QUICK START GUIDE FOR NEW YORK ESTATE EXECUTORS
AND ADMINISTRATORS
The Job of Executor or Administrator Comes with a
Great Deal of Responsibility
The Executor or Administrator is the person tasked with managing a decedent's
estate. The Executor need not be a relative of the deceased. The designated
person may be a relative, friend or trusted advisor. In fact, the Executor may
not be a person at all - financial institutions and some corporations are
qualified to serve. On the other hand, Administrators are usually the closest
next-of-kin as determined by state law.
The title "fiduciary" refers to an executor, administrator, trustee or guardian.
When a decedent leaves a will (testate), the proceeding to appoint a fiduciary is
called a probate proceeding. An executor is the person or institution designated
in a will to administer an estate. If the decedent died without a will (intestate),
the proceeding is called an administration proceeding and the Surrogate’s Court
appoints an administrator who performs duties similar to those of an executor.
The Executor or Administrator has a fiduciary duty to the estate as well as its
beneficiaries and creditors. Which means that he or she is held to a very high
degree of care. A fiduciary must be extremely faithful towards the estate, its
beneficiaries and creditors and must not put his or her own interests ahead of
that duty.
How Do I Become an Administrator or Executor?
In New York, the Executor / Administrator is appointed by the Surrogate’s Court
located in the county where the decedent resided. Once the Will is admitted to
probate, the Executor is appointed and may proceed to administer the estate.
Note that before the Will is probated, the person named as Executor has no
authority to act.
If there is no Will, an Intestate Administration proceeding is filed. The court will
then appoint an Administrator and he or she will have all of the powers of an
Executor.
What are the Differences Between an Estate Executor
and Administrator?
The Executor must ensure that the decedent's objectives and goals, as stated in
the Will, are faithfully carried out. The job of the Administrator differs in that he
or she must make certain that the estate is settled according to New York's laws
of intestacy. However, both the Executor and Administrator must protect the
decedent's property until all debts and taxes are paid. Then make certain that
the balance is transferred to those people entitled to it.
I’ve Been Appointed Executor or Administrator, Now
What?
If you are represented by an attorney, look to your attorney for guidance on
how to proceed. If you are acting on your own, you should do as must research
on the topic as possible. There are many books available on the subject (e.g.,
The Executor’s Guide published by Nolo). If you prefer not to purchase a guide,
try doing some research at your local public library.
A basic checklist of estate settlement tasks is provided below.
•
Make a list of the decedent's assets and protect them by notifying the
financial institutions of the death and your appointment.
•
Obtain professional appraisals of real property and personal property (e.g.
art, jewelry, furniture), if needed.
•
Within in six (6) months of your appointment as fiduciary, you are required
to file an inventory listing all the decedent's personal and real property with
the court.
•
Apply for a tax identification number for the estate from the IRS.
•
Once you have collected some funds, open an estate checking account. You
are required to keep estate funds separately. You must not commingle
estate funds with any other funds.
•
Determine if there are creditors of the estate and whether their claims are
valid.
•
Pay estate debts and expenses (e.g., funeral expenses, court fees, attorney
fees, appraisal costs, etc.).
•
Keep careful and detailed records of financial transactions (i.e., make a
ledger and record all income and expenses).
•
Have the decedent’s final income tax return and estate income tax returns
prepared and filed, if needed.
•
Federal and State estate tax returns should be prepared and filed on time, if
required.
•
Pay the balance of estate funds to the beneficiaries of the will or to the
intestate distributees. It is a good idea not to make any distributions without
first obtaining a release from each beneficiary.
Is an Executor or Administrator Entitled to be Paid?
Generally, yes. Most states make allowances for compensation (commissions)
to the Executor or Administrator for services rendered to the estate. The
amount of compensation is normally set by law and differs from state to state.
Compensation received by Executor or Administrator is taxable income and
must be reported on a personal income tax return. However, funds received as
a beneficiary are not considered taxable income. Before accepting
compensation, the tax implications should be discussed with a qualified tax
advisor or attorney. Also, the terms of the Will may dictate whether or not the
Executor is entitled to compensation.
For more information about Executor’s fees and to use our New York
commission calculator.
Estate Taxes - An Important Note
If the estate is subject to federal and/or state estate taxes, a return must be
filed and the taxes paid within 9 months of the date of death. If it is filed late or
incorrectly, there may be penalties assessed. The unwary Executor or
Administrator may be personally liable for such penalties.
Note that the Estate Tax and Fiduciary Income Tax are separate and distinct
taxes and many estates are subject to both.
How do I close the estate?
There are a few options available to close an estate. If you have obtained
releases from all beneficiaries of the estate, you may file them with the court.
Releases discharge you from your duty as fiduciary. The filing of a final judicial
accounting may be required if a beneficiary is a minor, or a person under a
mental disability. It may also be necessary if there is a residuary charitable
beneficiary or if the estate is insolvent. It is best to consult with an experienced
estate attorney to determine the best course of action.
