When a loved one passes away, settling their estate can be a difficult process. Here in New York, one of the key steps is probate – the legal process for administering the estate.
But not every estate has to go through formal probate. New York law has rules on asset thresholds that determine whether full probate is required.
When is Probate Required in New York?
Under New York law, any estate valued over $50,000 must go through probate if there is a valid will. The will must be submitted to and validated by the Surrogate’s Court before assets can be distributed to beneficiaries. Even without a will, estates over $50,000 typically must be probated.
For smaller estates under $50,000, New York has a simplified “small estate” proceeding that allows faster distribution without formal probate. But even then, the Surrogate’s Court is still involved in appointing an administrator.
According to surveys, the median estate value in New York is around $300,000. So, for most New Yorkers, probate will be required to settle the estate properly.
Key Asset Thresholds for Probate in NY
New York has set some clear asset thresholds that determine whether probate is required:
- Estates worth $50,000 to $500,000 – These estates must go through probate in New York. Even if you have a will, the estate must be probated so the will can be validated.
- Estates worth $500,000 to $1 million – While not an absolute requirement, most estates in this range will need to go through probate as well. With higher asset values, creditors and tax agencies may need to be notified of the estate.
- Over $1 million – Estates exceeding $1 million in value will almost certainly have to go through probate. At this level of assets, probate provides critical court supervision of the estate.
So, while the probate requirements vary across New York’s 62 counties, these statewide thresholds give a general guideline for when probate is necessary.
What Assets are Included in Determining Estate Value?
When tallying the total value of an estate, there are several categories of assets to consider:
- Bank accounts – This includes checking/savings accounts, certificates of deposit, money market accounts, and other cash accounts the deceased held.
- Investment and retirement accounts – Stocks, bonds, mutual funds, and pension accounts are part of the estate. IRAs and 401(k)s have named beneficiaries, so they may bypass probate.
- Life insurance payouts – If the estate is named as the beneficiary of a life insurance policy, the payout is included. If there is an individual beneficiary named, that payout may be exempt.
- Real estate – Any real property like a house, land, vacation home, or rental/investment property must be valued. This is often one of the largest assets.
- Vehicles – Cars, boats, RVs, and other registered vehicles are part of the probate estate.
- Other valuables – Artwork, jewelry, collectibles, household items, and any other personal property of value get tallied.
Not all assets are subject to probate, but a significant portion usually is. An experienced estate planning attorney can help account for which assets apply toward probate thresholds.
Assets Exempt from Probate in New York
Certain types of assets can bypass the probate process even if they are quite valuable:
- Trust assets – Property transferred into a revocable living trust while living will avoid probate. The trust names beneficiaries who take ownership.
- Accounts with designated beneficiaries – Life insurance, 401(k)s, IRAs, pensions, and transfer-on-death investment accounts pass directly to beneficiaries.
- Joint bank accounts – Accounts owned jointly with the right of survivorship let the surviving owner take the funds.
- Payable on death accounts – Bank and brokerage accounts can be set up to transfer to a beneficiary at death without probate.
- Tenancy by the entirety – If married, joint real estate owned as tenants by the entirety passes to the surviving spouse.
While these assets are exempt, they may still factor into the value of the probate estate. An experienced probate attorney can advise whether probate can be avoided through using exemptions.
Other Special Probate Considerations in New York
Beyond the asset thresholds, there are some other unique factors that can impact whether probate is required for an estate:
- Surviving spouse – New York grants certain rights and exemptions to surviving spouses that can allow for avoiding probate.
- Location matters – Each Surrogate’s Court in New York counties can have specific quirks in probate rules and filings. Local counsel is key.
- Complex estates – Even if under the $50,000 minimum, complex estates with debts or disputes may need court supervision through probate.
- Real property ownership – Out-of-state real estate or other complex title ownership may necessitate probate even for smaller estates.
With myriad probate rules, having an experienced estate planning attorney in your corner is crucial. These lawyers stay up-to-date on all of New York’s probate laws and procedures.
Consult a New York Probate Attorney
Determining if probate is necessary for an estate in New York depends on several factors – the existence of a will, total asset value, and the types of assets owned. Estates above $50,000 in value will almost always require full probate. Those between $50,000 and $500,000 must be probated.
To discuss your specific situation, The Browne Firm estate planning attorneys are here to help. Contact their team at https://www.thebrownefirm.com/ to schedule a consultation. With years of experience guiding New Yorkers through probate and estate administration, they can provide the answers and support you need during this challenging time.