Small Estates Threshold Raised To $50,000.

Small Estates Threshold Raised To $50,000.
Author: Michael P. Ryan, Of Counsel

One frequently hears of the wisdom of “avoiding probate.” Often, all the reasons given for doing so do not disappear if your assets are placed in trust. Nevertheless, it is important to keep in mind that a person’s assets in his or her name upon death may be subject to informal administration that may not require an attorney’s assistance to manage at all. Of course, any questions or doubts are best resolved in consultation with an attorney, but a recent change in the law is worth noting.

The threshold for New York small estates proceedings has been raised from $30,000 to $50,000, effective on November 25, 2019. (Surrogate’s Court Procedure Act Section 1301.) This means that the need to make formal application for letters to administer an estate may not be required if the assets that pass by the laws of intestacy or by will do not exceed $50,000.

Also, it is important to keep in mind that in addition to small estates, there are assets of a decedent that entitle a surviving spouse or children to collect estate money and/or property with a total value of up to $92,500. The law that governs “exempt property” is Estates Powers and Trusts Law Section 5-3.1 and is readily available on the internet.

Finally, please keep in mind that these considerations apply to assets owned solely by a person when he or she dies. A person can die with millions of dollars in assets yet without the need for the intervention of the Surrogate’s Court at all. If those assets were held in trust or were subject to beneficiary designations (like life insurance, joint bank accounts with right of survivorship, or pension plans), then the terms of those instruments will generally govern, even over the terms of a will.