Estate and Trust Administration

ANSWERS TO FREQUENTLY ASKED QUESTIONS BY EXECUTOR’S OF ESTATES

1. Q. Since I was named Executor under the Will, isn’t it true that I may begin to administer the estate immediately upon the death of the testator or testatrix?
A. No. A petition must first be filed with the appropriate Surrogate’s Court to determine that the Will is valid and that you are fit for appointment as a fiduciary.

2. Q. Must beneficiaries pay an income tax on their inheritance?
A. No. However, they will be responsible to pay their share of any post mortem income earned on their inheritance, as well as on any income accrued to, but not realized by the deceased during his or her lifetime, such as income on savings bonds and IRAs.

3. Q. Must the beneficiaries pay an estate tax on the property they receive under the Will?
A. If the estate is large enough to require the filing of a Federal Estate Tax Return, currently 1.5 Million Dollars, a Federal Estate Tax may be due. If the estate is large enough to require the filing of a NYS Estate Tax Return, currently 1 Million Dollars, a NYS Estate Tax Return may be due.

4. Q. Are Will contests common?
A. No, and they seldom succeed except when extenuating circumstances such as fraud, duress, undue influence, lack of testamentary capacity or invalid execution of the Will exist.

5. Q. Who may challenge the Will?
A. Certain family members who survive the decedent known as distributees. Distributees are defined under NYS Estate Powers and Trust Law. Also, certain persons adversely affected by the purported Will or a Codicil thereto may challenge the Will or Codicil.

6. Q. How long does the estate administration process last?
A. The estate must remain open for at least seven months from your appointment as Executor or Executrix. This period is known as the creditor’s period under New York law. However, for larger estates requiring the filing of state or federal estate tax returns, or for estates involving complicated issues or litigation, the period can be considerably longer.

7. Q. What are some common factors that could increase the time and cost involved in administering the estate
A. A few such factors include litigation, estate tax filing requirements, creditor’s claims, minor beneficiaries, incapacitated beneficiaries, charitable beneficiaries, accounting proceedings, problems proving the validity of the Will to the Court’s satisfaction, and assets which are difficult to value and/or distribute equitably. The aforementioned list is merely intended to be illustrative and is by no means an exhaustive list.

8. Q. Am I entitled to be compensated for my services as Executor?
A. Yes, you are entitled to commissions by statute under the New York Surrogate’s Court Procedure Act. You are not required to take commissions, but if you do, any commissions received by you will be subject to income in the year received.

9. Q. Must the estate pay any fees to the Surrogate’s Court?
A. Yes, each proceeding commenced in the Surrogate’s Court, including the probate proceeding, will require the payment of a fee to the Surrogate’s Court. The size of the fee will vary with the size of the estate, and can run anywhere from $45.00 to $1,250.00 depending on the size of the estate. The same fee is applicable to administration proceedings and accounting proceedings. Additional court fees may be applicable as required by statute.

10. Q. What will be the cost of the legal services required to administer the estate?
A. The cost for the legal services required to administer estates can vary widely depending on the facts and circumstances of the estate. Under New York law, there are certain factors which should be considered in determining a reasonable legal fee. Those factors include, but are not necessarily limited to, the nature of the work involved, the complexity of the work involved, the amount involved, the reputation of the attorney, the time dedicated to the file, and the results obtained. Pierro & Associates will set forth the fee it believes is appropriate for your file in a formal letter of engagement which we will ask you to sign before commencing work on the estate. The legal fees paid are in addition to any fees paid to the Court, experts, or other third party vendors.

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