Fortunately for most people, the probate process is something that most people don’t have to encounter many times in their lives, but for that same reason, it can be very overwhelming and raise a lot of questions. This guide will help shed some light on the probate process in New York and address some of the most common questions.
Table of Contents
- New York Probate Process
- How Long Does Probate Take in New York?
- How Much Does an Estate Have to Be Worth to Go to Probate?
- Understanding Probate Costs
- Finding the Right Probate Lawyer
- What if There Is No Will?
- What if the Executor Does Not Probate the Will?
- How Can I Avoid Probate in the First Place?
- Is it Easy to Sell a House in Probate in New York
- Final Thoughts
What is Probate?
Probate is the process where a Will is established as valid by the court. The Will is presented to the Surrogate’s Court of the State of New York to prove that it is in fact the Last Will and Testament of the person who died. The probate process occurs in the state and county where the decedent was considered to have “domiciled” when they died.
New York Probate Process
The New York probate process is, at a high level, not extremely complex. However, there are a lot of legal formalities that must be followed. Additionally, the steps outlined below demonstrate settling a straightforward estate, but this process can be easily complicated by disputes over inheritance, lawsuits, and other issues that may arise.
1. Starting the Probate Process
Obtain a copy of the Will and Death Certificate
The first step is to find the original and most recent copy of the Will. For this reason it is often recommended to store your will in a safe place (i.e. fireproof box) and that the executor know where it is stored, since they will ultimately be the one who will need it. Some common storage options for a signed Will are in a safe deposit box or at an estate attorney’s office, however, those each have potential challenges. Safe deposit boxes can be tricky to access once the owner has died unless the executor is named on the account. The attorney’s office can pose a challenge because these offices often change hands and staff members which can make it tough to locate the document. A certified copy of the death certificate must also be obtained and is required to start the probate process.
Hire a probate attorney
The executor of the estate hires a probate attorney in New York to help settle the estate and handle any administration, legal, and tax ramifications. An attorney is highly recommended and commonly used because most family members are unfamiliar navigating the complex process. To start the process, the attorney will file the Will and death certificate as part of a probate petition with the New York Surrogate’s Court located in the county where the decedent resided, requesting that the Will be probated and that the executor be officially appointed to administer the estate.
Jump to – Finding the Right Probate Lawyer
2. Inventorying the Assets and Debts
Once the letters of administration are issued, they formally give the personal representative or executor the authority to collect and distribute the Decedent’s property according to the law and the Will. The executor is then responsible for inventorying all assets and debts that are part of the estate. This can include, but is not limited to, bank accounts, investments, safe deposit boxes, insurance policies, real estate, mortgages, credit card bills, medical bills, taxes, etc.
Financial assets like bank accounts and investments are easy to quantify and measure, however illiquid assets like real estate, automobiles, and antiques need to be appraised, often by an expert, and their value at the time of death needs to be established. The appraised value is what is used when determining their value to the estate.
3. Pay Off Debts and Taxes
Throughout this process you may also want to work with an accountant because a Federal Estate Tax Return (Form 706) needs to be filed and any taxes due are to be paid by the estate. This Estate Tax Return is due 9 months after the decedent’s death, however, a six month extension is available as long as the extension is filed before the due date and any estimated taxes are paid before the original 9 month due date.
The vast majority of settled estates are too small to owe any estate tax. As of 2021, the federal estate tax only applies if the decedent’s estate value (assets minus debts) is worth $11.7 million or more and New York State’s estate tax only applies on estates worth over $5.93 million. Forms 1040/1041 for Federal Income Tax must also be filed which declare any income that was generated in the estate.
Jump to – Estate Tax Brackets
In addition to Federal and State taxes that may be owed, the executor must pay off other debts such as loans, mortgages, credit cards, utility bills, and medical bills. If there is not enough liquid cash on hand to pay these debts, the executor has the responsibility to liquidate assets like real estate in order to pay off the debts prior to any money getting distributed.
