Disclaimer: This article is for educational purposes and is not legal advice. Consult a licensed attorney for guidance specific to your situation.
Detailed Answer
In New York, the executor (if there’s a valid will) or administrator (if there’s no will) must follow a clear procedure to ensure estate expenses, taxes, and creditor claims are resolved before distributing assets to heirs. These steps involve opening a probate or administration proceeding, notifying creditors, reviewing and paying valid claims, filing accountings, and obtaining a final distribution order.
1. Open Probate or Administration
The fiduciary files a petition with the Surrogate’s Court in the decedent’s county of residence. If probating a will, refer to EPTL §3-2.1 for requirements and form: EPTL §3-2.1. Once approved, the court issues Letters Testamentary (for an executor) or Letters of Administration (for an administrator).
2. Notify Creditors
After receiving Letters, the fiduciary must notify potential creditors. Under SCPA §100, known creditors receive written notice within two months of appointment, and an additional notice is published in a local newspaper. Creditors then have eight months from issuance of Letters to present claims: SCPA §100.
3. Review and Resolve Claims
The executor reviews each claim, supporting documentation, and either allows or objects to it. Invalid or tardy claims may be disallowed. Valid claims include funeral costs, medical bills, mortgages, and credit-card balances. The fiduciary pays approved claims from the estate’s available funds.
4. Pay Estate Expenses and Taxes
Before distribution, the fiduciary must satisfy administrative expenses (court costs, executor fees), funeral expenses, and any estate or inheritance taxes. New York estate tax returns may be required if the estate exceeds the exemption threshold: see NYS Dept. of Taxation and Finance.
5. File Accounting and Petition for Final Distribution
Under SCPA Article 22, the executor submits a final accounting showing all receipts, disbursements, and distributions. Creditors with allowed claims appear or waive notice. The court reviews and issues a decree approving distribution. Only then can assets pass to heirs.
Helpful Hints
- Track all deadlines: missing the 8-month claim window can bar valid claims.
- Keep detailed records of notices, claims, payments, and receipts.
- Use a separate estate bank account to avoid commingling personal assets.
- Consult a tax professional for estate tax returns if the estate is large.
- Consider hiring an attorney to prepare the petition and accountings accurately.