Individuals in New York who are in the midst of estate planning may wonder what is involved in estate administration. Estate administration has three components: getting the assets together and assessing their value, dealing with taxes and debts out of those assets, and ensuring that what remains is distributed to the beneficiaries.
Individuals should leave behind a list of passwords, accounts, and important documents to make the job of estate administration easier. There should also be a valid will, but if there is not, the state will decide how the assets are distributed among surviving family members. If there are no surviving relatives, the assets pass to the state.
One advantage of a will is that it can name an estate administrator. Also known as an executor, this might be a family member, an attorney or even a bank trust department. If there is no executor, the court will appoint one.
Once the will has gone through probate, there are only a few steps left. It may be necessary to file taxes even if no taxes are owed. Assets must be distributed before the estate can be closed.
There are a number of points regarding estate administration that individuals should keep in mind while they are estate planning. Appointing the right executor is key. This should be someone who is able to make disinterested decisions if there is conflict among beneficiaries.
Individuals may also want to consider more complex estate planning. For example, there may be good reasons to establish a trust instead of or in addition to a will. A trust may allow assets to be distributed in a way that is cheaper and quicker than going through probate. Trusts may also control how beneficiaries receive their inheritance.