EXECUTOR DUTIES AND RESPONSIBILITIES IN NEW YORK Understand the Duties and Responsibilities of an Executor and Why You Need to Dedicate the Appropriate Amount of Time and Attention to Selecting Your Executor
LAW OFFICES OF BARTON P. LEVINE www.bartonlevine.com
Creating a comprehensive estate plan will require you to make a number of important decisions. The majority of these decisions will involve the distribution of your estate assets upon your death; however, there is one decision that has nothing to do with your assets directly but will have a huge impact on the success of your overall plan. That decision is the appointment of the executor in your Last Will and Testament. People often make this decision without giving it much thought. They simply jot down the name of
Your executor is the person, bank, or trust company who will be responsible for overseeing the probate process.
a spouse, parent, or adult child as executor and then move on to what they perceive to be more important decisions. With a more thorough understanding of the duties and responsibilities of an executor you should realize what an important job this is and understand why you need to dedicate the appropriate amount of time and attention to selecting your executor.
WHY DO I NEED AN EXECUTOR? When you die, you will leave behind an estate. Your estate consists of all of the assets owned by you at the time of death. Your estate may be small, consisting of nothing more than household belongings, some cash on hand, and maybe a vehicle or your estate could include valuable assets such as multiple properties, investment accounts, and a significant amount of cash in the bank. Regardless of the size of your estate the laws of the State of New York require your estate to be probated when you die. Your executor
Executor Duties and Responsibilities in New York
www.bartonlevine.com
2
is the person, bank, or trust company who will be responsible for overseeing the probate process. The purpose of probate is twofold. First, probate ensures that the assets you leave behind are legally transferred to the intended beneficiary or heir. Second, probate allows creditors of the estate to file claims against the estate. If you die intestate, or without leaving behind a Valid Last Will and Testament, a court will appoint someone, an “administrator�, to oversee the probate process.
OPENING PROBATE Your executor’s first responsibility when you die is to secure estate assets to the best of his or her ability and then petition the appropriate court to begin the probate process. For very small estates there are alternatives to formal probate; however, if formal probate is required your executor will need to prepare the appropriate legal documents and submit them along with a certified death certificate and your original copy of Last Will and Testament to the appropriate court. Because of the complex legal issues often involved in the probate process, as well as the sheer volume of legal documents that will need to be prepared, your executor will likely retain the services of an estate planning attorney in
Executor Duties and Responsibilities in New York
www.bartonlevine.com
3
connection with the probate of your estate. Ultimately, however, your executor is responsible for overseeing the probate process.
ACCOUNTING FOR YOUR ESTATE ASSETS Once a probate proceeding has officially been opened your executor will need to locate, inventory, and value all of your estate assets. For each asset that is identified your executor must determine if that asset is required to be included in the probate process or is an asset that passes outside of the probate process. Life insurance proceeds, for example, almost always pass to the beneficiaries outside of probate. For assets that must be included in the probate your executor must determine their value. This frequently requires the assistance of one or more professional appraisers. When all of the assets have been valued your executor must create an inventory and submit that to the court.
NOTIFYING CREDITORS Most estates leave behind debts. To ensure that all creditors of your estate have an opportunity to file a claim against the estate your executor must personally notify all known creditors and notify unknown creditors by publication. Once notice has been given, creditors have a statutory period
Executor Duties and Responsibilities in New York
www.bartonlevine.com
4
of time within which claims against the estate must be filed. Your executor must review each claim and decide whether to approve the claim or deny the claim. If a claim is approved it is paid out of estate assets. If sufficient liquid assets are not available to pay approved claims your executor may need to decide which estate assets to sell in order to satisfy creditor claims. If your executor denies a claim the creditor may decide to appeal to the court. If that occurs, your executor must defend your estate throughout any litigation that ensues.
CHALLENGES TO THE WILL Sometimes during the probate of an estate a challenge to the decedent's Last Will and Testament is filed. Typically referred to as a "will contest" a challenge alleges that the Last Will and Testament that was admitted to probate is not valid for one of a short list of reasons. If this occurs, your executor must defend your Will during the litigation.
DAY TO DAY RESPONSIBILITIES Along with all of the legal duties and responsibilities that your executor has throughout the probate process your executor is also responsible for the day to day management of estate assets until such time as they are legally transferred to the intended beneficiaries. If you owned real property at the time of your death, for instance, your executor is responsible for the upkeep and maintenance of that property throughout the probate of your estate. Your executor is also responsible for closing out financial accounts and safeguarding any funds held in those accounts until the termination of
Executor Duties and Responsibilities in New York
www.bartonlevine.com
5
probate. If assets need to be sold to pay creditor claims or to ensure an equal division of property your executor must arrange for, and negotiate, the sale of those assets and then safeguard the proceeds until they are turned over to creditors or beneficiaries.
TAXES Before the probate process can be concluded your executor must make sure that both personal income taxes and estate taxes have been prepared, filed, and paid. If you left behind a large estate preparing your federal gift and estate tax return can be rather complicated and will likely require the assistance of a certified public accountant.
TRANSFERRING ASSETS At the end of the probate process your executor will need to file a final inventory with the court. Once the court is satisfied that everything is in order your executor must prepare all of the legal paperwork necessary to transfer ownership of the remaining assets to the intended beneficiaries. By now it should be clear that the duties and responsibilities of your executor are varied and numerous. Your executor has a tremendous
Executor Duties and Responsibilities in New York
www.bartonlevine.com
6
amount of authority during the probate process as well as a substantial number of obligations. A misstep by your executor can cost your estate both time and money. For these reasons it is important that you take an adequate amount of time contemplating your choice of executor when creating your estate plan.
New York City Bar, What Is an Executor? Forbes, Understanding the Role and Responsibilities of an Executor Nolo, What Does an Executor Do?
Executor Duties and Responsibilities in New York
www.bartonlevine.com
7
About the Author Barton P Levine For more than 30 years, Bart Levine has been the principal member of the Law Offices of Barton P. Levine. Mr. Levine specializes in estate planning, probate and estate administration, bankruptcy representation, special needs planning, medicaid planning, guardianship representation, elder law representations and real estate representation. Mr. Levine presents free educational seminars to the public throughout the greater New York City metropolitan area. These seminars are intended to educate the public about the importance of proper estate planning. Seminar topics include Basic Estate Planning, Asset Protection, Special Needs Planning, Medicaid Planning, Estate Planning for the GLBT Community, IRA Planning and many others. Mr. Levine also presents continuing education courses to the professional community. Experience Mr. Levine has been a member of the New York Bar since 1973. Mr. Levine is also admitted to practice law before the federal courts of the Southern and Eastern Districts of New York. Mr. Levine is a member of the American Academy of Estate Planning Attorneys (AAEPA) and the New YorkState Bar Association, Trusts & Estates Division. Law Offices of Barton P. Levine Main Office: 260 Madison Avenue, 17th Floor New York, NY 10016 Toll Free: (888) 268-4425 Fax: (212) 268-6267 Email: blevine@bartonlevine.com Website: www.bartonlevine.com
Executor Duties and Responsibilities in New York
www.bartonlevine.com
8