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Sometimes when a loved one passes away, an individual who believes he or she inherited assets from the decedent will be told at a bank or financial institution that they will need “Letters Testamentary” in order to collect those assets. The question most people have at that point is “What are Letters Testamentary?”
Letters Testamentary is the name for a document issued by the Surrogate’s Court that permits the Executor of an Estate to act on behalf of the estate of a person who died with a Will. The person who is nominated as the Executor under the Will has no authority to act until the Will is probated by the Surrogate’s Court and Letters Testamentary are issued by the court.
In order to obtain Letters Testamentary, an interested party (typically the nominated executor under the Will) will need to petition the Surrogate’s Court and provide pertinent information regarding the decedent, relevant parties (i.e., the spouse, children, etc.) and the decedent’s assets.
Letters Testamentary can provide the Executor (or Co-Executors) with full authorities allowed under the terms of the Will and the law, or they can be restricted at the court’s discretion. Typically if the court grants “full” Letters Testamentary, the Executor will be authorized to handle all the affairs of the estate pursuant to the terms of the Will.
The Executor will be able to use the Letters Testamentary to handle the affairs of the estate, such as obtain a necessary tax identification number for the Estate, collect estate assets, establish estate bank or brokerage accounts, retitle or sell property, pay for administrative expenses, pay debts and liabilities of the decedent subject to the terms of the Will, and distribute the assets of the estate to the beneficiaries according to the Will, among other things.
Although Letters Testamentary will allow you to handle the affairs of the estate, you will not be able to use the Letters Testamentary to collect assets that passed by operation of law outside of the estate. A common example of this is when a decedent had a bank account that was held jointly with rights of survivorship with another person, the funds in that account automatically pass to the surviving joint owner (regardless of what the Will states) and therefore the Executor will not have authority to collect those assets despite having the Letters Testamentary issued to him/her.