Are you planning for your future and what will happen to your estate once you are gone? Appointing an executor of succession who is capable of executing what is stipulated in your will will be key in this process. In this article we tell you everything you need to know about the executor of estate in New York: how to appoint one, who it can be and what functions the executor will have to carry out.
At Ortiz & Ortiz we have expert estate planning attorneys who will know how to best advise you in your case. Our team has been serving the community for over 30 years in English and Spanish. Contact us!
What is a New York executor of estate or administrator?
Planning who will inherit your estate can be a difficult decision. Getting advice from an experienced estate planning attorney to help you through the entire process will be key. Especially to advise you on the appointment of an estate executor.
The estate executor or administrator is the person who will be in charge of administering the decedent’s estate.The executor will be the person who will distribute the estate, whether property, assets, money or other property, to beneficiaries who may be relatives, friends or other organizations. It will also be in charge of paying debts, taxes or any other obligations that it may have in this regard.
All the duties of the executor will be done following the last will of the deceased person written in the will. While the estate executor is named in the decedent’s will, the executor is appointed by the court when the will is admitted to probate. In any event, please review our article on the New York letters of administration.
Main characteristics of an executor:
- It is named in the will. The deceased person will leave in writing in the testament who wants to be the executor. The will is characterized by the fact that it becomes effective once the testator dies. The difference between a will and a trust is that the latter becomes effective when it is created and can be revocable and irrevocable.
- It is not necessary to be a relative of the deceased. Although it can be a relative, a friend or a person of trust, it is not strictly necessary that the executor be a relative. The executor may even be a financial institution or some other corporation qualified to serve.
- Usually the executor is close to the deceased. Although it may or may not be a relative, it must be a person or institution trusted by the decedent. Someone to whom the decedent can entrust the administration and distribution of all of the assets after the decedent’s death.
- Has a fiduciary duty to the decedent’s estate. The fiduciary duty is to the decedent and their estate as well as to the beneficiaries and creditors. It is the obligation to act with the best intentions with respect to the will of another person, in this case the decedent. This duty may arise by law, contract, agreement, or simply a relationship of trust between two parties. Review what happens when there is a breach of fiduciary duty.
Note: If you are considering appointing an estate executor, you may be interested in our article on the difference between an executor and an administrator of the estate, as well as the difference between an executor and a trustee.
Who can be appointed as executor of the estate?
The executor of estate in New York will be a person of trust of the deceased person. That is the main requirement: that the executor of the estate be a person of trust.
Requirements to appoint an executor:
- Be at least 18 years of age.
- Be of sound mind, i.e., not adjudged incapacitated by a court of law.
- Like many other states, New York also prohibits persons with felony convictions from serving as executor.
- On some occasions, the New York probate court also rejects a potential executor who is unqualified for substance abuse, dishonesty, lack of foresight, or unfit to serve.
- The New York probate court may also rule that a person who cannot write or read English may also not serve as an executor.
Recommendations for appointing an executor of an estate in New York:
- As stated above, the estate executor appointed by the testator should be trustworthy. A person or institution that can be trusted with closed eyes, who will not misuse the assets or property.
- Although it can be any trustworthy person, it is generally recommended that it be a close relative.
- The executor should be financially responsible. This considering that the executor will have the task of administering the entire estate and distributing it according to the will of the deceased.
- Keep in mind that the executor will have to administer the estate before distributing it. The executor will have to pay taxes, debts, and costs. It is important that the executor be able to make all of these payments without misappropriating the funds.
Let’s look at some situations below:
Can a nonresident alien be named executor?
A nonresident alien is someone who is neither a U.S. citizen nor a resident of the United States. There are some circumstances in which a nonresident alien can be an executor.
Some points to keep in mind:
- A nonresident alien can be an executor only when a New York resident is named to be a co-executor with the nonresident.
- If you want to appoint a U.S. citizen who resides outside of New York, you can. However, it is recommended that a New York resident be appointed as co-executor as well.
- Having a local executor can make things easier. For one thing, it will be easier to travel to and from the testator’s home. The executor of estate in New York will most likely have to be present at the testator’s home to clean, organize, collect assets, among other things. In addition, having a local executor will allow communication with the probate attorney to be more expeditious and not rely solely on email or telephone contact.
- It is important that the person to be named as executor is aware of the duties and responsibilities acquired after the death of the testator.
Can an executor also be a beneficiary?
The answer to this question is yes. It is very common for the executor to also be a beneficiary of the will. This is because many people name as executors a close relative whom they trust.
In many cases, the testator may even name one or more beneficiaries as executor, co-executors or successor executors.
Can there be more than one executor?
Naming more than one executor of estate in New York can pose some problems. First, it may cause the executors to disagree on the administration of the estate and, therefore, could delay the entire process of distributing assets and property among the beneficiaries.
In order to approve decisions regarding the administration of the estate the executor will have to sign some documents. In the event that there is more than one, more than one signature would have to be coordinated and this could be detrimental to the estate. However, the testator can name several co-executors if the testator so desires.
What does a successor executor do?
In general, there is talk of naming an executor. However, it is a good idea to also name an alternate or successor executor in case the first executor does not want to serve.
In the absence of an alternate executor, several family members or other interested parties may petition the court to assume the executor’s responsibilities. But this is not a good idea, as it may result in delays or difficulties in decision making.
When does the executor’s duties become effective?
The executor is named by the deceased person in the will. But that doesn’t mean that the executor has authority to act immediately.
Here is the process:
- The testator names the executor in the will.
- The court in the county where the decedent resided must appoint that executor.
- In order for the executor to be appointed, the will must be admitted to probate.
