Kamilla Mishiyeva, Esq., Probate Lawyer

The vast majority of people in the United States are completely unaware of the legal process taking place after a loved one passes away. When a loved one creates a last will and testament, what they are actually doing is putting in writing what their last wishes are for their property and how their minor children or dependents should be taken care of. For the will to be validated and enforced, it needs to go through the legal process that is called Probate. Consider Probate as this large umbrella, and underneath it, you have the following situations taking place: will contests, accounting of inventory, property appraisal, debts and taxes, distribution of assets,  as well as other legal nuances. This article will discuss all of the various points you should be aware of. We will also explore cases where the legal process of probate caused controversial decisions by the courts. For more information on the probate process, creating a last will and testament, or any estate questions, you can contact our law firm. Email us at Kamilla@MishiyevaLaw.com or call us at (646) 233-0826. You can also visit our homepage for more information: www.NYCProbateLawyer.com.

Why Probate Matters

Before the will can be enforced, it first needs to be validated. When someone wants to challenge the validity of a will, this is what is called a “Will Contest”. There are several factors available at your disposal to try and deny the enforcement of a will. Here is a list of categories that are typically used to contest a will:

Age: Although some states do allow a younger individual to be the testator (the person creating the will), many states require the testator to be at a minimum 18 years old.

Mental State: It is imperative the testator is of sound mind. They must be aware of their actions and decisions when creating a will. They need to be aware what the ramifications of a will are and that they are creating it. They should also be aware of the assets they own and to whom they want these assets to be distributed to.

Undue Influence: This is when the testator is influenced or rather manipulated by a trusted advisor, friend, or adult child to create the way and have it’s clauses written in such a way that this manipulator will be the beneficiary of the assets or

Fraud: A fraudulent will is one which was manufactured by someone besides the testator. It is posing as the originating will when it was not in fact approved by the individual.

Not following Will Formalities: When the testator is ready to finalize the creation of the will, witnesses have to be present and the testator must announce it is in fact their will which is about to be signed. The testator must say aloud that they wish for the witnesses to witness the signing of the will. If this is not done, the will can be struck down.

Why is all of this important? Your life’s work is culminated into two things, your deeds and your assets. When it comes to estate law, a probate lawyer deals with the legality of your decision on what should be done with the assets.

Probate Fact #1: Having No Will Will Not Leave Your Wife/Husband & Children Penniless – If a will is not created, a similar court process occurs to close out the estate of the decedent call “estate administration”. When a will is struck down, the beneficiaries are determined by a specified order of heirs. Typically the spouse would receive the assets and if there is no spouse, then the children would be next in line. This is essentially how estate administration would work as well. 

What’s An Executor

Assuming the will is valid and was able to win a will contest, now the actual work begins of closing out the estate. The question is who is typically in charge of working with the estate? This individual is called the executor. They are selected in the will but can refuse the position if they choose to do so. Their job is vast and can last several years but they do get compensated for their time and work. Here is a break down of how they typically get paid. The follow is typically what is on the executors list of things to do:

• Locating all of the assets of the deceased individual and managing them until it is time for the sale of these assets to occur. This would include real estate property that is generating rental income or a website that was generating income.
• Locate and contact the beneficiaries of the will. As the executor, you have a fiduciary duty to ensure the last remaining wishes of the decedent are enforced.
• Filing the will in probate court. Probate court is not the official name of the location where probate and estate proceedings take place. The actual name is Surrogate’s Court.
• Setting up an estate bank account for the decedent. This account will be utilized to deposit stock dividends, wages, and monetary consideration that is due to the decedent.
• Notifying the decedents death to the many financial and governmental establishments we all deal with everyday. This would include credit card companies, banking institutions, Social Security and Medicaid offices, etc.
• Paying ongoing bills. Using the estate’s funds, you would need to pay accruing expenses such as a mortgage, utility bills, and the college tuition of the decedent’s children.
• Paying off creditors. The creditors have seven months to make a claim on the estate. The executor has the duty to use the estate funds to reimburse the creditors for the debt that the decedent had accrued.
• Paying taxes. Typically, only large estate pay estate tax. Tax returns still need to be filed such as From 1040 and 1041. Here is more information on estate tax.
• Ensure assets are distributed to the rightful heirs. The whole purpose of a last will and testament is to ensure the beneficiaries receive what is due to them. As the executor, you will supervise the property being distributed to the people named in the will.

Assets That Pass Outside of Probate

Not all assets are created equal when it comes to probate. There are a number of assets where the involvement of Surrogate’s Court is unnecessary. The assets that require probate typically only have your name at the title holder. You can safely assume the following assets end up going through probate when it is only your title on the name: a vehicle, a home, bank accounts, securities and other financial investments, and tangible personal property. The following categories of assets can be passed to heir outside of the probate process:

Jointly Owned Assets: Another name for these types of assets fall under the title of “joint ownership (or joint tenants) with right of survivorship”. When you pass away and there are jointly owned assets, the property is immediately transferred over to the surviving co-owner.

Question: What if I have a will even though I am the owner of Jointly Owned Assets and my will states this particular property should go to my heirs and not to the other owner?

Answer: Any assets held in this format will go directly to the co-owner. Unfortunately, your heirs will be disinherited from the property. What you may want is owning property as Tenants in Common. 

With Tenants in Common, suppose you own a 50% share in a property and your friend, Tom, owns the other 50%. If you pass away, Tom does not receive your half. Rather, your heirs, as stipulated in your last will and testament, will receive your portion of the asset.

Assets With Beneficiary Designations: You receive the option with some assets to name a beneficiary in the event of your untimely death. Some of the more common assets in this category are Insurance Policies, Individual Retirement Accounts, and certain types of bank accounts. Since a beneficiary is designated, the transfer of property is not dependent on probate.

This sounds simple enough but under certain circumstances, the probate court will need to intervene to ensure assets with beneficiary designations go to the right people. Here is a list of scenarios when the complexity of asset transfer arises:

• If your beneficiary dies before you, the assets will need to go through the probate process unless you name a new beneficiary.
• In the event your beneficiary becomes incapacitated, your financial institution may have serious doubts about transferring a sum of money to someone who is unable to take care of themselves. They would have Surrogate’s Court appoint a guardianship in order for the money to be properly handled on behalf of the beneficiary.
• If an you list your beneficiary as “my estate”, you will definitely not avoid probate. The court will have to decide who is exactly an heir to your estate. Be specific and name an actual individual
• If you list a minor as a beneficiary, a court will once again appoint a guardianship to manage the funds for the minor until they reach the age of 18.

Assets In Trusts: Although this may be a bit more expensive than your generic will, a revocable and irrevocable trust work as a financial vehicle that is not subject to probate administration. Any assets identified in the trust are immediately transferred to your designated beneficiary.

Probate Fact #2: Get Your Assets In Order – As you are beginning to see, depending on the type of asset you own, the legal process of transferring the specified asset varies. Make a list of everything you own from IRA accounts to tangible personal property and bring this list to an Estate Lawyer. Have them walk you through what exactly needs to be done in order for your assets to transfer without any hiccups in the event of your death.