Upon a person’s death, it is important to understand whether an estate proceeding is even necessary in the first place to access the decedent’s assets, and if so, which type of proceeding is required. The type of estate proceeding that may be needed depends on a variety of factors. Here are some important questions to consider: How are the assets titled? What type of assets are they? What is the value of the assets? Are there beneficiary designations? Did the decedent have a Last Will and Testament or not?
When is an estate proceeding necessary?
An estate proceeding in Surrogate’s Court is necessary when a person dies with assets that are titled in his or her individual name and do not contain beneficiary designations. This means that if a decedent’s assets are titled in the name of a Trust, are jointly owned with rights of survivorship, or contain beneficiary designations, then title to those assets can be transferred without any court involvement. Therefore, oftentimes, an estate proceeding is not necessary.
What is a small estate proceeding?
A small estate proceeding is a court process that is utilized when a fiduciary is needed to transfer personal property (e.g., bank accounts, stocks, insurance proceeds, automobiles, etc.), from a decedent’s estate which totals less than $50,000.00. A small estate proceeding is also known as a voluntary administration proceeding. In such a proceeding, the fiduciary appointed is called a Voluntary Administrator. The Voluntary Administrator, once appointed, collects the specific assets and distributes them to the beneficiaries under the decedent’s Last Will and Testament or to the decedent’s heirs at law if the decedent died without a Last Will and Testament. A small estate proceeding, or voluntary administration, is essentially a faster and simplified version of a probate or administration proceeding.
For example, John Doe died owning a checking account worth $40,000.00 which was titled in his name alone and did not have a designated beneficiary. John had a Last Will and Testament naming his daughter, Sally, as the sole beneficiary and the nominated Executor. In order for Sally to have access to the funds in the checking account, she would need to bring a small estate proceeding in Surrogate’s Court to be appointed as Voluntary Administrator of his estate.
When is a small estate proceeding not permitted?
A small estate proceeding cannot be utilized if the decedent died owning any interest in real property (e.g., home or vacant land) or if the total value of the decedent’s personal property is worth $50,000.00 or more; in those circumstances, a probate proceeding, or an administration proceeding is necessary. A probate proceeding is necessary if the decedent had a Last Will and Testament. An administration proceeding is necessary if the decedent died without having a Last Will and Testament in place.