New York Probate Lawyer Blog

October 18, 2024

New York Compulsory Accounting – Additional Considerations

The New York Probate Lawyer Blog has published numerous articles concerning all aspects of probate, administration and Surrogate’s Court and estate matters. Most recently, an article was published on October 8, 2024 entitled “A Compulsory Accounting May Be Required for the Best Interests of an Estate”, which discussed the consideration by the Court of a compulsory accounting in the context of the best interests of an estate. As a recap, estate fiduciaries such as an executor or administrator are required to provide estate beneficiaries with an accounting of their fiduciary activities. An accounting is comprised of numerous schedules which contain itemized and detailed descriptions of the financial activities which took place during the course of the administration of a trust or an estate. These various schedules include lists and values of the assets received, income received, investments that were made, expenditures which were made and a statement of the balance of assets remaining on hand. There is also a schedule showing a computation of fiduciary commissions.

In cases where a fiduciary is not providing information to beneficiaries, a compulsory accounting proceeding can be filed with the Surrogate’s Court to request that the Court direct a fiduciary to file an accounting. Surrogate’s Court Procedure Act Section 2205 entitled “Compulsory account and related relief on a court’s own initiative or on petition; who may petition” and Section 2206 entitled “Compulsory account and related relief; proceedings thereupon” provide the provisions for implementing this procedure.

I recently had occasion in a Manhattan estate to file a petition for a client to obtain a compulsory accounting. The petitioner was the surviving spouse of a decedent. Since the petitioner was not named as a beneficiary in the decedent’s Last Will and Testament, a spousal right of election was filed with the Court. A right of election is provided for under Estates Powers and Trusts Law Section 5-1.1-A entitled “A Right of election by surviving spouse”. This statute allows a surviving spouse to receive one-third (1/3) of a decedent’s net estate.

October 9, 2024

A Compulsory Accounting May Be Required for the Best Interests of an Estate

by Jules M. Haas

As previously discussed in this blog, there are many instances in which the Surrogate’s Court may appoint a fiduciary. Surrogate’s Court Procedure Act (SCPA) Section 103(21) includes among its definition of “fiduciary” an administrator, temporary administrator, executor, preliminary executor, and testamentary trustee. The New York Probate Lawyer Blog has published many articles regarding the appointment and responsibilities of a fiduciary.

The SCPA and the Estates, Powers and Trusts Law (EPTL) contain many provisions regarding the duties and obligations of fiduciaries. For example, EPTL Section 11-1.1 entitled “Fiduciaries’ powers” sets forth numerous powers granted to a fiduciary, such as investing or selling assets, paying expenses and making distributions. Also, a fiduciary is required to act fairly and not take personal advantage or engage in self-dealing. Beneficiaries are to be treated equally subject to the terms of the appointing documents, such as a Last Will or Trust. If a fiduciary acts improperly he may be found to have breached his fiduciary duty and be subject to a surcharge for improper conduct.

As part of his duties, a fiduciary is required to provide beneficiaries with an accounting of his activities. This accounting is in the form of a financial statement setting forth all of the items and matters which have taken place during the course of a fiduciary’s tenure. In most instances, an executor or administrator or trustee will voluntarily provide beneficiaries with an accounting. However, if a fiduciary fails to do so, SCPA 2205 entitled “Compulsory account and related relief on a court’s own initiative or on petition; who may petition” provides the process to require that an accounting be filed by a fiduciary with the Court. Even though a fiduciary has a duty to account, the Court will only compel an accounting if it is in the estate’s best interest. Of course, determining best interest is subject to the particular facts in each case. This issue was recently reviewed in a Manhattan estate case entitled Matter of Michael, decided by Manhattan Surrogate Hilary Gingold on September 19, 2024. In Michael, a contingent beneficiary of a testamentary trust filed a petition for a compulsory accounting. After reviewing the terms of the Will in which the trust was created and the activities of the trust, the Court declined to granted the petition. The Surrogate noted that the entire trust had been previously distributed to the primary beneficiary in accordance with trustees’ absolute authority and that the petitioner had no interest in the trust due to petitioner’s contingent interest. Additionally, the trustees had voluntarily provided the petitioner with a great amount of financial accounting information. The Court found that it would not be in the trust’s best interest to expend the time and expense to engage in an accounting proceeding under these circumstances.

October 7, 2024

Removal of a Fiduciary Requires Specific Facts

by Jules M. Haas

There are numerous occasions where the Surrogate’s Court appoints a fiduciary to oversee an estate or a trust. With regard to an estate, the Court may need to appoint an executor or a preliminary executor in the case of a probate proceeding. If a decedent dies intestate, it may be necessary to appoint an administrator or temporary administrator.

In addition to the above fiduciaries, the Court may have occasion to appoint a testamentary trustee for a trust created in a Last Will. Also, the Court may obtain jurisdiction over trustees who are appointed in a Living Trust.

