When someone dies without a Last Will and Testament, that person is considered to have died “intestate.” An individual dying intestate, requires the commencement of an administration proceeding. On the other hand, if at the time of death, a person leaves a valid will disposing of his or her property, a probate proceeding must be initiated.
Just as a probate matter, an estate administration must also be in filed in Surrogate’s Court. The procedure is quite similar to probate in which an administrator must be appointed (in a probate matter, this individual is called an executor), creditor claims are satisfied, and assets are distributed to the new owners of the decedent’s property based on NYS law.
It is often the case that the estate consists of property that requires maintenance, homeowner insurance, collection of rental payments, preservation of assets, or the overseeing of business transactions. The estate property cannot be properly managed or sold until an administrator is appointed by the court. Filing an administration petition and complying with all statutory notice requirements is a tedious process. Once appointed, the administrator must collect and inventory assets, obtain insurance, open an estate account, file the decedent’s taxes, file estate taxes, sell any valuable assets, provide an accounting to all interested parties, pay creditors, distribute funds to the heirs and settle the estate.
It could be the case that the death of the decedent is a result of a malpractice claim or a personal injury action. In such a situation, the appointed administrator is responsible for commencing a lawsuit on behalf of the estate. The fiduciary will foremost have to retain an attorney specializing in those type of matters to litigate the claim.
It is important to note that the administrator does not have to be a NYS resident. When filing a petition to become the administrator, the court does not consider the residence of the individual in making their decision to approve or deny the application. However, the person that is ultimately appointed must be a United States citizen or a permanent alien, and cannot have any felony convictions.
An administrator must also take special care when paying or disputing creditor claims. Creditors of the estate must file their claims within the statute of limitations. Failure to act within the statutory time period subjects the creditor to a waiver of their rights. When encountering claims against the estate, there are a number of issues that can come up. The Medicaid office will try to collect the money they spent over the years for the individual’s medical care if the decedent was a Medicaid recipient during his or her life. A lawsuit may have been pending or a judgment was entered during the decedent’s life. There might be unpaid bills, such a co-op and condo maintenance fees, burial expenses, and outstanding mortgages that need to be paid. At the conclusion of the estate administration, the fiduciary is also responsible for paying attorney fees, court filing fees, and the compensation owed to the administrator for their services out of estate funds.