4. Distribute the Assets
If there are any assets left in the estate after paying all debts and taxes, the assets are then to be distributed to the beneficiaries according to the Will. At this stage, assets may again need to be liquidated in accordance with the Will or to facilitate distribution to the beneficiaries.
Once the assets have been distributed, a petition should be filed with the Surrogate’s Court to close the estate.
How Long Does Probate Take in New York?
One of the most common questions people who are about to start the New York probate process ask is, “how long does probate take?” While the question is simple, the answer can vary. It is common to see a probate length of around 9 to 12 months when there are no complications, with more complicated situations spanning a few years.
However, there are many areas where these probate delays occur, some are avoidable and some are not. If you are trying to minimize the probate length, it is important to act quickly in selecting a lawyer and getting your executor appointed, returning all documents requiring signatures, and collecting all the information (Will, death certificate, account information, etc.). However, some outside factors can derail the process and make the probate process take much longer. For example, the New York court system saw a lot of backups and delays from coronavirus which slowed the rate at which probate cases could be settled. Additionally, complications locating beneficiaries or someone who contests the validity of the Will can add years to the time probate takes.
How Much Does an Estate Have to Be Worth to Go to Probate?
A Will only needs to go through the probate process if the decedent died with assets valued at $50,000 or more. Probate is necessary only for assets that are solely owned in the name of the deceased person.
If the estate value is under this threshold, then it will be eligible for the small estate program which is a simplified process that does not involve the formality of a full court probate administration.
What Assets are Excluded from the Probate Process?
However, not counted as part of that $50,000 limit are assets that already have their own beneficiaries specified, examples include:
- Assets held in a trust
- Bank accounts with a beneficiary named
- Retirement accounts such as 401ks and IRAs
- Life insurance policies with a beneficiary named
- A home owned as a joint tenancy with rights of survivorship
- Jointly held savings, checking, and investment accounts
Understanding Probate Costs
The total cost of probate in New York is made up of a few different costs.
Probate Court Filing Fees
The first cost of probate in New York is the court’s filing fees which are variable based on the estate’s value. These fees are charged according to the following schedule:
|Less than $10,000||$45|
|$10,000 – $19,999||$75|
|$20,000 – $49,999||$215|
|$50,000 – $99,999||$280|
|$100,000 – $249,999||$420|
|$250,000 – $499,999||$625|
A New York executor is entitled to receive a commission for administering the estate. These fees are specified by New York State and are based on the value of the estate with a commission rate that decreases the larger the estate. The commission is 5% on the first $100,000 of the estate, 4% on the next $200,000, 3% on the next $700,000, 2.5 % on the next $4,000,000 and 2% on any amount above $5,000,000.
In case that is confusing, here is an example – if there is an estate worth $1,000,000 the executor would receive the following commission:
5% x $100,000 = $5,000
4% x $100,000 = $4,000
3% x $500,000 = $15,000
2.5% x $300,000 = $7,500
Total = $31,500
Note that if you or a family member is acting as the executor, you can choose to forego these fees. These fees define the maximum amount an executor is allowed to charge.
Probate Attorney Costs
While the other costs we’ve discussed are mandated by New York State, there is no set amount for probate lawyer fees. Whenever you ask an attorney about the cost of probate, you will typically get an answer of “it depends.” Probate attorney costs typically start at around $3,000 for setting a simple estate but vary greatly depending on the complexity of your particular situation. You may find some attorneys willing to give a flat price for a simple situation that is boilerplate, but for anything more complex you will find the attorneys charge a retainer and bill you hourly or they will charge you a percentage of the estate’s value.
