When A Loved One Dies
In 1789, Benjamin Franklin famously wrote “in this world nothing can be said to be certain, except death and taxes.” In this LawLetter, we will deal with the inevitable loss of a loved one, highlighting the legal and practical matters that follow such an event. We will defer the subject of taxes to a future article.
Some of the many steps, procedures, and issues most commonly faced in the course of this process are outlined below. Feel free to contact us to obtain additional information regarding any specific topic.
Promptly after the loss of a loved one, the following steps, at a minimum, should be taken:
- Notify the Social Security Administration to stop monthly payments;
- Notify credit card companies in order to prevent potential fraudulent activity and/or to terminate monthly fees that may apply to the account, etc.;
- Collect or redirect the decedent’s mail to determine what bills and debts exist, and to learn about individuals or companies that need to be made aware of the situation;
- Safeguard the decedent’s home and its contents/personal property if he or she lived alone;
- Notify the decedent’s life insurance company(ies), retirement, and pension account administrators, especially if you believe you may be a beneficiary of any such policies; and,
- Notify any other services of which you are aware such as home aides, grocery, or newspaper deliveries, transportation companies, etc.
In addition to the above matters (of which only a few are listed), the Executor nominated by the decedent in his/her will, or the decedent’s Administrator (if the decedent did not have a will), must be authorized by the Surrogate’s Court to handle the decedent’s affairs. Generating the various petitions, waivers, affidavits, and other documents for the Court can be overwhelming and time-consuming for a lay person. Furthermore, a prompt appointment, even if only in a temporary capacity, may be crucial to your ability to preserve estate assets, handle pressing business matters on behalf of the decedent, and deal with potential tax and other liabilities.
Once an executor or administrator has been appointed, that person is responsible to attend to the following items, among many others:
- Obtaining a federal tax identification number for the estate;
- Opening an estate bank account;
- Properly and timely re-titling the assets of the decedent into the name of the estate;
- Paying creditors’ claims in a timely manner;
- Ensuring both state and federal estate tax obligations, if any, are analyzed and dealt with, such as making various elections to preserve estate assets, and in filing, sometimes with the help of an experienced accountant, any estate tax returns that may be required;
- Filing an Inventory and Schedule of Assets with the Surrogate’s Court;
- Filing a final personal income tax return for the decedent;
- Selling, transferring, or otherwise protecting real property (such as a home, condominium apartment, commercial property, and other real estate) owned by the decedent in New York State. If the decedent owned property outside of New York State, a separate legal proceeding may need to be initiated;
• Preparing an accounting to show the beneficiaries of the estate (those entitled to property or assets of the decedent’s pursuant to a will or intestacy laws) what assets have come in and out of the estate, and how you propose to distribute the assets; and,
- Ultimately, distributing all of the decedent’s assets and closing the estate.
It is also important to know which assets will not become part of the court-administration proceedings. Some examples of assets that ordinarily pass to a specified individual “by operation of law”, that is, outside of the Surrogates Court proceedings, are:
- Accounts with named beneficiaries (i.e. bank account in name of decedent “in trust for [ITF] Mary Smith)”;
- Joint accounts with rights of survivorship (the surviving joint account holder will usually become the sole owner of the account without the need to be considered in the probate or administration proceeding, though there are some exceptions.);
- Life insurance proceeds;
- Retirement assets (401K, IRA’s, etc.) with named beneficiaries; and
- Property held in a Trust formed by the decedent, with a designated beneficiary.
We assist clients in determining which assets are eligible to pass in the above manner and in distributing them wisely and in accordance with law. Notwithstanding the potential for such assets to pass outside of the estate, such assets may still be considered in determining the decedent’s taxable estate.
Many other issues can arise during the procedures outlined above, all of which we are readily able to assist you with, such as:
- Filing for appointment under circumstances when the original will cannot be located;
- Dealing with the discovery of additional assets after an estate has been closed;
- Petitioning the court when the decedent’s property is believed to have been withheld from the estate by an individual or entity; and,
- Defending (or prosecuting) a will contest (a challenge to the validity of a will).
There are numerous scenarios and circumstances that arise in this field. The help of an experienced and caring estate administration lawyer can facilitate the process of appointing the representative of a decedent’s estate, efficiently distributing its proceeds, and handling the myriad of issues that invariably arise. Regardless of whether the deceased died “testate” (with will) or “intestate” (without a will), our experienced attorneys and caring staff members are at your disposal in this traumatic and painful time. Please feel free to contact us following the loss of a loved one. We are here to serve you.