The State Senate has passed legislation (S.3880) sponsored by Senator Bill Larkin (R-C, Cornwall-on-Hudson) that will allow small estates to include real property in addition to personal property as long as the gross value of the real property is $15,000 or less.
"Under current law, small estates are allowed to be probated by a more inexpensive method that is still supervised and sanctioned by the surrogate court," explained Senator Larkin. "The logic for establishing this more inexpensive procedure for small estates is so that the administrative costs do not take an inordinate percentage of funds that should rightfully go to the beneficiaries of the deceased."
Many states include within the definition of small estates assets such as real property so that administrative costs can be minimized and so that more money can be devoted to the beneficiaries’ welfare. Under this bill, small estates that have real property with a gross value of $15,000 or less could still be considered a small estate.
Larkin said, "The kinds of real property that have a gross value of $15,000 or less would probably include items such as a mobile home, a small family vacation bungalow, or vacant small parcel of land, for example," he said. "Without this legislation, these things may need to be sold to pay for the estate’s administration costs. We should make this change in the law so that people don’t have to lose these assets."
Larkin also noted that since under the current law, the administrative costs for probating low value real estate is relatively high, many small estates are not probated properly because no lawyer is retained due to the high cost of legal fees. Consequently, these real properties are not properly transferred to the beneficiaries causing confusion as to who holds the titles to these parcels. As a result, these low value parcels are often neglected and end up reverting to local governments for payment of taxes.
The bill was sent to the Assembly.
