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QUICK START GUIDE FOR NEW YORK ESTATE EXECUTORS AND ADMINISTRATORS

The Job of Executor or Administrator Comes with a Great Deal of Responsibility

The Executor or Administrator is the person tasked with managing a decedent's estate.  The Executor need not be a relative of the deceased.  The designated person may be a relative, friend or trusted advisor.  In fact, the Executor may not be a person at all -  financial institutions and some corporations are qualified to serve.  On the other hand, Administrators are usually the closest next-of-kin as determined by state law.


The Executor or Administrator has a fiduciary duty to the estate as well as its beneficiaries and creditors. Which means that he or she is held to a very high degree of care. A fiduciary must be extremely faithful towards the estate, its beneficiaries and creditors and must not put his or her own interests ahead of that duty.

How Does One Become an Administrator or Executor?

In New York, the Executor / Administrator is appointed by the Surrogate’s Court located in the county where the decedent resided. Once the Will is admitted to probate, the Executor is appointed and may proceed to administer the estate. Note that before the Will is probated, the person named as Executor has no authority to act.


If there is no Will, an Intestate Administration proceeding is filed. The court will then appoint an Administrator and he or she will have all of the powers of an Executor.

What are the Differences Between an Estate Executor and Administrator?

The Executor must ensure that the decedent's objectives and goals, as stated in the Will, are faithfully carried out. The job of the Administrator differs in that he or she must make certain that the estate is settled according to New York's laws of intestacy. However, both the Executor and Administrator must protect the decedent's property until all debts and taxes are paid. Then make certain that the balance is transferred to those people entitled to it.

You Have Been Appointed Executor or Administrator, Now What?

If you are represented by an attorney, look to your attorney for guidance on how to proceed.  If you are acting on your own, you should do as must research on the topic as possible.  There are many books available on the subject (e.g., The Executor’s Guide published by Nolo).  If you prefer not to purchase a guide, try doing some research at your local public library.


A basic checklist of estate settlement tasks is provided below.

 

Is an Executor or Administrator Entitled to be Paid?

Generally, yes.  Most states make allowances for compensation (commissions) to the Executor or Administrator for services rendered to the estate. The amount of compensation is normally set by law and differs from state to state.


Compensation received by Executor or Administrator is taxable income and must be reported on a personal income tax return. However, funds received as a beneficiary are not considered taxable income. Before accepting compensation, the tax implications should be discussed with a qualified tax advisor or attorney. Also, the terms of the Will may dictate whether or not the Executor is entitled to compensation.


For more information about Executor’s fees and to use our fee calculator - click here.

Estate Taxes - An Important Note

If the estate is subject to federal and/or state estate taxes, a return must be filed and the taxes paid within 9 months of the date of death.


If it is filed late or incorrectly, there may be penalties assessed. The unwary Executor or Administrator may be personally liable for such penalties.


Note that the Estate Tax Return and Income Tax Return are separate and distinct taxes and many estates are subject to both. Click here for more information on Estate Taxes.

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Author: Rudolf J. Karvay

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