New York Small Estates and Voluntary Administration

New York Small Estates and Voluntary Administration

If someone dies while holding property in their own name in New York, that property will become part of the decedent’s estate. The estate will be probated in the Surrogate’s Court. If they left a will, their estate would be managed by an executor. If they left no will, the Surrogate’s Court would appoint an administrator to oversee the proper accounting and distribution of the estate property.

But, when a decedent’s estate is valued under $50,000 and is comprised only of personal property, engaging in a full probate process is not cost-efficient. In these circumstances, New York law provides an alternative procedure for small estates called “Voluntary Administration.” This process is designed to reduce costs and simplify the requirements needed to distribute assets left by a decedent, whether they left a will or not.

Limited to Personal Property Only

New York’s Surrogate’s Court Procedure Act (SCPA) provides that Voluntary Administration is only available to settle estates with personal property. If the decedent owned real property such as land, a house, a condo, or any commercial real estate in their individual name, then their estate must be settled through the standard probate procedures no matter the deemed value of the real property in question.

Assets Owned Jointly with Another Person Do Not Become Estate Assets

Only assets owned in the decedent’s name individually will become estate assets. Any property or financial accounts held jointly with another person will automatically pass to the surviving joint owner when the first joint owner dies. This includes real estate owned with the decedent’s spouse as tenants by the entirety, a special type of joint ownership reserved solely for married couples.

What Assets Are Counted When Valuing a Small Estate?

To determine the value of a small estate, the law excludes certain assets from a decedent’s estate, preventing them from counting toward the $50,000 limit. Section 5-3.1 of New York’s Estates, Powers, and Trusts Law (EPTL) sets out a list of assets that vest in the decedent’s surviving spouse and any children under the age of 21. Do not count the following assets when determining if an estate’s value falls under $50,000 to qualify for Voluntary Administration:

  1. Up to $20,000 of housekeeping utensils, musical instruments, sewing machines, jewelry unless disposed of in the will, clothing of the decedent, household furniture and appliances, electronic and photographic devices, and fuel for personal use,
  2. Up to $2,000 of religious books, family pictures, other books, computer tapes, discs and software, DVDs, CDs, audio tapes, record albums, and other electronic storage devices, including but not limited to videotapes, used by the family,
  3. Up to $20,000 of domestic and farm animals with their necessary food for sixty days, farm machinery, one tractor, and one lawn tractor,
  4. *(See Note at bottom of this list: Special conditions apply for purchasing items exceeding value.)
  5. One motor vehicle valued at up to $25,000.
  6. Up to $25,000 in cash, checking, savings, and money market accounts, certificates of deposit or equivalents thereof, and marketable securities. (Funeral expenses must be paid first.)

*Note: The property described in entry number 4 on the list is a special provision in the law that permits the surviving spouse or child under age 21 to obtain listed items that might exceed the values set out above. The purchase price for the desired item will be the amount by which the item exceeds the limit. For example, if the decedent owned an automobile worth $30,000, then the surviving spouse could purchase the car for $5,000. The spouse was already entitled to the first $25,000 of the car’s value by statute. And the additional $5,000 can be paid from any funds described in entry number 6 on the list.

There are other important considerations in determining whether your recently deceased family member’s estate qualifies as a small estate and is eligible for Voluntary Administration. If you have questions about the process, you should contact the experienced probate and estate lawyers at Ely J. Rosenzveig & Associates. Our legal practice has focused on probate and estate matters for many years, and we can advise you about the most cost-efficient and time-saving methods of settling the decedent’s affairs.

Who Can Petition for Voluntary Administration of a Small Estate?

If the decedent left a will, then the person named as executor will file the petition for Voluntary Administration. When the decedent dies without a will, then the law prefers that the closest survivor file the petition, giving priority first to the surviving spouse, then the adult children. If there is no spouse or child, or they decline to file the petition, then one of the decedent’s surviving parents may file for the small estate to proceed through Voluntary Administration.

Voluntary Administration
To assist you in understanding the general obligations of executors and administrators of estates in New York, Ely J. Rosenzveig & Associates created this checklist outlining the key tasks you will need to complete to fulfill your assignment.

How to Proceed with Voluntary Administration in a Small Estate in New York

The process begins when the executor or the nearest surviving family member files a Petition for Voluntary Administration with the clerk of the Surrogate’s Court in the County where the decedent lived prior to their death. That petition must be accompanied by  an Affidavit in Relation to Settlement of Estate Under Article 13, SCPA, and the decedent’s death certificate.

The affidavit will identify the nature and value of the estate assets that will be the subject of the small estate administration. In some cases, the value of an asset may not yet be determined. If this situation arises, then the Voluntary Administrator will need to file an amended affidavit when the value is established. If the newly discovered value exceeds the small estate limit, then the person administering the small estate must notify the Surrogate’s Court immediately.

The party who files the original petition must also pay a $1.00 filing fee and provide the clerk of the court with as many stamped envelopes as there are heirs or potential distributees. The clerk will use the envelopes to notify those persons of the proceedings.

Court Issues Certificates for Each Asset

When the Surrogate’s Court reviews and approves the petition and affidavit identifying the assets, the court will issue a certificate for each asset. The administrator will open a bank account in the name of the estate into which the assets will be deposited as they await final distribution. Once all the assets are obtained and accounted for, and all the decedent’s funeral expenses and enforceable debts are paid, then the remaining estate assets can be distributed either according to the terms of the decedent’s will or as required by New York’s law of intestate succession.

Call on Ely J. Rosenzveig & Associates to assist you in matters pertaining to New York Small Estate and Voluntary Administration
Call 1.914.816.2900 or email us at: [email protected]

Ely J Rosenzveig
Ely Rosenzveig

Ely J. Rosenzveig practices principally in the fields of elder law, trusts & estates, tax planning, employment law, and mediation. He has extensive experience in federal and New York State tax law, and has successfully represented a wide range of clients on FBAR & FATCA compliance issues. Ely also practices employment law, with a particular emphasis on age and disability discrimination, negotiating compensation agreements, and severance issues. With his extensive background in the law, his experience as a congregational rabbi, and his specialized training in Mediation at Harvard Law School, Ely is also available as a professional mediator to help facilitate optimal solutions in matters ranging from family and estate disputes to multi-party commercial issues.

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