Disclaimer: This article is for informational purposes only and does not constitute legal advice.
Detailed Answer
During probate in New York, the personal representative (executor or administrator) must manage estate assets, pay debts and ongoing bills, and maintain detailed records. Below is a step-by-step guide under New York law.
1. Secure Court Authorization
File a probate petition in Surrogate’s Court to obtain Letters Testamentary or Letters of Administration. These letters grant legal authority to collect assets, pay bills, and deal with creditors.
2. Open an Estate Bank Account
Once you have letters, open a bank account titled “Estate of [Decedent Name],” using court-issued documents. Deposit checks (life insurance proceeds, dividends, account balances) and use this account for all estate-related receipts and disbursements.
3. Pay Priority Expenses
Certain costs receive payment priority under SCPA §1502:
- Funeral and burial expenses
- Expenses of last illness
- Administrative costs (court fees, bond premiums, appraisal fees)
4. Notify Creditors
Publish and mail notice to creditors under SCPA §1805. Creditors generally have eight months from the first publication to file claims. Only timely, valid claims become estate liabilities.
5. Manage Ongoing Bills
Regular bills—utilities, mortgage or rent, insurance, property taxes—are necessary to preserve estate value. These fall under “expenses of administration” and may be paid directly from the estate account. If cash flow is limited, you may petition the court for interim allowances or partial distributions to cover these costs.
6. Keep Detailed Records and Account to the Court
Under SCPA §1803, fiduciaries must maintain accurate accounts of all receipts, expenses, and distributions. You will file interim or final accountings with the Surrogate’s Court, showing how funds were handled and justifying each payment.
Helpful Hints
- Create a centralized spreadsheet for all estate transactions.
- Keep digital and paper copies of bills, receipts, and communications.
- Consult a probate attorney early to clarify duties and deadlines.
- Use accounting software to track due dates for taxes and insurance.
- Consider bonding options if the estate lacks liquid assets to cover expenses.
- File for interim allowances if the probate process extends beyond one year.