Under New York law, when you have been named as executor or administrator of the estate of another person, you assume certain “fiduciary” duties, requiring that you act in the best interests of the estate and its beneficiaries. One of the most important duties is the requirement that you identify, locate and collect all assets that are part of the estate. The failure to do so can leave you liable for a claim of breach of your fiduciary duty.
Finding and Collecting Estate Property
According to the New York probate laws, an executor or administrator must act “diligently” and must use “proper avenues” to fully account for and obtain all estate assets. One of the more common ways of accomplishing this task is to file a petition with the probate court to either obtain property or gather information regarding estate property. There are a few ways you can do this:
- You can request production of documents from a third party to determine whether they have estate property or know where it may be found
- You can depose a third party—ask them questions under oath—to accomplish the same objective
- If the third party is in possession of property that may belong to the estate, you can initiate a proceeding in the probate court to determine ownership
- Perform multiple searches
Beneficiaries and heirs also have the right to bring an action against an executor or administrator who has wrongfully claimed private property as estate property. Section 2105 of the Surrogate Court Procedure Act allows for a “proceeding to compel delivery of property by a fiduciary which is claimed by another.”
These matters can be very complex, so you don’t want to try to resolve them without an experienced New York estate administration attorney. Bonnie Lawston has the skill, knowledge, experience and resources to protect your interests in an estate dispute.
Guidelines for Individual Executors & Trustees
After an individual’s death, his or her assets will be gathered, business affairs settled, debts paid, necessary tax returns filed, and assets distributed as the deceased individual (generally referred to as the “decedent”) directed. These activities generally will be conducted on behalf of the decedent by a person acting in a fiduciary capacity, either as executor (in some states called a personal representative) or as trustee, depending upon how the decedent held his or her property.
As a first step, it is helpful to know the meaning of a few common terms:
- Fiduciary – An individual or bank or trust company that acts for the benefit of another. Trustees, executors, and personal representatives are all fiduciaries.
- Grantor – (Also called “settlor” or “trustor”) An individual who transfers property to a trustee to hold or own subject to the terms of the trust agreement setting forth your wishes. For income tax purposes the same term is used to mean the person who is taxed on the income from the trust. Confusing, but different concepts.
- Testator – A person who has made a valid will (a woman is sometimes called a “testatrix”).
- Beneficiary – A person for whose benefit a will or trust was made; the person who is to receive property, either outright or in trust, now or later.
- Trustee – An individual or bank or trust company that holds legal title to property for the benefit of another and acts according to the terms of the trust. This can be confusing in that you can sometimes be both a trustee and a beneficiary of the same lifetime (inter-vivos) trust you established or a trust established by someone else for you at their death (testamentary trust).
- Executor – (Also called “personal representative;” a woman is sometimes called an “executrix”). An individual or bank or trust company that settles the estate of a testator according to the terms of the will, or if there is no will in accordance with the laws of the decedent’s estate (intestacy), although a person acting in intestacy may be called by a different name, such as administrator.
- Principal and Income – Respectively, the property or capital of an estate or trust and the returns from the property, such as interest, dividends, rents, etc. In some cases, gain resulting from appreciation in value may also be income.
Other defined terms may be found in our Glossary.
As a general rule, the administration of an estate or trust after an individual has died requires the fiduciary to address certain routine issues and follow several standard steps to distribute the decedent’s assets in accordance with his or her wishes. These guidelines focus on activities that occur in an estate or trust immediately after the individual has died.
Most fiduciaries retain an attorney who specializes in the area of trusts and estates to assist them in performing their duties properly. An attorney’s advice is very helpful in ensuring that you understand what the will or trust and applicable state law provide.
It is the fiduciary’s responsibility to collect all assets comprising an estate or trust.. Briefly, one must obtain formal authorization, Letters Testamentary, from the court. A court order and authorized Letters are issued. Other assets, such as insurance, may have to be applied for by filing claims. The usual practice is to engage a professional appraiser to value the decedent’s tangible property, such as household furniture, automobiles, jewelry, artwork, and collectibles. Depending on the nature and value of the property, you may or may not need the services of a specialist appraiser if, for example, the decedent had rare or unusual items or was a serious collector. Real estate, whether residential or commercial, and any business interests also must be valued in different ways. Tax returns, insurance and other items will need to be dealt with before the Estate is closed. Our staff and attorney will guide you through the process including prepay contract of sale, preparing the real estate for sale and closing, accounting documents and closing documents.
Contact the Law Office of Bonnie Lawston
At the Law Office of Bonnie Lawston, we focus our estate administration practice on estates subject to probate in Nassau County and Suffolk County on Long Island. Contact our office online or call us at 631-425-7299 or 24/7 to set up a free initial consultation.