How long does probate take in New York if the estate includes bitcoin? As we talked about in a prior blog How Long Does Probate Take in New York, generally probate takes 15 months or longer; sometimes up to 3 years. Those numbers are actually on the lower side, because everything is more delayed these days.
Here we will discuss how a new-ish asset like bitcoin may add some delays.
How long does it take to become executor of a New York estate with bitcoin?
Typically, it takes about 3-6 months to file and get the court paperwork naming someone as executor. The reasons for the delays are:
- Collecting documents;
- Court delays; and
- Hearings before the court will decide who should be executor.
Even with bitcoin added to the mix, this step of the probate process will remain about the same. The only area where bitcoin would make any difference is the estimated value of estate on the probate petition. The executor may have trouble pinning down how much bitcoin the decedent had. Also, because bitcoin is a newer hot topic, the knowledge that the decedent had bitcoin could attract greedy heirs. “Hmm, Uncle Joe had bitcoin; maybe I should contest his will,” etc.
How long to settle an estate with bitcoin in New York?
Typically, it takes 15 months to 3 years to settle an estate. Settling an estate means the executor collects assets and pays debts and taxes to get the net amount to distribute to the heirs.
Of course, after 2020, everything has slowed down. Probate is currently taking much longer than mentioned above. Then, if you add a newer asset like bitcoin, a few more months may be added to the process.
The first reason is because of bureaucracies. Even traditional banks and brokerages are not great at handling decedent’s estates. It’s a constant game of phone tag. New bureaucracies (exchanges such as Binance, Kraken, Gemini, Coinbase) will probably struggle with processing the death claims. They may not yet know what they are doing, because they don’t have a well-oiled machine for this kind of process.
The next possible cause of delay is if your decedent held his own keys and own wallet. Taking custody of self-hosted wallet and transferring it to secure multi-sig estate wallet could be time-consuming. The executor would need a lot of education to know how to handle it. It may be wise to appoint an executor who is familiar with both probate rules and bitcoin custody.
Another cause of delay for the executor is deciding whether to liquidate the bitcoin (convert it to dollars). With other assets, you want to covert the assets to dollars as quickly as possible to avoid the risk of price fluctuations. But bitcoiners tend to be hardcore and may specify that they want the bitcoin (not dollars) to go to the heirs.
Lastly, taxes add time to the process. Besides estate tax, figuring out the capital gains tax can be daunting. Even just filing a regular income tax return with bitocin may cause your tax preparer and examiner to conduct additional research on the rules. As we discussed previously, getting tax clearance tax a long time, even without bitcoin.
How long to close an estate with bitcoin in New York?
Generally, the final phase (closing the estate) is anywhere from 3 months to 1 year. Again, the executor collects documents (statements, transcripts, and proof of what occurred during the probate process). Then the executor prepares the accounting, which are the books and records in a specific format required by the court. Lastly, the executor has to deal with any contests or objections to the will. Dealing with a contested will can add months to the final phase.
So, when the executor collects documentation of the assets, how does he document bitcoin acquisition? You can’t call a bank and ask for a ledger. You might be relying on screenshots. It’s not even clear if you can rely on the exchanges; you may have to reference the mempool.
How does the executor document bitcoin sale? Hopefully the sale was made on the exchange, and you can document it that way. After a sale, how does the executor protect himself and ensure the heirs that the bitocin didn’t lose value?
If you have an inexperienced person putting together an accounting and the court doesn’t accept it, much more time will be added.
We’ve tried to apply much of our probate knowledge to bitcoin situations. Let us know if you find this useful. Also check out my book, “How Probate Works,” to understand how probate works in general. Then, add to that all the complexities of probating an estate with bitcoin!
Request your free consultation
Sign-up for your free consultation using the form above, and I’ll be happy to email you a free chapter from Anthony’s best-selling book “How to Leave Bitcoin to Your Heirs.”
E290 Professional Executor vs Beneficiary Designations for Solo Agers
/in Solo Agers /by Anthony ParkA few Solo Agers have asked if they can use beneficiary designations instead of a traditional estate plan. We’ll explain some pros and cons of beneficiary designations, and why a professional executor may work better.
