there is no loss of control or access to the assets. It is merely a management device for assets in the event of disability or at death. While a revocable trust offers no asset protection for long term care, it does afford a streamlined mechanism for the management of your assets during life should you become disabled, or at death.
Joint ownership of assets, designation of beneficiaries, and/or the designation of a “payable on death” beneficiary can also be used to avoid court involvement at death. Under New York Banking Law, there are different ways to own a bank account and the different options present opportunities for probate avoidance. In addition, any account for which a beneficiary is named is not subject to probate and passes to the named beneficiary. Should probate avoidance be a priority for you, it is important to understand that one misstep in the signing of a Last Will and Testament, naming of beneficiaries, setting up joint ownership, or establishing a revocable trust without coordination among all these things can result in your estate plan being ineffective. Consult an experienced attorney at B&C and we’ll work with you to get it right!