How to Distinguish Assets of a Deceased Person’s Estate from Corporate Assets in New York

Detailed Answer

When someone dies in New York, their personal assets pass through probate or administration as part of their estate. At the same time, a corporation established by a relative remains a separate legal entity with its own property. To avoid mixing estate assets with corporate assets, follow these key steps:

1. Review Title and Registration Documents

Identify ownership by checking how each asset is titled:

• Real property deeds and vehicle titles often list the owner’s name. If titled in the decedent’s personal name alone, it likely belongs to the estate. If titled in the corporation’s name, it remains corporate property.
• Bank and brokerage accounts have account-holder information. Joint accounts with rights of survivorship pass outside probate; sole accounts pass to the estate under EPTL § 1-2.5.

2. Examine Corporate Records

Corporations maintain records that clarify ownership:

• Articles of Incorporation and bylaws define the corporation’s purpose and initial asset contributions.
• The corporate stock ledger shows shareholders. If the decedent held shares personally, their shares pass to the estate, but the underlying corporate assets remain with the corporation.
• Meeting minutes and resolutions document formal asset transfers to or from the corporation.

3. Understand Separate Legal Entities

Under New York Business Corporation Law:

• BCL § 301 confirms that a corporation is separate from its shareholders.
• BCL § 601 requires that corporations keep separate books and records. Mixing funds may risk veil-piercing if a creditor or executor later challenges the separation.

4. Identify Estate Property

Estate assets include all property the decedent owned at death in their personal capacity. Under EPTL § 3-1.1, these assets become subject to probate administration. Common estate assets include:

• Personal bank accounts held in the decedent’s name.
• Real estate titled solely in the decedent’s name.
• Personal belongings, investments, and life insurance proceeds payable to the estate.

5. Track Transfers and Contributions

Sometimes decedents invest personal funds into a relative’s corporation or vice versa. To trace such transactions:

• Review bank statements and canceled checks for clear records of transfers.
• Look for written agreements or loan documents showing whether funds were a capital contribution, shareholder loan, or personal expense.

6. Seek Professional Assistance

If records are unclear or if a dispute arises, hiring a probate attorney and forensic accountant can help untangle asset ownership. They can perform a detailed audit and prepare documentation for the executor or court.

Helpful Hints

• Keep corporate and personal accounts strictly separate during life to avoid confusion at death.
• Maintain up-to-date corporate minutes and resolution records for all major transactions.
• Use written agreements when the decedent provided funds to the corporation or vice versa.
• Check the decedent’s will and beneficiary designations for clear guidance on transfers.
• Where uncertainty exists, consult a New York probate attorney early to prevent costly disputes.