Why traditional estate planning doesn’t work for Solo Agers
Most traditional estate plans are centered around a friend or family acting as your executor to manage probate. Solo Agers often don’t have an assumed family member to serve in this role. Sometimes a Solo Ager has a friend or sibling, but for several reasons, it wouldn’t work out for those loved ones to serve. For example, friends and siblings may be the same age or older than the Solo Ager. There also may not be the same level of trust that one would have with a spouse. Or maybe the relationships are estranged.
For the reasons above, Solo Agers seek to avoid the need for an executor altogether. It’s not hard to blame them. For example, we had a Solo Ager client (no kids, no family, no close friends) who could not get it through to other attorneys that she had no one to appoint. She became so frustrated with their standard advice that she wanted to avoid appointing an executor altogether.
Why Solo Agers like the idea of beneficiary designations
Beneficiary designations go directly to the heirs and “avoid probate.” This is common with life insurance and retirement plans. When someone dies, the beneficiary just fills out and submits claim forms. There is no need to go through probate for that particular asset.
Sounds easy and great, right? But in most cases, using only beneficiary designations does not work. Sure, it would work for a particular account, but realistically, you are probably not avoiding probate altogether. In order to completely avoid probate, you need a 100% perfect beneficiary designation plan. This means you cannot leave any assets out of your plan (zero assets left in probate, zero lingering debts or taxes). This becomes highly unlikely.
Any outstanding debts at the time of death need to be paid by the estate representative. Because of this, probate has to happen anyway to figure out pro-rata which accounts need to be reduced to pay your funeral bill or lingering medical bills, unsecured mortgage or credit card bills.
If all assets go to named beneficiaries, then the IRS goes directly after your beneficiaries. Your heirs will be harassed until the taxes and debts are paid. No one wants that for their loved ones. Additionally, it’s unlikely that someone will volunteer to act as your executor and deal with these issues.
Why Solo Agers like the idea of a professional executor
The main attraction is that you appoint someone (experienced) to handle everything. The worry is that it will be hard to find a professional executor and it will also be expensive to hire one.
Regarding the cost, the executor’s fee is set by state law. This fee is the same whether you hire your 19-year-old unemployed nephew, or the esteemed professional executor. It is more bang for your buck to go with the professional!
How do you find a professional executor? First, you know that we can fill that role! Second, you can go to a bank and see if they have a trust officer who can serve (even if you don’t have a trust). However, most banks have liquid minimum asset requirements of 2 million or more (meaning this cannot include your home).
How do you name a person as your executor? You don’t necessarily have to pay an estate attorney to draft your will. While it’s usually a better idea to hire an attorney to draft the will (especially in complex situations), there are plenty of good estate planning software programs you can use yourself.
If you find a professional executor, interview them before you commit to appointing them. To learn more about executors and estate planning, check out my book, “The Solo Ager Estate Plan.” For a free E-copy, click the link below.
Free copy of “The Solo Ager Estate Plan”
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E289 Why You Need a Local Executor in New York
/in Professional executor /by Anthony ParkMost people correctly assume you need a local executor in New York, but they may not know exactly why. Let’s review a few real-world scenarios and reasons why you need an executor local to New York.
E287 How Long Does Probating Bitcoin Take in New York?
/in Bitcoin inheritance /by Anthony ParkHow long does probate take in New York if the estate includes bitcoin? As we talked about in a prior blog How Long Does Probate Take in New York, generally probate takes 15 months or longer; sometimes up to 3 years. Those numbers are actually on the lower side, because everything is more delayed these days.
Here we will discuss how a new-ish asset like bitcoin may add some delays.
How long does it take to become executor of a New York estate with bitcoin?
Typically, it takes about 3-6 months to file and get the court paperwork naming someone as executor. The reasons for the delays are:
Even with bitcoin added to the mix, this step of the probate process will remain about the same. The only area where bitcoin would make any difference is the estimated value of estate on the probate petition. The executor may have trouble pinning down how much bitcoin the decedent had. Also, because bitcoin is a newer hot topic, the knowledge that the decedent had bitcoin could attract greedy heirs. “Hmm, Uncle Joe had bitcoin; maybe I should contest his will,” etc.
