Q: Adding a promissory note to a small estate.
My husband, “T” of NY, lent his brother, “J” of MI, $45000 in ‘08. A 10 yr unsecured promissory note was drawn by the atty that settled their parents’ estate. The note was for T’s share. Only J signed. Per the note, J was to pay $2K in interest over 10 yrs plus $1500/yr. In 8/18 the balance was due. If J sold a certain piece of property (detailed in the note) before 8/18 he was to pay the balance from the proceeds immediately. J paid the $2K and the $1500 annually. In 8/18 J did NOT pay the balance but has cont’d to pay $1500/yr. T died in 2/21. I created a small estate to get title of his truck, worth $5K. I did that w/o an atty. The Surrogate Clerk said I could add the note (balance $25,500) but might need an atty as “promissory notes are different”. Is this true or can I follow the same steps as w/ the truck? Is adding the note to the small estate even the appropriate thing to do? In 7/23 I asked J to pay the balance. He refused and did not send this yr’s $1500. Thank you.
A:
Handling a promissory note in a small estate is indeed different from transferring a title for a vehicle. The note, especially with an outstanding balance, is considered an asset of the estate and should be included. Since your late husband was owed the balance at the time of his passing, this debt becomes part of his estate. Adding the note to the estate is appropriate and necessary for proper administration.
However, the process can be more complex than handling tangible assets like a truck. It may involve legal actions to enforce the note, especially given the borrower's refusal to pay. Given these complexities and the potential need for enforcement, consulting with an attorney experienced in estate administration is advisable. They can guide you through the process and help ensure the estate's interests are protected.
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