At the Law Offices of Steven M. Adler, PLLC, we are committed to helping clients on Long Island with a variety of matters pertaining to probate. We understand the importance of preparing your estate before it passes through probate to avoid costly expenses. Keep reading to find out why you should consider voluntary administration if you are worried that your loved ones will have to deal with a lengthy probate process after you pass away.
Qualifying as a Small Estate
In order to qualify as a small estate, the estate of the deceased must be valued at $50,000 or less and cannot include any real property. If the estate contains real property, a formal probate or administration proceeding must be filed. However, if the decedent owned real property jointly with the right of survivorship, the real property will pass outside of the probate process and will not be included when calculating the value of the estate for purposes of Voluntary Administration.
For example, an individual who dies with $40,000 in their bank account and a house worth $500,000 owned jointly with their partner with the right of survivorship will qualify for Voluntary Administration because their house will pass by operation of law upon their death and their estate will only be valued at $40,000, thereby qualifying as a small estate.
Voluntary Administration can also be utilized when an individual dies with the majority of their assets subject to beneficiary designations (such as with life insurance or an IRA) or owned by a trust, but still maintains a small bank account or other personal property in their name only. Because the value of the property passing subject to probate is under the statutory threshold, despite there being assets valued above $50,000 passing outside of probate, the estate still may qualify as a small estate.
These examples help to illustrate how Voluntary Administration can be very useful to those that have, or wish to engage in, extensive estate planning to avoid the costly and sometimes lengthy probate process. Voluntary Administration provides a cost-effective and efficient way to distribute the assets that remain in an individual's estate outside of the larger estate plan while accomplishing the initial goal to avoid probate.
An additional limitation to the Voluntary Administration process is where an estate is pursuing a claim for personal injury or wrongful death on behalf of the decedent. In such cases, a formal application for letters testamentary or letters of administration must be made.
What to Expect from the Voluntary Administration Procedure
The Voluntary Administration process is available whether the decedent died with or without a will. The filing fee for a Voluntary Administration is $1.00, which represents significant savings from a filing fee of up to $1,250 for estates valued at $500,000 or more.
If the decedent died with a will, then the executor named in the will can apply for Voluntary Administration. On the other hand, if the decedent died without a will, then New York State has a specific rule as to who can make the application; however, the estate can still qualify for Voluntary Administration.
Once the application is granted, the applicant will be appointed as the Voluntary Administrator of the estate and will be able to collect and distribute the assets of the decedent's probate estate in accordance with the terms of their will. Alternatively, the New York laws of intestate succession will apply if there is no will.
The recent change by New York State to increase the Voluntary Administration threshold for small estates can provide significant benefits to many individuals. Primarily, it increases access to an established court procedure that simplifies the probate and administration process by taking into account changing economic realities. You should consult with an experienced probate attorney if you have questions regarding how to take advantage of the recent change.
We Are Here to Guide You Through Probate
At the Law Offices of Steven M. Adler, our dedicated and compassionate legal professionals welcome the opportunity to discuss the option of Voluntary Administration with you. Whether you need advice configuring an estate plan for you or a loved one or want to review an existing plan, we are here to use our knowledge of the law to determine eligibility for Voluntary Administration. No matter what your circumstances are, our attorneys will guide you each step of the way.
To speak to an experienced lawyer at our law firm, please give us a call at (516) 740-1184 to schedule your case consultation.