In New York, the probate court has the responsibility of distributing a deceased person’s assets after their death. Probate proceedings occur in a particular court, called the surrogate’s court, located in the county where the decedent was living when they died. When a person dies with a will in place, the probate court will distribute their assets according to the will. According to New York intestacy laws, when a person dies without a will, the probate court will distribute their assets to the heirs at law. Not all U.S. states are subject to the probate process, however.
Estates Valued Over $30,000 Must be Probated When There is a Will
When you pass away, all of your assets, property, and possessions are called your estate. Typically, the surrogate’s court will oversee the process of distributing your state after you die. The estate’s value is an essential factor in determining how the assets will be distributed. When the decedent’s estate is valued at $30,000 or more, and there is a will in place, the estate must be probated under the guidance of the surrogate’s court. When the decedent dies without a will in place, the surrogate’s court will administer, not probate, the estate. The administration process is often more straightforward because the decedent did not own as many assets.
Determining the Value of the Estate
It is essential to determine the accurate value of the estate. The surrogate’s court will evaluate the decedent’s assets to decide whether to include them in the estate’s total value. Doing so involves taking an inventory of all assets and property and determining their fair market values. Not all assets owned by the decedent are considered part of their estate. For example, the proceeds of a life insurance policy and retirement accounts such as IRA and 401(k)s are not included in the estate and are not subject to the probate process.
Assets Commonly Included in the Decedent’s Estate
Certain types of assets are commonly included in a person’s estate. If the decedent was the sole owner of the property, such as a home, vehicle, or land, its fair market value will be included in the estate’s value. Anytime the decedent was the sole owner of land or property, the property will most certainly be included in the estate.
Additionally, when the decedent owns property with another person as tenants-in-common, it will likely be included in the probate process. For example, suppose the decedent owned an apartment complex with a business partner as tenants-in-common. In that case, the decedent’s share in the property would need to go through the probate process to determine who will own the share in the future.
A high-value property but that doesn’t come with a title may also need to go through the probate process. These types of personal property include appliances, furniture, household items, and personal items. Sometimes the combined fair market value of all of these individual items is not enough to meet the $30,000 threshold for going through the probate process. However, all of these smaller value items need to be included in the list of items subject to probate.
In some cases, property that they deserve intended to pass directly to a beneficiary needs to be included in the probate process. Typically, when the decedent designated someone as a beneficiary with a right to survivorship, the property transfer happens outside the probate process.
In other words, if someone does not need his brother as the beneficiary with a right to survivorship on his bank account, the bank account would automatically transfer into the brother’s name upon his death. What happens when the individual named as the beneficiary has passed away? In that case, the bank account must be included in the probate process as part of the decedent’s estate since the person listed as a beneficiary is no longer alive.
Assets Not Included in the Decedent’s Estate
Many assets are not included in the New York probate process because they are directly transferred to a beneficiary upon the decedent’s death. These types of assets are not counted toward the total value of the estate. Suppose a person owned $25,000 in cash and personal property when they died. They also owned a $100,000 retirement account, with their wife as the named beneficiary.
In this case, the decedent’s estate would still not meet the $30,000 requirement to go through the probate process. The $100,000 in a retirement account would not be included in the decedent’s estate because a named beneficiary automatically received legal ownership of the $100,000 upon the decedent’s death. Assets that are not commonly included in the total estate value include the following:
- Life insurance proceeds
- Retirement accounts with a named beneficiary
- U.S. savings bonds that are co-owned with another person
- U.S. savings bonds with a payable on death designation
- Pension plans
- Securities that are POD
- Assets transferred into a living trust
- Commissions or wages that are due to be paid upon death
Additionally, when the decedent owned property with someone else jointly with the right of survivorship, the property’s value is not included in the estate. Property held in Tennessee with a right of survivorship automatically transfers to the other person named on the title. Property owned in this way transfers automatically outside the probate process.
Contact a New York Probate Lawyer
Whether you need to create an estate plan, or you are involved in a friend or loved one’s probate lawyer, hiring an experienced probate lawyer can be helpful. Contact the Law Offices of Barton P. Levine today to schedule your initial consultation.