If you have been informed that you need “letters testamentary” after the passing of a loved one, you will want to read this.
When someone passes away, with assets such as real estate, investments, bank accounts, insurance policies or retirement accounts, in their own name, chances are you will need “letters testamentary.”
“Letters testamentary” is a legal document issued by the surrogate’s court, which gives you the legal authority to collect those assets. Letters testamentary are only issued if someone passed away with a last will and testament.
The “letters testamentary” document is only provided if the will is approved, and the executor nominated in the will to distribute the assets, is approved. This approval process is known as probate, and nothing gets distributed until the probate process is completed.
So, if you think that just because you are listed as a beneficiary in someone’s will, you will automatically receive and have rights to whatever gifts they may have left to you in their will, it’s not so easy.
Probate requires the executor to formally petition the court and provide various documentation to support the validity of the petition. This may take several months, or even years, depending on the situation, or if the will is contested.
People often get confused when a loved one passes away without a will, with assets in their own name. Sometimes banks and financial institutions mistakenly inform families that they need “letters testamentary,” when they actually need “letters of administration.” “Letters of administration” are also issued by the surrogate’s court. However, “letters of administration” are issued when someone passes away without a will. In this situation, a family member needs to petition the court to gain the legal authority to make distribution. The court decides who will be given the legal the authority. In the end, that person may or may not be a family member. Also, without a will, New York State law governs how those assets will be distributed and who will receive them.
Once either “letters testamentary” or “letters of administration” have been issued, the person granted legal authority by the court will be able to manage the affairs of the estate. Some of those responsibilities include paying the expenses of the estate, obtaining a separate tax identification for the estate (a social security number is only valid for a living person), gathering estate assets, establishing estate bank or investment accounts, transferring real estate, and finally distributing the assets of the estate to the recipients.
Although letters testamentary will allow you to handle the affairs of the estate, you will not be able to use the letters testamentary to collect assets that passed by operation of law outside of the estate. A common example of this is when the person who passed away had a bank account that was held jointly with rights of survivorship with another person, the funds in that account automatically pass to the surviving joint owner (regardless of what the will states) and therefore the executor will not have authority to collect those assets despite having the letters testamentary issued to him/her.
If you been told you need “letters testamentary,” the best thing to do is to call a reputable probate attorney who can guide you through the court process and assist you in getting the legal authority you need to manage and distribute the estate of a loved one.