Federal Estate Taxes
Earlier we discussed filing your estate tax returns and here we’ll go into more detail about the actual costs of estate tax. As of 2021, for the federal estate tax to come into play, the estate’s value must be more than $11.7 million. Only the amount over $11.7 million is taxed according to the following schedule.
|Taxable amount||Tax rate||Tax owed|
|$0 to $10,000||18%||18% of taxable amount|
|$10,000 to $20,000||20%||$1,800 plus 20% of the amount over $10,000|
|$20,000 to $40,000||22%||$3,800 plus 22% of the amount over $20,000|
|$40,000 to $60,000||24%||$8,200 plus 24% of the amount over $40,000|
|$60,000 to $80,000||26%||$13,000 plus 26% of the amount over $60,000|
|$80,000 to $100,000||28%||$18,200 plus 28% of the amount over $80,000|
|$100,000 to $150,000||30%||$23,800 plus 30% of the amount over $100,000|
|$150,000 to $250,000||32%||$38,800 plus 32% of the amount over $150,000|
|$250,000 to $500,000||34%||$70,800 plus 34% of the amount over $250,000|
|$500,000 to $750,000||37%||$155,800 plus 37% of the amount over $500,000|
|$750,000 to $1,000,000||39%||$248,300 plus 39% of the amount over $750,000|
|$1,000,000 and up||40%||$345,800 plus 40% of the amount over $1,000,000|
New York State Estate Taxes
New York is one of 12 states that has their own estate tax. New York’s estate tax only applies if the estate is valued at over $5.93 million (as of 2021 – it gets adjusted for inflation annually). Like the Federal estate tax, the NY estate tax rates are graduated. However, there is one big difference between the New York and Federal estate tax – New York has an estate tax “cliff.”
New York gives a 5% buffer on the $5.93 million figure which brings the maximum exclusion $6,226,500. However, if the estate exceeds this amount, even by $1, then you will owe New York estate tax on the entire amount of the estate, back to dollar one.
Finding the Right Probate Lawyer
Ideally the deceased had already been working with an estate planning attorney before their death to help them develop an estate plan. This attorney is likely the first person you should consider to settle the estate because they are intimately familiar with the decedent’s estate plan and situation.
Choose the Right Probate Lawyer for your Situation
If the decedent wasn’t already working with an attorney, you’ll want to seek a new attorney to settle the estate. When looking for an attorney it is important to look for someone that specializes in your particular situation. For example, certain attorneys mainly work with small estates, others with very large estates, some specialize in dealing with a lot of real estate or investment properties, and others specialize in family businesses. When evaluating your situation it is important to consider whether you think there will be any issues or people that may contest the Will, as you should seek out an attorney with that speciality so you won’t be forced to switch down the road. Whatever you do, it is suggested that you hire an attorney that specializes in probates and estate planning, not someone who does this on the side.
Finding a Probate Attorney Who You Can Communicate With
In addition to obviously finding an attorney who is skilled and competent, it is important to find an attorney you are able to work well with. Since this process will span many months or years, you’ll want to interview the attorney and ensure you’ll have a successful working relationship. Two of the key things to look for is whether they use legal jargon or are they able to explain concepts in ways that you understand and if they are truly listening and understanding any concerns that you may have.
What if There Is No Will?
It is estimated that about half of American adults do not have wills. So the case where someone dies without a will is not as uncommon as you might expect. When a person dies without a will, they have died “intestate” (it is called “testate” when a will is left) which means that the person’s property will get distributed as defined by New York laws. The closest living relatives will be the heirs, but exactly who receives inheritance and how much they receive is dependent on the surviving family structure. However, the lack of existence of a will does not mean that the estate can avoid probate.
The surviving spouse of the descendant inherits the entire estate if there are no children. However, if there are other descendants, the surviving spouse receives the first $50,000 and the remaining estate is divided with 50% to the spouse and 50% to the descendants. If there is no spouse, the entire estate passes to the descendants. If there is no spouse or descendants, the estate passes to the decedent’s parents, if no parents, to the decedent’s siblings, and if no immediate family members, the estate is split equally between the mother’s father’s relatives. As you can see there are a lot of possibilities, but they are all outlined by New York laws so it is important to consult an attorney to figure out the situation you are in.
What if the Executor Does Not Probate the Will?
If the executor doesn’t probate the estate and it was necessary, there are a number of problems that can arise. First and foremost, the executor could be liable for any damages that were caused to those who would have benefited from the estate, both beneficiaries and creditors.
