A large estate may have little spendable money
An estate containing a house, a small business interest and a modest bank account presents a different administrative problem from an estate holding only cash. A total value does not reveal who owns each asset, whether it belongs in the estate or how quickly funds can be obtained. An inventory is useful when it preserves those distinctions instead of reducing everything to one estimated number.
Imagine a decedent who owned half of a building with a sibling. Listing the entire building as estate property overstates the interest under review. Listing only last month’s rent understates it. The fiduciary needs the ownership documents, information about the fraction owned and a defensible approach to valuation. The mortgage and operating costs should be identified separately.
Classify before adding
New York’s Surrogate’s Court inventory rule, 22 NYCRR 207.20, distinguishes individually owned property and interests from categories such as jointly owned property, trust assets and property with a beneficiary designation. The filing requirement should not be confused with a ruling that every item on a family’s financial list belongs to the probate estate.
For a working schedule, record the asset, evidence of ownership, relevant valuation date, source of the figure and unresolved questions. A brokerage statement may provide a useful dated figure; a closely held company may require more investigation. Label an estimate as an estimate. Preserve the reasoning behind later changes so that the inventory can be reconciled with subsequent transactions.
Build a separate cash schedule
The immediate cash question is narrower: which account can the duly authorized fiduciary use, what expenses are approaching and what restrictions apply? A beneficiary’s separate insurance payment is not automatically an estate checking account. Likewise, a hoped-for property sale is not money already collected. Separate confirmed receipts from possible sources that require further authority, consent or a completed transaction.
EPTL 11-1.1 supplies fiduciary powers subject to limitations in governing instruments and court orders, with additional conditions for particular powers. It addresses matters including protecting property with insurance and making ordinary repairs. It should not be read as permission to sell any asset immediately without considering specific gifts, restrictions or the fiduciary’s duties.
Return to the half-owned building: first identify necessary carrying expenses and who has paid them, then examine the estate’s rights and obligations alongside the co-owner’s. An appraisal, a rent ledger and an expense schedule answer different questions. Keeping those records distinct helps counsel and the fiduciary assess administration without mistaking paper value for liquidity or a bookkeeping entry for authority to act.
Related guidance: Probate and Estate Administration; Legacy Insurance and Liquidity Planning; Planning for a successor trustee; Powers of attorney and advance directives; Trusts; Powers of attorney guide.
About the Firm
The Law Office of Craig A. Fine, P.C. provides legal services involving residential and commercial real estate, business law, landlord-tenant matters, commercial litigation, wills, trusts and estate planning. The firm is based at 159 New Dorp Plaza, Staten Island, New York 10306. Readers may review the firm’s practice areas or request a consultation.
About Craig A. Fine, Esq.
Craig A. Fine, Esq. is the founder and managing partner of The Law Office of Craig A. Fine, P.C. He has practiced law since 2007 and is licensed in New York, New Jersey and Florida. He is also the author of The Fine Line Blog, where he publishes practical commentary about real estate, business law and estate planning.
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Craig A. Fine, Esq.
Attorney and founder of The Law Office of Craig A. Fine, P.C. Contributor covering business law, commercial real estate, estate planning, lending, litigation, compliance and ORM.
