The situation where a foreigner dies and has left jewelry or expensive property in New York is more common than someone would think. How does the family retrieve these items? Can they just book a flight to NY, grab the items and fly back?
We recently had a case where a Mexico national died with millions of dollars in diamonds and rare jewelry pieces located in a safety deposit box in New York. The decedent died over 30 years ago, and no one knew about these assets until a letter came in the mail. The bank that opened the safety deposit box 30 years ago and kept it in their warehouse all that time, sent a notice to the only living heir stating that the contents of the box will be sold at an auction if she did not claim them by a certain date. The bank would not disclose what the contents of the box were, although they had already had the items appraised and ready to be sold at auction. The client had to take a huge leap of faith and proceed with the legal process not knowing what opening the box would reveal. We notified the bank immediately that we are claiming the box and asked for an extension of the deadline. An extension here was necessary because cases with foreign beneficiaries take longer since documents have to be apostilled and mailed to the US.
So, back to the question of whether the family can fly into New York, grab the assets and fly back? The answer is not really. To claim jewelry and expensive personal property located in New York that belong to a foreign decedent, there are several steps in the estate legal process.
Step 1 – Where are the NY Assets Belonging to a Foreigner Located?
The first question is about location. Where is the jewelry or artwork located? Is it inside an apartment that was rented or owned by the decedent, a storage unit, or a safety deposit box?
New York law does not allow anyone to access an apartment, storage unit or safety deposit box of a decedent without a court order. The only other way to get access is if an estate executor or administrator has already been appointed.
Step 2 – What are the NY Assets that Belong to a Foreigner?
The second query is to determine what the assets are. Let’s say the assets are a combination of known and unknown. You know the decedent has $50,000 in a Chase bank account (known asset). The decedent also has a storage unit. The contents that are inside are unknown.The unit is not an asset in itself; it’s what is inside the unit that matters. In this situation, you can skip getting a court order to search the unit and go straight to opening an estate in New York. By opening an estate, the administrator or executor can claim the $50,000 and has authority to search the storage unit.
In our Mexican national case, the decedent had no real estate or bank accounts in New York. The only item that could have possibly contained assets was a safety deposit box held by a New York bank. What that box held was a big mystery; no one knew except the bank and they were not disclosing this information.
NY Surrogate’s Court will not allow for an estate to be opened where the only “asset” is a safety deposit box. The court required a search of the box first to determine whether there were actual assets inside the box that required administration by opening of an estate. Obtaining a court order was the only option. Our law firm obtained a court order and searched the box. Thankfully for the family, the box revealed rare jewels. If the box was empty or the contents were valueless, then no further steps would be needed. But, being that the jewels were of significant value, we had to proceed to the next step of opening an estate to claim the contents.
Be aware that a court order allowing to search a box, a home, or a storage unit, only allows a search, nothing else. Items cannot be removed and taken home. The only papers that can be removed are a will, life insurance policy or a burial plot.
During the search of the safety deposit box, a bank representative goes through the box with the estate agent and lists each item on a paper called the inventory. If for example, there’s $20,000 cash inside the box, then the people in the room will count it out and write it on the inventory “$20,000 in cash.” This could take several hours depending on how many items are in the box. After the search is over, contents are put back inside the safety deposit box and the box is returned to its storing place. To claim the contents and take them home or sell them, the bank will say to come back when the estate is open and a personal representative is appointed.
In summary, if there are no known assets and the only possible assets are inside a storage unit, safety deposit box or a premises, just like with our Mexican national client, then court order is necessary to do a search. Once the search is complete and you find valuable assets, then proceed to Step 3 which is opening an estate in New York.
Step 3 – Opening an Estate for a Foreigner with NY Assets
Opening an estate for a foreign person with assets in New York is a complicated process. The preliminary question is whether an estate proceeding was opened in the home country. If an estate already exists in a different country, then an ancillary probate or administration must be opened in New York. The court will require the complete record from the foreign country – which has to be court certified and apostilled. New York State must be notified that an estate is being filed and the tax department must provide their consent.
When a foreign decedent is involved, it usually means the beneficiaries are also foreign. This creates a problem since New York Surrogate’s Court requires that the personal representative over the estate be a US citizen or a US permanent resident aka greencard holder. If for example, Jack lives in Columbia and dies there, his only child and next of kin, Anna, cannot be the administrator or executor of his estate in New York because she is a Colombian national. Anna has to find a US person to serve in this estate in order to distribute NY assets to her. Many times this is not possible since the foreign beneficiary may not know anyone in the US or if they do, that US person does not want this responsibility of taking care of a stranger’s estate. So what can be done? The beneficiary can ask that the NY estate lawyer serve as the administrator over the estate. At Mishiyeva Law, PLLC, we often serve as administrators and executors over a foreigner’s estate or when the beneficiaries are all foreign and cannot serve themselves.
When assets of a foreigner are collected, a tax return will likely need to be filed with the IRS depending on the total value of the estate. The law concerning a foreign decedent dying with assets in NY can be complicated and must be carefully followed so no taxes are owed later when the assets are already distributed.
Step 4 – Filing Estate Tax Return for a Foreigner with NY Assets
When the estate consists of non-cash items such artwork and jewelry, to determine whether estate tax is due and how much, the property has to be sold or appraised by professionals. In our Mexican national case, the items were sold by an auction house and the sale proceeds were distributed to the foreign beneficiary. However, before funds could be released, federal taxes had to be paid. In order to determine the value of the estate for a foreigner decedent where the property is coins, jewelry, or artwork, the appraisal has to say what was the value of the items at the time of death, not what they sold for at auction. In the ordinary course of inflation, things appreciate with time. For example, a coin collection that was worth $5500 in 1997, was sold by our office acting as estate administrator for $36,000 in 2024. For estate taxes, the 1997 value was relevant for determining how much tax was due.
Contact Us
If you are a foreign beneficiary or your foreign family member died with assets in NY, call us for a consultation. Probate law is complicated and must be handled by an estate law firm that specializes in such matters or the estate can linger in court for years. Our number is 646-233-0826.
