New York Probate Lawyer Blog
A typical estate plan includes a number of commonly recognized documents. First and foremost is a Last Will and Testament. As discussed in many posts in the New York Probate Lawyer Blog, a Will controls the disposition of assets held in a decedent’s name alone. Thus, assets such as joint bank accounts or items which have designated beneficiaries such as retirement accounts and life insurance pass directly to the other named party. The terms of a Will do not control these assets. Therefore, any estate plan should include careful scrutiny as to the title of assets and whether named beneficiaries have been added.
When a person dies, his Will is filed with the Surrogate’s Court along with a petition for probate. When a Will is admitted to probate by the Court, the terms of the Will become effective.
It has become more popular recently to include the creation of a Living Trust as part of an estate plan. Living Trusts are also referred to as grantor or revocable trusts. The basic format of a Living Trust is that assets owned by a person in their names are presently transferred into the trust. Thus, real estate is placed in the name of the trustee of the trust as well as bank accounts and other items. The intention is to put a person’s assets into a Living Trust in order to avoid probate. When a person dies, the terms of the trust can be effectuated expeditiously without having to wait for the probate process to be conducted in the Surrogate’s Court. Also, the Living Trust can have provisions for the management of property if the grantor becomes ill or disabled.
When a trust is created, a Will typically provides that any assets which pass by Will should be paid to the Living Trust for distribution. The disposition provisions in a Will and Trust are usually identical. There is a fallacy that creating a Living Trust and transferring all assets into it avoids all controversy and litigation. The validity of a trust can be challenged like a Will on various grounds such as due execution, lack of capacity, undue influence, fraud and duress. There are procedural differences in the paths to contest the validity of a Will or a Trust. However, the possibility for challenges is clear.
Additionally, when a Will is filed in a Surrogate’s Court, all proceedings regarding the Will typically occur in the filing Court. In the case of a Trust, there may be numerous jurisdictions where lawsuits can be filed. A recent Queens trust case entitled In the Estate of Michael Mosheyev, decided by Queens Surrogate Peter J. Kelly on April 12, 2024, involved litigation concerning a Living Trust. In Mosheyev, a person / grantor, now deceased, created a Living Trust for his children. The trust was signed in Pennsylvania and stated that it was to be construed according to the laws of Pennsylvania.
A guardian for one of the children commenced a proceeding in the Queens Surrogate’s Court seeking the removal of the trustees, an accounting, and other relief. The Court analyzed various rules regarding such litigation and noted that while Pennsylvania law controlled substantive trust issues, New York procedural law controlled other matters. In this instance, the Court recognized that it had jurisdiction over the case pursuant to SCPA §207(1) entitled “Lifetime trusts; jurisdiction and venue” since the trust held assets in New York and the trustees were located in New York. Additionally, the Court was able to apply Pennsylvania law as to other assertions seeking the dismissal of the proceeding. The Court found that the matter should not be dismissed and denied all applications for dismissal.
As can be seen from Mosheyev, a living trust can be enmeshed in litigation and the application of laws from multiple jurisdictions may be involved. Do you have a question regarding a Living Trust, Will or an estate? Call Me Now for a free confidential review of your issue. I have been handling estate and guardianship matters for over (40) years. We offer reasonable and flexible fee arrangements and personal representation.
New York Trusts and Estates Attorney Jules Martin Haas has helped many clients over the past 40 years resolve issues relating to guardianship and probate and estate settlement throughout New York City including the Bronx, Queens, Brooklyn, Manhattan, Nassau and Suffolk County. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial free consultation.