- Before the will is probated the executor has no authority to act or administer anything.
Can an appointed executor refuse to serve?
The answer is yes. One who has been appointed executor does not always have to serve as executor. The executor can resign or refuse to do so. When this happens, it is up to the probate court to appoint a new one. However, most executors stipulated in the will carry out the decedent’s will as a way of honoring the decedent’s last wishes.
How is an executor appointed in the absence of a will?
So far we have discussed the process of appointing an executor of estate in New York when there is a will made by the decedent that stipulates who the executor will be. However, there are many Americans who die without a will. In such cases, New York’s intestate succession laws come into effect.
When the person dies intestate, that is, without a will, Letters of Administration are issued to the Administrator. The administrator, who will perform the same duties as the executor, will be appointed by a court.
The procedure for appointing an administrator when there is no will is to analyze the living relatives of the deceased. Then, the order of priority of each is looked at to see which one qualifies as an administrator. In general, it is most common for the court to appoint as administrator the surviving spouse, children, grandchildren, and so on with more distant relatives. In the event that the court is unable to identify living relatives of the decedent, all property and assets will be owned by the State.
Note: Also read our articles on undue influence in wills and steps to contest a will. If you wish to delve deeper into the differences between testate and intestate succession we recommend our article on that.
Responsibilities and Duties of the Estate Executor
From collecting assets, settling affairs, paying taxes, debts and other claims, administering the assets for the duration of the process and, finally, distributing among the beneficiaries. All of these actions and tasks will be performed by the estate executor in New York. Each of them will follow to the letter the will of the deceased person as expressed in the will.
In addition to following instructions, the executor has responsibilities. First, the executor must fulfill the fiduciary duty, i.e., act with good intentions and not guided by their own interests. If they fail to do so, they can be taken to court for being in breach of this responsibility. And secondly, the executor will be liable in case the estate suffers losses and damages.
What the executor of the estate must do:
- Be appointed as executor. Even though the person who is named as executor in the will already knows about it beforehand, there is nothing the executor can do or act on until they have been officially appointed by the court. As we said before, the executor must wait for the will to be probated and for the court to appoint the executor.
- Carry out the will of the deceased. Once you are legally the executor of the estate, you can begin to carry out the will of the deceased.
- Listing of real and personal property. The first thing the executor should do is to list all of the decedent’s assets. The executor should protect each of the assets by notifying the financial institutions of the death of the owner of those assets. In addition, an executor should take this opportunity to introduce themselves as the executor and let the institutions know that they will be the person who will deal with all of the decedent’s outstanding issues.
- Professional appraisals. Once you have the list, it is advisable to have professional appraisals of real and personal property such as art, jewelry or other luxury items that may fall into that category.
- Filing an inventory. Six months after the appointment of the executor, the executor must file the aforementioned inventory listing all real and personal property and their respective values.
- Tax identification number. You must apply for a tax identification number for the estate from the IRS.
- Open an estate checking account. It is recommended that the executor open an estate checking account once the executor has already collected some funds. In the interest of fulfilling the fiduciary duty and not getting things mixed up, it is best to keep the account completely separate from the executor’s personal finances. This will avoid misunderstandings.
- Paying creditors and lenders. Before the executor begins to carry out the decedent’s will regarding the distribution of assets, it must check for creditors and lenders. The executor must analyze whether those claims and debts are valid. If they are, it is their obligation to pay them.
- Pay expenses of the estate. In that sense, the estate will bear funeral expenses, court fees, fees of the attorney handling the probate process, appraisal costs, etc.
- Financial order. This is one of the most important of the executor’s duties and tasks. Keeping the finances in order, keeping a careful and detailed record of each of the transactions. To have a book where the executor records all income and expenses. This could defend you in case someone accuses you of breaching fiduciary duty.
- Taxes. Have the decedent’s final income tax return and estate income tax return. Along the same lines, state and federal estate tax returns should be filed and prepared on time.
- Distribute the estate to the beneficiaries. Once all expenses, taxes and debts have been paid, it is time to carry out the decedent’s last will. It is time to distribute the estate funds to the beneficiaries. In cases where there is no will the assets are distributed among the distributees.
Note: Read also our article about what happens to a joint account with a deceased parent or when there is life insurance without a beneficiary.
Is the executor paid?
Most of the time, yes. Many times it depends on each state and some allow compensation or, rather, commissions to the executor for services rendered to the estate.
The amount of compensation is set by law and differs from state to state. In addition, such compensation is taxable income and must be reported on a tax return.
However, intestate succession, the executor is usually a close relative or someone of trust who is also a beneficiary. In that case, the funds the executor receives as beneficiary are not considered taxable income.
If you are considering appointing an executor or have just been appointed as one, you may be interested in our article on whether the executor must show the accounting to the beneficiaries.
Expert New York Lawyers To Help With Executor Duties
Choosing the right executor of estate in New York is not an easy decision. The executor must be a very trustworthy person that you trust implicitly. In addition to trust, the executor must have some financial knowledge, as their main job will be to manage the estate well before it is distributed to the beneficiaries.
Our probate lawyers can advise you and accompany you throughout the process of drafting the will as well as in the appointment of an executor. At Ortiz & Ortiz we can provide you with:
- First class advice on estate planning matters.
- Preparation and drafting of wills and other documents to help you plan what will happen to your assets and property when you are gone.
- Recommendations on the appointment of an estate executor, co-executors and alternate executor.
Contact us today to help you with your case! Remember that our offices are located in Queens and Manhattan. However, we also offer virtual consultations in any of the five boroughs of New York State.