The Court always gives deference to trustees and executors who have been designated by a decedent or a person who has created a trust. This is because the Courts view such appointment as furthering the interests or intentions of the person who made the appointment.

September 13, 2024

New York Guardianship Cases May Involve Litigation

by Jules M. Haas

Article 81 of the New York Mental Hygiene Law contains the provisions for the appointment of a Guardian. Guardianship can involve an appointment for personal needs such as health care or living environment. There is also a Guardianship for property management which concerns a person’s financial affairs. The New York Probate Lawyer Blog contains many posts relating to Guardianships.

As has been discussed in earlier blogs, MHL Section 81.02 provides that a Guardian may be appointed when or if it is found to be necessary for personal needs or property management and that a person is incapacitated. This means that the alleged incapacitated person (“AIP”) will suffer harm because they cannot understand and appreciate the consequences and nature of their disability.

Many Guardianship cases are relatively uncomplicated in that the AIP is clearly unable to handle his affairs and that a failure to appointed a Guardian would pose a risk to the personal and/or financial needs of the person. For example, a person who is paralyzed due to a stroke is in need of assistance. Nevertheless, there are many cases where litigation and conflict arise. The imposition of a Guardian requires the presentation of clear and convincing evidence (MHL Section 81.02(b)).

September 9, 2024

Various Issues and Problems Which May Arise in New York Estate Settlement

by Jules M. Haas

New York estate settlement often involves many different issues and concerns. In the first instance, after a person’s death, there is a need for the appointment of an executor or administrator. The procedure which needs to be followed in the Surrogate’s Court is determined by whether a decedent had a Last Will and Testament. If a Will is located, then it is filed with the Court to commence the probate process. When a Will cannot be located, then a proceeding for intestate administration must be utilized. The New York Probate Lawyer Blog has published many other articles concerning probate and also the administration of an intestate estate.

Once a fiduciary is appointed, there are a number of tasks and responsibilities which need to be undertaken. It is imperative to ascertain the full nature and extent of a decedent’s assets. Many times, the identity of assets is not clear or may not be easily obtained. Records of accounts may be available among a decedent’s physical records. However, it is prevalent today for many assets and asset information to be stored only in a digital format. If passwords are unknown, an estate fiduciary could be severely limited in his ability to identify and collect these items.

A recent Manhattan estate case entitled Petition of Terence M. Healy, decided by Manhattan Surrogate Hillary Gingold on August 8, 2014, involved a request by an estate administrator to access a decedent’s information which was held under the Apple User ID and stored in the decedent’s iPhone and MacBook. In this proceeding, Apple did not interpose any objection to the Court petition. The Surrogate allowed the estate administrator to obtain access to the digital information to ascertain asset information and other personal information of the decedent.

August 27, 2024

The Appointment of a Preliminary Executor Should Reflect a Decedent’s Intent

by Jules M. Haas

The function of estate planning in New York is to provide documents which reflect the intentions of the creator. Estate planning is a broad topic which in general may encompass many types of objectives. In its purest form, an estate plan consists of a Last Will and Testament. In addition, planning may also result in the establishment of a Revocable or Living Trust. This document contains similar post-death provisions but is implemented with the goal to avoid the probate process. A revocable or living trust also usually contains pre-death directions for asset management in the event of circumstances such as the creator’s incapacity.

Other aspects of planning may include advance directive papers such as a Health Care Proxy, Living Will and Durable Power of Attorney. In certain instances, a Medicaid plan may be appropriate which might include pre-death transfer of assets.

The important point is that all planning allows a person to memorialize his intensions regarding his assets and personal affairs, and the selection of executors, trustees, and agents which may be named and nominated in the papers. Courts are very sensitive to a person’s selection of executors and trustees. In particular, the nomination of an executor in a Will may take on paramount importance in many cases where the appointment of a preliminary executor is needed for immediate estate administration.

August 14, 2024

Landlord-Tenant Eviction Proceedings Require the Appointment of an Estate Representative

by Jules M. Haas

The death of an individual creates many diverse issues. As discussed in numerous posts in the New York Probate Lawyer Blog, an initial determination must be made as to whether a decedent died with a Last Will and Testament or was intestate. The existence of a Will requires the commencement of a probate proceeding in the Surrogate’s Court. This proceeding is typically filed by the nominated Executor. The relief sought is to have the Will validated by the Court and Letters Testamentary issued to the Executor. If there are delays expected in probating a Will, an application can be made for the appointment of a Preliminary Executor.

When there is no Will, a petition should be filed to obtain Letters of Administration. Surrogate’s Court Procedure Act Section 1001 entitled “Order of priority for granting letters of administration” provides the priority of persons entitled to be appointed as Administrator. Estates Powers and Trusts Law Section 4-1.1 entitled “Descent and distribution of a decedent’s estate” provides which heirs are entitled to inherit the estate.