There is also the risk that the assets in the estate that should have gone through the probate process will not be legally transferred to the heirs and this clouded title will leave the heirs unable to sell the property. Additionally, the estate may continue to incur expenses related to those assets such as property taxes. So if you are the executor of an estate, it is in your personal best interest and the best interest of the heirs with whom you have a fiduciary duty, for the estate to go through the proper probate process.
How Can I Avoid Probate in the First Place?
Pre-planning is the best way to avoid probate because once the death occurs it is too late. There are a number of strategies that you can work with an estate attorney on in order to avoid the estate from going through probate.
One of the most common ways to avoid probate is to create a living trust. You place your assets “in trust” which get managed by a trustee for the benefit of the eventual beneficiaries. There are both revocable and irrevocable living trusts which have different implications and benefits, so it is best to discuss this with your estate attorney and/or accountant and see which may be the best option for your situation and goals. Many people think that trusts are only for the rich, but putting your assets into a living trust can have many estate planning benefits aside from probate avoidance for families of all income levels.
While a living trust is a more comprehensive estate planning tool that also helps to avoid probate. Many of your assets such as bank accounts, investments, and insurance policies already have the built-in ability to name a beneficiary. By naming the beneficiary directly on each of these accounts, they won’t need to go through probate and will pass directly to the designated beneficiaries.
Similarly, for real estate, there are different ways to hold ownership of a property. When a property is owned as a joint tenancy with right of survivorship, that means that the co-owners automatically inherit the property if one of the owners passes away. This process for transferring ownership to the co-owners is very simple and doesn’t require going through the probate process.
Is it Easy to Sell a House in Probate in New York?
The idea of inheriting a house that has to go through the probate process can be a daunting thought. For most people, their real estate is their most valuable asset, and it is also much more complex than a bank account or insurance policy to transfer and settle. Here are a couple of considerations to ensure the transfer or sale of the property goes smoothly.
Agreeing on What to Do With a House in Probate
The first complication that often comes up when dealing with a house in probate is finding a balance between what the different heirs want to do with the property. While it is ultimately up to the executor, who is acting as a fiduciary, different desired outcomes for various heirs can make that very difficult. Unlike other assets, selling a family home often has a lot of emotion and is not always viewed from a financial perspective. This issue can be further complicated if one of the multiple heirs is residing in the property – ideally the Will will specify what should happen to the property to avoid any fights between the heirs, but this is not often the case.
Removing Items From a Home Before Probate & Securing the Property
If you are going down the path of selling the home, you want to make sure that you don’t remove and distribute the personal property before it has been inventoried and gone through probate – remember that the items in the home are part of the estate. You also need to ensure that the home is appropriately secured as any damage or loss of value by not doing so can be seen as negligence by the executor and in doing so could result in the executor being liable. If the house is going to sit vacant, be sure to install an alarm, a water leak detection system, and appropriately winterize the house.
Selling a House in Probate
As you can see, the executor has a lot of responsibilities and tasks on their plate in order to settle the estate and selling a house in probate is often seen as one of the more difficult ones – but it doesn’t have to be. If you want more information, in another blog post we discuss selling a house in probate in more detail and explain why selling to a real estate investor and cash buyer like Leave The Key Homebuyers is a popular option.
Don’t fear the probate process itself. As with anything, uncommon complications can pose a challenge, but in the majority of cases the probate process in New York is a fairly simple process as long as you surround yourself with a good team of professionals to help guide you.
If you want to sell a home in probate, here is how easy it is with Leave The Key Homebuyers:
- Contact Leave The Key Homebuyers via phone or website for a cash offer on the probated property.
- Schedule a walk-through with them at your convenience, and then get your cash offer. Don’t forget to file a petition to sell the property.
- Wait for the New York probate court to approve the petition filed.
- After the court approves, schedule the closing with Leave The Key Homebuyers and distribute the funds to the heirs.
We hope you found this blog post helpful however the material and information in this article are for general information purposes only. You should not rely upon the material or information within this article as a basis for making any business, legal or financial decisions. Be advised to seek the advice of a New York estate attorney regarding your probate situation if you have any questions or want to learn more about New York probate laws.