NYC Small Estate Administration – When There Are Less Than $50,000 In Assets

Bill died in NYC with a Last Will and Testament in which he left all of his assets to his daughter, Susan. At this time of his death, Bill had $35,000 in his checking account, a Car, and the contents of his apartment. Bill could not place a beneficiary designation on his checking account. The bank would not allow Susan to withdraw the funds from Bill’s individually held checking account.  The building would not allow Susan into the unit to clean out the apartment without Court authority. What can Susan do? Commence a Small Estate Administration proceeding.

How Can You Withdraw Funds from The Bank Using A Small Estate Administration Proceeding?

In order to collect the assets from the individually-owned bank account, or to access the apartment Susan needs permission from the Court.  Susan should commence a voluntary administration proceeding, otherwise known as a small estate administration proceeding. Here is a link to the Court’s DIY Small Estate Administration forms.  If you do not want to do it yourself, then we can help you.

SCPA §1301 and §1303 provide that where an individual dies with probate assets (assets that are owned in the name of that individual alone) consisting only of personal property totaling $50,000.00 or less, a voluntary administration proceeding must be commenced in order for those assets to be collected and distributed.  This is true regardless of whether the individual died with or without a will.  According to §1303, since Susan was named as Executor under Bill’s will, she may file for voluntary administration requesting that she be appointed voluntary administrator by the court.  For those who die with a Last Will and Testament, the law provides a hierarchy of individuals who may commence a voluntary administration proceeding.  For those who die without a will, the law also provides a list of individuals who may be appointed as voluntary administrator.

A voluntary administration proceeding is much like a full administration or probate proceeding, in that it grants permission to a fiduciary to collect and distribute the probate assets of a deceased individual, but the process is generally a much cheaper and faster process.

How do You Commence a Small Estate Administration Proceeding?

In order to commence a voluntary administration proceeding, Susan should file:

1. An Affidavit in Relation to Settlement of Estate Under Article 13 (In the Affidavit, Susan will provide her contact information, Bill’s date and place of death, the names of Bill’s next of kin, and a list of personal property that Bill owned at the time of his death.  Click here to access the Small Estate Forms);

2. The Certified Death Certificate of the decedent;

3. (Optional) The decedent’s original Last Will and Testament (if the Decedent had a Will); and,

4. Pay the $1 filing fee.

What Happens After the Voluntary Administration Proceeding is Commenced?

After Susan files the small estate administration documents, the Court will issue a certificate for Bill’s individually-owned bank account.  (After a voluntary administration proceeding is commenced, the Surrogate’s Court usually issues a certificate for each probate asset of the estate.) Susan can then present the certificate to the bank, and the bank is then obligated to honor the certificate and pay the funds to Susan. Susan will also receive a general Certificate to collect up to $50,000 and place the money in an estate account. She will also receive a Certificate to allow her to collect the contents of the apartment.

Within nine months of the receipt of the Voluntary Administration Certificates, Susan must file a Report and Account in Settlement of Estate. This is where she documents what she collected and how she spent the money. It is very important to file the Report and Account in Settlement of Estate. Without this Report, the Court will not allow you to file any further proceedings.

For example, if Susan finds an additional life insurance policy or additional asset, such that the total value of all assets now exceeds $50,000, she will need to secure full Letters of Administration. However, without filing the Report and Account in Settlement of Estate, she will not be able to petition for full Letters of Administration.

Is a Small Estate Administration Proceeding Avoidable?

Bill could have kept less than $5,000 in his check account. He could also have retained a trusts and estates attorney to prepare a revocable trust.  Trusts are often used as a method to avoid the probate.  After preparing and executing a revocable trust, the creator of the trust must remember to transfer all of his assets into the trust in order to ensure that no probate or administration proceeding is required.  If even the smallest amount of probate assets remains in the name of the decedent alone, some sort of court intervention will be necessary in order for the fiduciary of the decedent’s estate to be able to collect and distribute those assets.

When attorneys draft revocable trusts, they also draft pour over wills, which are used to catch any property that was not transferred into the trust and pour that property over into the trust.  If any of the creator’s probate property is not transferred into the trust before his death, his fiduciary will need to commence a probate proceeding in order to be able to collect and distribute that property.  However, if the creator did transfer all of his assets into his revocable trust, no probate proceeding will need to be commenced, even though a pour over will had been executed.

Additional resources provided by the author

For more information, please contact NYC Probate Litigation, Guardianship, NYC Probate and Estate Planning attorney Regina Kiperman:

Phone: 917-261-4514
Fax: 929-556-2089
Email: rkiperman@rklawny.com

Or visit her at:
40 Wall Street
Suite 2508
New York, NY 10005
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