Of course, many issues arise concerning a decedent and an estate. A duly appointed Executor or Administrator is essential in order to solve these matters and settle the estate. One area which is a very common source of problems relates to a decedent’s residence. If a decedent was a tenant in a property, the immediate question arises as to what becomes of the decedent’s apartment. In many metropolitan areas, such as New York City, there are a multitude of tenancy situations. A decedent may have had a lease which is subject to rent regulations such as rent stabilization or rent control. There are situations when a tenancy is not subject to any rent controls or when occupancy of an apartment is not subject to any lease at all. Particularly when an apartment is subject to rent regulation, a landlord will be eager, and many times act aggressively, to obtain control over the apartment in the hope of obtaining a higher rent from a new tenant after the decedent’s vacancy.

July 31, 2024

The Surrogate’s Court Will Act in the Best Interests of an Estate to Appoint Administrators

by Jules M. Haas

One of the primary reasons for implementing an estate plan is to afford a person the opportunity to select or nominate estate fiduciaries. When one thinks about planning an estate, the initial considerations regarding the creation of a Last Will and Testament or a Revocable Trust are the beneficial provisions concerning the disposition of assets. Of course, while selecting beneficiaries and alternate beneficiaries, as well as the assets or shares they are to receive, is a prominent aspect of any plan; it is also essential that sufficient consideration be given to the selection of fiduciaries. Fiduciaries may be executors, trustees or guardians for minors.

The nomination of a fiduciary is important since the creator of the document is placing his trust in a named person or persons to administer an estate or trust and to put into effect the creator’s intentions. Executors and trustees may need to serve for long periods of time and may need to confront and resolve many complex issues affecting an estate or trust ranging from taxes, creditors’ claims, and other sorts of litigation.

When a decedent does not leave a Will, the selection of an intestate estate administrator is left to the determination of the Surrogate’s Court by application of the estate laws. In particular, Surrogate’s Court Procedure Act Section 1001 entitled “Order of priority for granting letters of administration” provides a list of persons who have priority in being appointed as the estate administrator. The New York Probate Lawyer Blog has published numerous articles concerning the appointment of estate administrators and estate settlement.

July 19, 2024

Administration of a New York Estate May Include Digital Assets

by Jules M. Haas

After a person dies, it may be necessary to administer his estate. Of course, the creation of comprehensive estate planning can facilitate post-death matters. A complete estate plan may include a Last Will and Testament, Living Will, Health Care Proxy, Durable Power of Attorney, and a Living Trust. The New York Probate Lawyer Blog contains many articles concerning estate planning and estate settlement.

A decedent’s assets may be comprised of items which are held in a decedent’s name and which pass under a Will. Other assets such as life insurance or retirement accounts can have designated beneficiaries. Still other assets such as joint accounts, may pass to a surviving owner automatically upon death. In all of these situations, it will be necessary for an executor or administrator or beneficiary to locate and ascertain the assets in which a decedent held an interest at the time of death.

Finalizing and collecting a decedent’s assets may, at times, be very difficult. If a survivor or a fiduciary has access to a decedent’s financial records, such as bank or brokerage statements, the job to determine assets may be simplified. Additionally, asset information may be obtained by examining a decedent’s tax returns. As to real estate, there may be internet listings or access to the locally filed real estate records. In New York City, real estate records can be accessed through the ACRIS (Automated City Register Information System) online search system. Mail delivered to a decedent’s residence may also be a source for asset information.

July 2, 2024

Objections to a Fiduciary Accounting Cannot Be Conclusory

by Jules M. Haas

The settlement of a New York estate is comprised of a number of stages. At the outset, a determination must be made as to whether a decedent had a Last Will and Testament or died intestate. This is important since the procedures to obtain Letters Testamentary in a probate proceeding, or Letters of Administration in an intestate administration proceeding, are different. While this initial process appears uncomplicated, there are many cases where the determination as to whether a decedent left a Last Will to be probated is unclear.

First and foremost, a search needs to be performed to locate the original Will. It may be that the document, if there is one, was retained by a decedent at home or with an attorney. Sometimes, the only paper to be found is a copy of a Will. This presents problems since it is very difficult to probate a copy of a Will. Surrogate’s Court Procedure Act Section 1407 entitled “Proof of lost or destroyed will” contains specific rules regarding the probate of Wills which are lost.

Assuming that the issue regarding the appointment of an executor or administrator is resolved, the actual day-to-day management of the estate needs to be accomplished. In this regard, assets need to be identified and collected. Also, estate debts, claims and taxes must be dealt with and satisfied. Depending upon the estate, some assets may present complicated issues, particularly where a decedent had various business or other valuable interests. Valuation issues may arise if the estate is subject to Federal or New York State estate tax. The New York Probate Lawyer Blog has published numerous articles concerning estate settlement.