Understanding Estate Administration and Probate
Probate is a legal process in which all estates must go through, as long as the estates are contained in a will. The primary goal of probate is to transfer assets out of the deceased person’s name into the name of a surviving loved one. The process consists of a variety of financial responsibilities such as making sure the decedent’s creditors are paid through estate settlement and making sure that any remaining assets go to the designated beneficiaries. The institution or person who manages the estate through this probate is called an estate administrator or an estate executor. But, what exactly is the difference between an Estate Executor and an Estate Administrator? To understand this better, let’s look into their roles and what each does.
Estate Executor vs Estate Administrator
An estate executor is responsible for administering an estate and ensuring the decedent’s final wishes, as declared in the Will, are executed. Usually, the deceased individual’s will have appointed an executor in their Will to manage the estate’s administration and ensure their final wishes are executed. During the probate process, the court determines if the Will is valid, and if so, will officially appoint the executor. Once the executor has been officially appointed, they can begin executing their duties.
If the deceased did not leave a Will (dying intestate), does not name an executor in their Will, or a listed executor declines the appointment, the court will choose the administrator of the estate. The administrator must then make sure the estate is settled according to New York intestacy laws.
Both the Executor and the Administrator are responsible for safeguarding the decedent’s assets until all debts and taxes have been paid. Once all debts and taxes have been paid, they must then ensure that whatever is left is distributed to the decedent’s beneficiaries.
The difference between an estate executor and an estate administrator depends on whether or not the deceased left a will, named an executor, or if the named executor declined the appointment. However, both have the same responsibilities to the state and to the deceased’s beneficiaries.
The Responsibilities of an Executor or Administrator Includes:
- Appear in court, which is required, on behalf of the estate.
- File the necessary court papers to start the probate process. If unsure of how to do so, consult with an estate planning attorney.
- Obtain a copy of the most updated will and understand the deceased’s instructions.
- Manage all inventory including assets such as valuables and personal property.
- Notify banks and government agencies of your death and file your final income tax returns.
- Pay valid claims against the estate (taxes and debts)
- Allocate assets to the decedent’s beneficiaries.
Why creating an estate plan is important
If the deceased did not leave a Will (dying intestate), does not name an executor in their Will, or a listed executor declines the appointment, the court will choose the administrator of estate. The laws of the state where the deceased lived and owned property determines what happens to their assets and who can give them away. The probate court will name a representative to distribute the assets, the administrator. In most cases, the surviving spouse gets appointed. If they do not have a surviving spouse and no other close family member is willing or able to do the job, the court will name a public trustee to distribute the assets according to state law.
The court could appoint an administrator that may not be the ideal individual for the deceased which is why a trust should be created, especially if you don’t plan on creating a will. Trusting the court to appoint an administrator is a risk because a judge who does not have any personal connection to the deceased cannot take into consideration the deceased’s wishes and predict who they would have appointed. A judge will not know the deceased’s feelings or thoughts about surviving loved ones or any beliefs the deceased had that could influence their choice.
During the probate or administration process, the assets or execute directives are frozen until the court system goes through the details of the estate, applies state laws, pays off taxes and debts, and makes decisions about how to distribute the assets. The probate process includes paperwork and court appearances by lawyers, but the estate pays their fees. The whole process can be time-consuming, taking months and even years, especially in big cities like New York or affluent counties, where wills contain an exorbitant amount of assets. With the legal bills, it can be quite expensive for surviving family members.
Estate planning can significantly reduce the time and expense of dying intestate by specifically:
- Creating a will that names an executor of your estate
- Making sure all investment accounts (IRAs, 401(k)s,) have correct, living beneficiaries. The designations render bequests in a will unnecessary.
The administration process can be arduous and tedious because of numerous state statutes and regulations. If you have been appointed as an Executor or Administrator, an estate planning attorney can be retained to provide guidance. It is certainly advisable to hire an attorney for larger estates. For smaller estates hiring an estate planning attorney can also be beneficial. Attorneys should have the experience required to handle issues that may arise during the administration process, like valuing assets and managing the necessary court filings. You should also consult an experienced estate planning attorney if someone is contesting the Will, a business or commercial real estate is involved, or when the estate does not have enough money to cover debts and taxes.
For further estate planning assistance, please contact the Law Office of Inna Fershteyn at (718) 333-2394 to receive the most highly qualified legal advice.