How long to settle an estate with bitcoin in New York?
Typically, it takes 15 months to 3 years to settle an estate. Settling an estate means the executor collects assets and pays debts and taxes to get the net amount to distribute to the heirs.
Of course, after 2020, everything has slowed down. Probate is currently taking much longer than mentioned above. Then, if you add a newer asset like bitcoin, a few more months may be added to the process.
The first reason is because of bureaucracies. Even traditional banks and brokerages are not great at handling decedent’s estates. It’s a constant game of phone tag. New bureaucracies (exchanges such as Binance, Kraken, Gemini, Coinbase) will probably struggle with processing the death claims. They may not yet know what they are doing, because they don’t have a well-oiled machine for this kind of process.
The next possible cause of delay is if your decedent held his own keys and own wallet. Taking custody of self-hosted wallet and transferring it to secure multi-sig estate wallet could be time-consuming. The executor would need a lot of education to know how to handle it. It may be wise to appoint an executor who is familiar with both probate rules and bitcoin custody.
Another cause of delay for the executor is deciding whether to liquidate the bitcoin (convert it to dollars). With other assets, you want to covert the assets to dollars as quickly as possible to avoid the risk of price fluctuations. But bitcoiners tend to be hardcore and may specify that they want the bitcoin (not dollars) to go to the heirs.
Lastly, taxes add time to the process. Besides estate tax, figuring out the capital gains tax can be daunting. Even just filing a regular income tax return with bitocin may cause your tax preparer and examiner to conduct additional research on the rules. As we discussed previously, getting tax clearance tax a long time, even without bitcoin.
How long to close an estate with bitcoin in New York?
Generally, the final phase (closing the estate) is anywhere from 3 months to 1 year. Again, the executor collects documents (statements, transcripts, and proof of what occurred during the probate process). Then the executor prepares the accounting, which are the books and records in a specific format required by the court. Lastly, the executor has to deal with any contests or objections to the will. Dealing with a contested will can add months to the final phase.
So, when the executor collects documentation of the assets, how does he document bitcoin acquisition? You can’t call a bank and ask for a ledger. You might be relying on screenshots. It’s not even clear if you can rely on the exchanges; you may have to reference the mempool.
How does the executor document bitcoin sale? Hopefully the sale was made on the exchange, and you can document it that way. After a sale, how does the executor protect himself and ensure the heirs that the bitocin didn’t lose value?
If you have an inexperienced person putting together an accounting and the court doesn’t accept it, much more time will be added.
We’ve tried to apply much of our probate knowledge to bitcoin situations. Let us know if you find this useful. Also check out my book, “How Probate Works,” to understand how probate works in general. Then, add to that all the complexities of probating an estate with bitcoin!
Request your free consultation
New Client v5 Free Bitcoin Chapter
"*" indicates required fields
Sign-up for your free consultation using the form above, and I’ll be happy to email you a free chapter from Anthony’s best-selling book “How to Leave Bitcoin to Your Heirs.”
How to Probate Self-Custodied Bitcoin
How to Hire a Bitcoin Executor
E339 Why Sharing Your Seed Phrase is a Bad Bitcoin Inheritance Plan
E286 How Will My Executor Know I Died?
/in Solo Agers /by Anthony ParkMany of our Solo Agers wonder “how will my executor know I died?” (Especially if they’ve chosen me as their professional executor, as opposed to someone they see daily). Solo Agers tend to live alone, so this is a very understandable and common question.
E284 Tips for Cleaning Out Deceased’s Home
/in Probate, Probate Real Estate /by Anthony ParkHere are our tips for cleaning out the decedent’s home and getting it presentable for sale.
E283 5 Stages of Probating Bitcoin
/in Bitcoin inheritance /by Anthony ParkProbating bitcoin is more complicated than usual probate. We’ve discussed the 3 stages of probate generally. Here, we’ll describe some specifics of the process for when the decedent owned bitcoin.
