Myths and Facts about Probate Administration
Probate proceedings in New York can be a mystery. Most individuals have the perception of probate as being this highly difficult process that will cost the estate an arm and a leg when all is settled.
In reality, probate is a fairly straight-forward process which takes less than one year to resolve, if no contests are involved. The concept of probate is surrounded by several myths that people subscribe to without knowing full well what the actuality of this legal process is. Below are four common myths regarding this area of law:
Myth: Probate fees can cost as much as twenty percent (20%) of the estate.
Fact: In general, if a court finds that the fees of an attorney are unreasonable, they may impose a change in what the true compensation for the attorney should be. From my experience, the probate of an estate can cost a client around 5% or can be accomplished on an hourly basis. Be mindful that hours on a probate case add up very quickly due to all of the court time involved along with the possibility of a will contest.
Myth: It will take several years for the assets of the estate to be distributed to the beneficiaries during the probate process.
Fact: If the decedent has no creditors and the will is not contested, assets can be distributed to the beneficiaries within a matter of several months. At a minimum, the estate cannot be settled in less than seven months to ensure that any creditors of the deceased have the ample opportunity to make a claim on the estate.
When a will contest ensues, the distribution process can take much longer than expected due to 1404 examinations and general estate litigation. You may be wondering how to avoid the probate process entirely. Fortunately, there is another option to avoid the somewhat tedious process of probate and that is creating a trust. Learn more here on why it is important to create a trust.
Probate proceeding can linger for many years in the case of disputes among heirs or beneficiaries. Some of the most common disputes among interested parties include accounting maters. An executor of the estate is obligated by law to file an accounting of the estate with the Surrogate’s Court before its settlement. The accounting details the assets, expenses, and any distributions of the estate. Heirs often initiate actions compelling the executor to file an accounting in the event of undue delay or contesting the distributions by the executor on behalf of the estate.
Myth: Probate will force the executor to liquidate all assets in the estate.
Fact: When there are ongoing expenses that need to be satisfied (such as maintenance for a home or to creditors making a claim against the estate), bills can be paid from the bank accounts or liquidation of stocks of the deceased upon establishing an estate bank account. If the estate does not have any liquid assets, the executor will have to liquidate some or all of the assets in order to fulfill the financial obligations of the estate. However, if the estate is not liable for any debts and there are no significant expenses, the fiduciary is not obligated to liquidate any assets unless directed to do so by the will.
Myth: Probate proceedings are highly complex.
Fact: In most cases, probate is a formality that most estates go through with little to no hiccups. If you have a basic will with a common familial scenario, you should not anticipate any issues to surface. Keep in mind, the larger the estate and the more sophisticated the estate plan, the higher possibility of a will contest if some heirs are disinherited or believe they’re due a larger share.
If you are an executor or an administrator and have been selected to be the personal representative of an estate in NYC, it is advisable you contact a probate law firm in New York to advise you on all of the various steps and nuances of probate proceedings. Our office is located on 85th Broad Street New York, NY 10004. You can contact us at (646) 233-0826.