Estate Administration and Probate: Protect Your Marital Inheritance

A surviving spouse may elect to take either what the will provides or the statutory share, whichever is greater. In New York, the statutory share is typically one-third of the net probate estate if the decedent leaves issue (children), or one-half if there are no children. The election must be filed within a specific timeframe, and failure to act forfeits this right. From a practitioner's perspective, I routinely advise surviving spouses that the elective share calculation is highly fact-specific and often requires appraisal of real property and other assets to determine the true estate value.

The Surrogate's Court in each county oversees probate proceedings and has authority to interpret wills, resolve disputes over the elective share, and approve distributions. When a surviving spouse contests the will or asserts an elective share claim, the Surrogate's Court must evaluate the validity of the will and the spouse's entitlement under statute. The court's role is not to rewrite the will but to apply New York law precisely as written. Procedural timing is critical; missing a deadline in Surrogate's Court can result in loss of rights that cannot be recovered.

The executor must determine the fair market value of all estate assets as of the date of death or, in limited cases, six months after death. This valuation drives both the federal estate tax calculation and the surviving spouse's elective share. Undervaluation can trigger IRS audit and penalties; overvaluation can waste the decedent's federal exemption. Real property, closely held business interests, and art collections require professional appraisal, and disputes over valuation between the executor and beneficiaries are common.

The unlimited marital deduction allows a decedent to pass an unlimited amount of property to a surviving spouse free of federal estate tax. However, this strategy only defers tax; it does not eliminate it. If the surviving spouse later remarries or the property passes to non-spouse beneficiaries, the tax liability resurfaces. Planning should consider whether a QTIP trust or other deferred-tax structure better serves the family's long-term interests. These decisions must be made during probate or shortly after, and delay can result in lost tax planning opportunities.

When real property encumbered by a mortgage passes to a surviving spouse, the spouse may assume the mortgage or allow foreclosure if the property is underwater. The executor must decide whether to pay off the debt from estate assets or permit the beneficiary to inherit the property subject to the lien. In some cases, a lender may require the estate to satisfy the mortgage before releasing title, which can deplete estate liquidity. Issues involving foreclosure and real estate default services may arise if the decedent was in default at death.

If multiple beneficiaries inherit real property as tenants in common, disagreement over whether to sell or retain the property frequently leads to partition litigation. One beneficiary may want to sell and divide proceeds; another may wish to retain the property for personal use or investment. Land use and real estate disputes in this context often require court-ordered partition or forced sale. Early mediation or buyout agreements can prevent costly litigation.