E281 MTA Covid Death Benefit and Beneficiaries
/in Probate /by Anthony ParkDoes the MTA covid death benefit have beneficiaries, and if not, who should inherit? The MTA is paying a pretty generous amount (about $500,000) to the estate of any employee who passed away with or from covid. The requirements seem to be tightening up a bit, but we’ll see what comes of it.
E280 Someone Died, But No One Wants to be Executor
/in New York Professional Executor, Professional executor /by Anthony ParkWe often get hired when someone has died, but no one wants to be the executor. Sometimes there was a will with nominated executors who don’t want to serve. Other times there was no will, but none of the next of kin want to do the job. So they hire us as the professional executor.
E279 How to Sell a New York City Loft in Probate
/in Probate, Probate Real Estate /by Anthony ParkWe’ll discuss how to sell a loft in probate. This is yet another type of apartment that is unique to New York. We’ve talked about co-ops in the past, which seem mind-boggling to many people (even New Yorkers).
What is an artist-in-residence?
It is too much to cover in depth, so this is a link from Street Easy, a local real estate blog: https://streeteasy.com/blog/sohos-artist-in-residence-law-101/
To live in a loft that has been converted from commercial use, the buyer is supposed to be an artist who lives in their studio. In other words, a work-living space. Not that many people are professional artists, but buyers may be required to be a “certified” artist.
This impacts probate by sorting through paperwork to confirm that the decedent was an artist-in-residence. This requirement also limits your pool of buyers.
There’s a process to get certified as an actual artist by the City of New York. As with any bureaucratic process, apparently there are lots of workarounds. And there must be, because I’ve never seen an actual artist living in these multi-million-dollar lofts. Note that there is an income requirement; you can’t just make finger paintings and declare yourself an artist.
It’s a niche issue, so make sure to work brokers who have deep experience. Otherwise, you will end up wasting a lot of time and limiting the number of potential buyers.
Cleanout: the elevator problem
Many of these were warehouses converted into lofts. That means there is not a traditional lobby with an elevator. The elevator goes directly into the living space. There is a key to each floor, so the elevator won’t randomly go to someone else’s loft.
While this living situation is cool and unique, it leads to some issues from the executor’s perspective.
For example, when you are using the one elevator that leads to all the floors, you are denying the other residents use of the elevator while you are cleaning out the decedent’s loft. This is not unique to probate; it happens when anyone moves in or out. It’s just one more twist for the executor to deal with.
We experienced an odd situation where we didn’t have the key to the door that led from the elevator to the loft. The locksmith drilled, held the elevator door open with one hand, and then had to undo everything to let someone else on. Then he had to start over again to help us.
The positive side is that these elevators are huge, since the lofts used to be warehouses. You can fill it with stuff and might only need two or three runs before giving the elevator back to the rest of the building.
Unique layouts of New York City loft apartments
There are no rooms; just a huge open space! You can get an architect and a contractor to put up some walls, but in its raw form, it is just a huge open warehouse floor.
Again, this is not unique to probate, but to anyone selling a loft. You’ll have a narrow set of buyers who are interested in living like that. Executors, since you have many other things to worry about, make sure you are working with a broker who is familiar with selling these lofts.
Lofts are very unique, but plenty of buyers love the space and uniqueness. And as a double-whammy, many of these lofts are co-ops, as well! So, you may deal with extra problems and rules.
To read about various probate-related situations, check out my book, “How Probate Works,” available on Amazon.
Request your free consultation
New Client v3 Free Probate Chapter
"*" indicates required fields
Sign-up for your free consultation using the form above, and I’ll be happy to email you a free chapter from Anthony’s best-selling book “How Probate Works.”
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E278 How to Probate a Bitcoin Miner’s Estate
/in Bitcoin inheritance /by Anthony ParkHow do you probate a Bitcoin miner’s estate? We’ll cover: what a miner looks like, whether to keep the miner running through probate, and how miners will probably have yet another wallet to figure out.