It would be presumptuous to assume that funds would be available within
a month or
so. The probate / administrative process can take several months or longer,
so it would not be wise to buy that new car or big ticket item that you've
had your eye on. Unfortunately, the distribution of inheritance cash or
checks is the last thing that the executor or administrator of the estate will do.
So why does it take so long for beneficiaries to receive their inheritance?
The general process for a typical estate can be involved and each state
has a specific set of laws that determine the steps required before the
estate can be closed. We outline the general process starting with the
basic question, "Did the decedent leave a will"?
Step #1: Locating the decedent's Last Will and Testament, and any other important
estate planning documents will determine the nature of the estate. If
the decedent left a will, then it will need to be probated. Probate is
the court-monitored process whereby a will is proved to the satisfaction
of the Surrogate Judge. When someone dies without a will it is referred
to as dying "intestate." Since the deceased left no directions
about the disposition of their assets, New York law provides for how those
assets will be distributed among the surviving family members. This process
is called administration. With administration the court appoints an "administrator"
to manage the estate. Although executors and administrators have different
titles, their functions are nearly identical.
For a probate proceeding the original will and a certified copy of the
death certificate with the probate petition and other supporting documents
need to be submitted to the Surrogate's Court in the county where
the decedent lived prior to his or her death. A filing fee will apply
which will be determined by the size of the estate.
Step #2: Once the will has been authenticated, the probate judge will appoint an
Executor or Administrator in the case where there is no will. All actions
by the executor / administrator will be watched by the probate court to
ensure that everything is done properly. This will also give greater protection
to any heirs or beneficiaries.
Executors / Administrators are responsible for settling the estate, which
includes gathering and managing assets and paying the decedent's taxes
and debts with the property. Not all assets of an estate go through the
probate process, such as joint bank accounts, life insurance, and retirement
accounts. Administrators also must obtain an estate identification number
from the IRS and may need to open a bank account for the estate. Other
duties under probate may include funeral arrangements and contacting lawyers
on the family's behalf.
Step #3: Valuing decedent's assets upon date of death. This can be determined
through bank, brokerage, and real estate statements. The process may also
involve capital gain calculations and handing over gifts such as jewelry
and other personal property as stipulated in the will.
Step #4: Pay the decedent's bills and administrative expenses. This step would
include notifying / identifying creditors and paying outstanding balances due.
Step #5: File a final income tax return for the decedent and an estate income tax
return if the estate earned income as well as the filing and payment of
estate taxes, if applicable and in a timely manner.
When all of the steps above have been completed, only then can the remaining
assets be distributed to heirs and beneficiaries pursuant to the will
in the case of a probate or pursuant to New York State law in the case
of an administration. As noted above, this is not a simple process. It
can be further complicated by various factors, such as types of assets,
taxes due to the state or at the federal level, how many heirs or beneficiaries
are involved, if there are any disputes, and how skilled the executor
/ administrator is at the process.
The probate / administrative process can be a lengthy one so it is best
to err on the side of caution and be patient, and avoid financial problems
stemming from decisions made prematurely.
If you are named in someone's will as an executor or you are the appropriate
person to commence an administration petition, hiring an experienced lawyer
to handle the legal aspects is critical.