By Roman Aminov,
When families sit across from me after a loss, they often assume the executor controls everything the deceased owned. I gently correct that. Some of the largest accounts a person leaves behind never pass through the estate at all, and understanding why is one of the most important things I teach a new executor. Joint accounts and payable-on-death designations follow their own rules in New York, and those rules can either simplify your job or hand you a real headache.
Most of what my clients administer flows through the estate. A few categories do not. An account held jointly with a right of survivorship, or one stamped payable-on-death, transfers straight to the surviving owner or the named beneficiary the moment the depositor dies. The law calls these testamentary substitutes, and they pass by operation of law, outside the will, outside their control as executor/administrator. The beneficiary usually walks into the bank with a death certificate and walks out with the funds. No court order, no probate. For a grieving spouse who needs cash for the mortgage, that speed is a genuine mercy.
A payable-on-death account, often called a Totten trust here because the idea was born in a 1904 New York case, works a little differently from a joint account. During life, the depositor keeps complete control and the named beneficiary has no rights at all. Only at death does the beneficiary gain access. That distinction matters, and it shapes how I advise the people involved.
Now the part executors forget. Just because an account skips probate does not mean it skips the tax return. New York measures estate tax against the gross estate, and these non-probate accounts get pulled right back in for that calculation. Sound New York estate administration means tracking down every joint and POD account, valuing it as of the date of death, and reporting it, even though the executor never controlled a penny of it. With the 2026 New York exemption sitting around $7.35 million and a notorious cliff that can tax an entire estate once it creeps just past the threshold, leaving these accounts off the ledger is a mistake I refuse to let an executor make.
Sometimes the estate simply lacks enough probate assets to cover funeral costs, administration expenses, and valid debts. New York lets me look to certain non-probate funds, including Totten trust money, to satisfy those obligations when the probate estate falls short. And when I suspect an account was emptied improperly, I can open a discovery and turnover proceeding in Surrogate's Court to investigate and, if warranted, bring the money back.The goal is always the same, which is an honest accounting that protects both the beneficiaries and the executor standing in the middle.
If you're in Queens, Brooklyn, Nassau County, or the greater New York City area and need to administer an estate that includes joint or payable-on-death accounts, contact our office today at 347-766-2685. We'll guide you through every step of the Surrogate's Court process with clarity and care.