Don’t go it alone…
QUICK START GUIDE FOR NEW
YORK ESTATE EXECUTORS AND
ADMINISTRATORS
The Job of Executor or
Administrator Comes with a
Great Deal of Responsibility
The Executor or Administrator is the
person tasked with managing a decedent's
estate. The Executor need not be a
relative of the deceased. The designated
person may be a relative, friend or trusted
advisor. In fact, the Executor may not be a
person at all - financial institutions and
some corporations are qualified to serve.
On the other hand, Administrators are
usually the closest next-of-kin as
determined by state law.
The title "fiduciary" refers to an executor,
administrator, trustee or guardian. When a
decedent leaves a will (testate), the
proceeding to appoint a fiduciary is called
a probate proceeding. An executor is the
person or institution designated in a will to
administer an estate. If the decedent died
without a will (intestate), the proceeding is
called an administration proceeding and
the Surrogate’s Court appoints an
administrator who performs duties similar
to those of an executor.
The Executor or Administrator has a
fiduciary duty to the estate as well as its
beneficiaries and creditors. Which means
that he or she is held to a very high degree
of care. A fiduciary must be extremely
faithful towards the estate, its
beneficiaries and creditors and must not
put his or her own interests ahead of that
duty.
How Do I Become an
Administrator or Executor?
In New York, the Executor / Administrator
is appointed by the Surrogate’s Court
located in the county where the decedent
resided. Once the Will is admitted to
probate, the Executor is appointed and
may proceed to administer the estate.
Note that before the Will is probated, the
person named as Executor has no
authority to act.
If there is no Will, an Intestate
Administration proceeding is filed. The
court will then appoint an Administrator
and he or she will have all of the powers of
an Executor.
What are the Differences
Between an Estate Executor
and Administrator?
The Executor must ensure that the
decedent's objectives and goals, as stated
in the Will, are faithfully carried out. The
job of the Administrator differs in that he
or she must make certain that the estate is
settled according to New York's laws of
intestacy. However, both the Executor and
Administrator must protect the decedent's
property until all debts and taxes are paid.
Then make certain that the balance is
transferred to those people entitled to it.
I’ve Been Appointed Executor
or Administrator, Now What?
If you are represented by an attorney, look
to your attorney for guidance on how to
proceed. If you are acting on your own,
you should do as must research on the
topic as possible. There are many books
available on the subject (e.g., The
Executor’s Guide published by Nolo). If
you prefer not to purchase a guide, try
doing some research at your local public
library.
A basic checklist of estate settlement tasks
is provided below.
•
Make a list of the decedent's assets
and protect them by notifying the
financial institutions of the death and
your appointment.
•
Obtain professional appraisals of real
property and personal property (e.g.
art, jewelry, furniture), if needed.
•
Within in six (6) months of your
appointment as fiduciary, you are
required to file an inventory listing all
the decedent's personal and real
property with the court.
•
Apply for a tax identification number
for the estate from the IRS.
•
Once you have collected some funds,
open an estate checking account. You
are required to keep estate funds
separately. You must not commingle
estate funds with any other funds.
•
Determine if there are creditors of the
estate and whether their claims are
valid.
•
Pay estate debts and expenses (e.g.,
funeral expenses, court fees, attorney
fees, appraisal costs, etc.).
•
Keep careful and detailed records of
financial transactions (i.e., make a
ledger and record all income and
expenses).
•
Have the decedent’s final income tax
return and estate income tax returns
prepared and filed, if needed.
•
Federal and State estate tax returns
should be prepared and filed on time, if
required.
•
Pay the balance of estate funds to the
beneficiaries of the will or to the
intestate distributees. It is a good idea
not to make any distributions without
first obtaining a release from each
beneficiary.
Is an Executor or
Administrator Entitled to be
Paid?
Generally, yes. Most states make
allowances for compensation
(commissions) to the Executor or
Administrator for services rendered to the
estate. The amount of compensation is
normally set by law and differs from state
to state.
Compensation received by Executor or
Administrator is taxable income and must
be reported on a personal income tax
return. However, funds received as a
beneficiary are not considered taxable
income. Before accepting compensation,
the tax implications should be discussed
with a qualified tax advisor or attorney.
Also, the terms of the Will may dictate
whether or not the Executor is entitled to
compensation.
For more information about Executor’s
fees and to use our New York commission
calculator.
Estate Taxes - An Important
Note
If the estate is subject to federal and/or
state estate taxes, a return must be filed
and the taxes paid within 9 months of the
date of death. If it is filed late or
incorrectly, there may be penalties
assessed. The unwary Executor or
Administrator may be personally liable for
such penalties.
Note that the Estate Tax and Fiduciary
Income Tax are separate and distinct taxes
and many estates are subject to both.
How do I close the estate?
There are a few options available to close
an estate. If you have obtained releases
from all beneficiaries of the estate, you
may file them with the court. Releases
discharge you from your duty as fiduciary.
The filing of a final judicial accounting may
be required if a beneficiary is a minor, or a
person under a mental disability. It may
also be necessary if there is a residuary
charitable beneficiary or if the estate is
insolvent. It is best to consult with an
experienced estate attorney to determine
the best course of action.
Don’t go it alone…