{Read in 5 Minutes} As a Trusts and Estates attorney, I frequently represent Executors and Administrators of New York Estates. After the process of seeking their appointment in the Surrogate’s Court and the issuance of Letters, I very often sit down with the Executor or Administrator to discuss the steps they need to take to administer the Estate to completion.
Very often opening an Estate Account is one of the first, if not the first, thing on the list. An Estate Account is a bank account that the Executor maintains in the name of the Estate over which they are the sole signatory. The Executor or Administrator collects the various bank accounts payable to the Estate, including any proceeds from the sale of real property, any checks payable to the deceased, or tax refunds, and deposits them into this bank account. The bank account is somewhat temporary in nature. The Executor or Administrator just keeps it open from the date that they receive Letters from the Surrogate’s Court, until the date that they make the final distribution to the beneficiaries of the Estate.
According to New York State law, the Executor, or Administrator, must open the account physically at a bank or brokerage within the state of New York. However, once they open it at a New York State branch, they can make transactions in their home state if they live outside of New York. An Executor or Administrator may open more than one account in the name of the Estate. For example, if there’s a probate challenge that’s going to delay the probate of the Will, the Executor may choose to invest some of the funds in the market via a brokerage account — or open a simple CD.
Now that we understand what an Estate account is, what does an Executor or Administrator need to bring to the bank when opening one?
•Death Certificate
The Executor or Administrator likely has access to several certified copies of the deceased’s death certificate. The bank will ask for one of the certified copies. Some banks will hold onto it and not return it, however, most banks will scan it and hand it back to the Executor or Administrator.
•Certificate of Letters
If the Estate has an Executor, the Executor brings Letters Testamentary. If the Estate has an Administrator, the Administrator brings Letters of Administration. Most banks will request a Certificate of Letters that is dated within 90 days. Certificates of Letters are available from the cashier’s department in all of the Surrogate’s Courts across the City. The cost is $6 per certificate.
•Taxpayer Identification Number for the Estate
A taxpayer identification number, “TIN” (also known as an Employer Identification Number, “EIN”), is a unique identifying number that an Estate receives from the Internal Revenue Service. Much like individuals who open bank accounts using a Social Security number, an Estate must open bank accounts and transact business using its TIN. The IRS has an online submission form, where Executors and Administrators can apply for a number online, often receiving the number instantaneously when submitting the application. While an Executor or Administrator can apply for this themselves, it’s often a good idea to do this with their attorney or accountant to ensure that they complete the forms correctly.
•Current Photo Identification
Like opening up any bank account or any other account, the bank or brokerage will ask the signatory to present government-issued photo identification. This can be a passport, a driver’s license, or a non-driver identification card. The identification must be current, and Executors and Administrators are advised to confirm this before going to the branch. The bank will scan a copy and return it to the Executor or Administrator.
Once the Estate has an Estate Account open, they can use it to pay for the various expenses of the Estate. Some of the first things the Executor or Administrator might do is reimburse the person who paid the funeral costs, deal with any creditors of the Estate, and then when the time is right make distribution to beneficiaries.
The Executor or Administrator can also pay all of their ongoing expenses from this account, including Court filing fees, income tax returns, appraisals, and accountant fees. To the extent the Executor or Administrator advanced these costs before getting access to Estate funds, they can reimburse themselves.
For more information on this topic, please, contact me.
