Administration Proceedings FAQ
Distributees may inherit under an Administration Proceeding. Who gets what is determined by who the living relatives are and their relationship to the decedent. If there is a surviving spouse and children, then the spouse inherits the first $50,000 plus one half of the balance (excluding exempt property) with any children of the decedent sharing equally in what remains. If there are only children who survive, then they share equally. If there is no spouse or children but parents who survived the decedent, then the parents inherit. If only siblings are remaining, then they inherit. If no one is available to claim the decedent's property, then the Public Administrator of the county of the decedent claims the estate for a certain period of time before it escheats to the state.
An Administration CTA Proceeding is used when the decedent passes away with a valid Will but when the nominated fiduciaries are no longer available to serve. In this situation, the Court appoints an Administrator CTA who administers the estate according to the decedent’s wishes.
An Administration DBN Proceeding is commenced after an Administrator has been appointed to wind up an estate but who could not complete the administration of the decedent's estate due to death, resignation, or removal.
When a person dies without a valid Will, the Surrogate's Court appoints an Administrator and issues Letters of Administration, the document that proves the Administrator's authority to collect the assets, pay the debts and taxes, and distribute what remains. Under SCPA 1001, letters must be granted to the decedent's distributees who are eligible and qualify, in this order: the surviving spouse; the children; the grandchildren; either parent; the brothers or sisters; and then any other distributee, with preference given to the person entitled to the largest share in the estate. Where two or more distributees have equal priority, the Court may grant letters to one or more of them. If every eligible distributee files an acknowledged consent, letters may instead be issued to a person who is not a distributee. If nobody entitled to serve will do so, letters are granted to the Public Administrator of the county, or to the petitioner, or to another person, in the Court's discretion.
A distributee is defined by SCPA 103(14) as any person entitled to take or share in the property of a decedent under the statutes governing descent and distribution. Who that turns out to be is decided by EPTL 4-1.1. Where there is a spouse and issue, the spouse takes fifty thousand dollars and one half of the residue and the balance passes to the issue by representation. Where there is a spouse and no issue, the whole estate passes to the spouse. Where there is issue and no spouse, the whole estate passes to the issue by representation. Where there is neither, the estate passes to the surviving parent or parents, then to the issue of the parents by representation, then to grandparents or their issue reaching no further than the grandchildren of a grandparent, and then to the great-grandchildren of grandparents per capita. Relatives of the half blood take as if they were of the whole blood, and a child conceived before the decedent's death but born alive afterwards takes as if born in the decedent's lifetime.
The estate does not stop, but the Court will not simply take the petitioner's word for it. Under 22 NYCRR 207.16(d) the petitioner files an affidavit of due diligence setting out the search actually made, including examination of the decedent's personal effects and address books, inquiry of relatives, neighbors, friends, former business associates and employers, the post office and financial institutions, correspondence to the last known address, searches for people of the same or similar name in the area where that person lived, and searches of Motor Vehicle and Board of Elections records. A person who is unknown, or whose whereabouts are unknown, is a person under disability for the purposes of the SCPA, and the Court may appoint a guardian ad litem under SCPA 403 to protect that person's interest. Where a person who would be a distributee has not been heard from for at least three years since the decedent's death and a diligent search has produced no evidence that the person is living, SCPA 2225 allows the Court to determine that the person is presumed dead. Where a distributive share is payable to a person who remains unknown, SCPA 2222 directs the fiduciary to pay that amount to the Comptroller of the State of New York.
Usually yes, and this is one of the real differences between an Administrator and an Executor. Under SCPA 805 an Administrator must execute and file a bond before letters are issued. If the person being appointed is entitled to the whole estate, no bond is needed, and if every person interested in the estate files an acknowledged consent the Court may dispense with the bond or fix it at a reduced amount set at a sum that adequately protects creditors. An Executor starts from the opposite position: SCPA 710(1) provides that no bond is required of an Executor unless the Will requires one, so a bond waiver clause in a New York Will confirms the default rather than creating an exception. Where an Executor is to hold, manage or invest property for the benefit of someone else, SCPA 806 requires a bond unless the Will provides otherwise. The amount is set by SCPA 801 at not less than the value of the personal property the fiduciary will receive, plus eighteen months of estimated gross rents of any estate real property the fiduciary will receive, plus the probable recovery in any lawsuit the fiduciary will bring.
As with a probate estate (see our Probate Proceedings FAQ), real property located outside New York generally requires its own ancillary proceeding in that property's state — or, for foreign property, that country's own process — in addition to the primary New York administration, since New York's Surrogate's Court has no authority to directly transfer title to out-of-state or foreign real estate. Jointly held property with a right of survivorship typically passes directly to the surviving owner outside of administration entirely, which makes confirming exactly how each property is titled an early, essential step.
A closely held business interest generally requires a qualified, independent appraisal for estate tax and distribution purposes, since there's no public market price the way there is for public securities. Depending on how the estate plan — or the lack of one — is structured, the fiduciary may need authority to continue operating the business during administration, which is exactly the kind of authority that should be addressed in the will or a shareholder/operating agreement in advance, rather than sorted out under time pressure after death.