New York Probate Lawyer Blog
One aspect of estate settlement is the actual distribution of funds or other items to the ultimate beneficiaries of an estate or trust. As explained in many prior articles in the New York Probate Lawyer Blog there are three main categories involved in administering an estate. Briefly, the first stage involves the appointment of an estate fiduciary such as an executor or administrator. An Executor is appointed when a decedent dies leaving a Last Will and Testament. An Administrator is appointed when a decedent dies intestate without a Last Will.
The second phase of an estate is implementing administrative tasks such as collecting assets, paying debts, taxes and other obligations and finalizing the various aspects of a decedent’s affairs. This would also include selling a decedent’s house or other property, if necessary.
The third and final chapter involves the payment or distribution of assets. Such disposition will be controlled by the terms of a Will or is made in accordance with the statutory estate laws regarding intestate inheritance.
This final phase typically involves the preparation of an accounting which is presented to the ultimate beneficiaries for review. An accounting details all of the transactions made by a fiduciary including assets and income collected and expenses and claims which were paid. An accounting also shows the balance of assets remaining on hand and the proposed distribution to be made to each beneficiary. In most cases the beneficiaries are presented with an informal accounting and requested to execute a Release and Refunding Agreement which basically provides that the beneficiary accepts and consents to the accounting and releases the fiduciary from further liability. In the event a beneficiary objects to any part of the accounting, it may be necessary to have a formal accounting proceeding filed in the Surrogate’s Court which would require formal discovery and a hearing. This procedure is time-consuming and costly. The Release and Refunding Agreement typically contains a provision whereby a beneficiary agrees to refund to the fiduciary amounts which were distributed which exceeded the correct sums the beneficiary was entitled to receive.
The enforcement of this refunding aspect was the subject of a Manhattan estate case entitled In the Matter of Mamdouha S. Bobst decided by Manhattan Surrogate Rita Mella on January 6, 2025. In Bobst a decedent’s Will provided for payment of the probate assets to a separate trust which had been previously established. The trust beneficiaries were a number of charities. The terms of the trust provided that if the estate funds were insufficient to pay the estate debts and expenses, the trustees were required to provide the estate with trust assets to pay these items. At some point, the estate and trust were settled and a distribution was made to the charities. The charities executed a Release and Refunding Agreement. Years later a lawsuit was commenced against the estate which required that the estate defend against the allegations. Therefore, the estate executors sought an Order from the Court requiring the charities to refund to the trust amounts which they had previously received in order to cover the expenses associated with the defense of the lawsuit.
The Court determined that the language of the trust and the Release and Refunding Agreement required the charities to refund to the trust the amounts required to pay for the estate expenses associated with defending the lawsuit.
As can be seen from Bobst, many complications may arise with respect to settling an estate. An experienced estate lawyer may be essential to deal with these matters. I have been representing clients in estate and Surrogate’s Court matters for over 40 years. Do you have a question regarding an estate or trust? Call me now for a free confidential review of your issue. We provide reasonable and flexible fee arrangements and personal representation.
I have been handling estate and Guardianship cases throughout New York City and other counties for the past forty (40) years. Do you have an issue regarding an estate? Call Me Now for a free confidential review of your estate matter. 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 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.