Articles Posted in Estate Administration

There are various types of fiduciary appointments granted by the New York State Surrogate’s Court.  The Court may appoint an Executor and issue Letters Testamentary.  This occurs in connection with the probate of a Last Will and Testament.  If the decedent dies intestate, the Court appoints an Administrator and issues Letters of Administration.  The New York Probate Lawyer Blog has published many articles discussing the probate and administration process.

Sometimes when the Court proceedings for the probate of a Will or an intestate administration proceeding is delayed, the Surrogate might appoint a Preliminary Executor or Temporary Administrator.  This may occur where there is a Will Contest or Kinship cannot be determined without a kinship hearing.

An important aspect of any fiduciary appointment is the extent of powers granted to the fiduciary by the Court.  Essentially, the fiduciary can only perform those functions which the Court or the estate laws allow.  Estates, Powers and Trusts Law Section 11-1.1 entitled “Fiduciaries’ powers” lists many types of authority which an Administrator or Executor might possess, such as the power to sell assets, invest assets, pay expenses, collect income and engage in litigation on behalf of an estate.  However, in many instances, the Court Decree appointing the fiduciary may restrict or limit the authority.

During the course of estate administration, the beneficiaries of an estate may need to wait many months or even years before their beneficial interests are paid.  In many instances a lengthy delay may cause a hardship to a beneficiary, especially when the beneficiary was dependent upon the decedent for support or the decedent’s death impacted the financial stability of the beneficiary.

In many cases of estate administration, the executor or administrator or preliminary appointee may voluntarily make an advance distribution to a person who is in need.  This tends to be a common occurrence when all of the interested parties are cooperative and there is no contentious estate litigation occurring.  However, when a fiduciary refuses to help a beneficiary who is in need, the Surrogate’s Court Procedure Act provides a procedure whereby an application can be made to the Court for an advance distribution.

SCPA 2102 entitled “Proceedings for relief against a fiduciary” contains a paragraph 5 which allows the commencement of a proceeding to force the payment in advance of an estate share when the estate “exceeds by at least one-third” the sum needed to pay other claims, debts and legacies.  The applicant must demonstrate that such payment is required for his education or support for him or his family.  This statute gives parties interested in an estate an important right to maintain financial stability during a long period of estate settlement.

A person who is a New York domiciliary typically has his estate administrated in the County Surrogate’s Court where he maintained his home.  Domicile is a person’s primary home as opposed to numerous residences which may be used.

Whether a New York decedent has a probate estate or dies intestate without a Will, primary estate proceedings are filed in New York.  However, it is not uncommon for a decedent to own various forms of property outside of New York.  Administering such assets may be complicated and challenging.

Where an administrator or executor is appointed in New York, such fiduciary generally has the authority to access and collect all of the decedent’s personal property.  For example, the New York executor should have no problem collecting bank accounts or other similar assets that are held in financial institutions in different states such as California.  These institutions may require certain forms and certified documents to be presented but will recognize the authority of the New York fiduciary to close and collect accounts.

A fiduciary is defined in Section 103(21) of the Surrogate’s Court Procedure Act (SCPA) as including an executor, administrator and trustee.  These fiduciaries have various obligations with regard to carrying out their duties and obligations.  To begin with, statutes such as Estates, Powers and Trusts Law (EPTL) section 11-1.1 entitled “Fiduciaries: Powers, Duties and Limitations” lists many of the powers that are granted to a fiduciary to use when administering an estate or a trust.

In addition to statutory powers, the document that defines the tasks which a fiduciary is responsible for completing, such as a Last Will and Testament or Trust, can provide additional powers or specific directions as to certain matters.

There are many occasions in which a fiduciary must exercise his judgment and make decisions regarding various matters.  For example, it may be necessary to sell estate or trust property and the fiduciary must decide whether the sales price is fair and appropriate.  In other situations, the administrator or executor must determine whether a certain investment should be made or whether a discretionary distribution from a trust to a beneficiary should occur and the amount of the payment.  In these cases, the fiduciary must act properly or else he will have breached his fiduciary duty.  A breach of fiduciary duty may result in the fiduciary being removed or even held personally responsible for financial damages in the form of a surcharge.  The New York Probate Lawyer Blog has published many articles regarding estate settlement and administration issues.  These matters often result in estate litigation or trust litigation.

The New York Court system contains a number of different Courts. For instance, in New York City there is the New York City Civil Court, the Family Court, the State Supreme Court, the Appellate Term and the Appellate Division. Additionally, each County has a separate Surrogate’s Court.

The Surrogate’s Court deals with the issues relating to a decedent’s estate. When a person dies leaving a Last Will and Testament, a probate proceeding is filed in the Surrogate’s Court. If the person dies intestate (without a Will), a petition for Letters of Administration would also be filed in the same Court.

All additional proceedings that may relate to estate matters are also filed in this Court. The jurisdiction of the Court is fairly broad. So various matters concerning kinship determination, Will Contests, Accounting Proceedings, Will construction proceedings and various disputes concerning claims and property interests relating to a decedent are typically determined by the Surrogate.

The Surrogate’s Court in New York is the judicial forum that appoints Executors and Administrators of an estate.

When a person dies and leaves a Last Will and Testament, the usual process is to appoint an Executor. The person who is to act as the Executor is named in the Will. Often a Successor Executor is also named.

The probate process requires that a petition for probate be completed and filed with the Court. This petition is usually completed and presented by the nominated Executor and requests that the Court admit the Will to probate. It also seeks to have Letters Testamentary issued to the petitioner.

Among the many fiduciary duties that an Executor or Administrator must perform is the duty to locate and collect estate assets.  There are a variety of assets which include bank accounts, security accounts, retirement funds, business interests, life insurance, annuities and real estate.   In New York, along with real property such as a single family home, a decedent may own a cooperative apartment or a condominium unit.

The job of the fiduciary is to collect these assets and ultimately distribute them or their proceeds to the estate beneficiaries.   In most instances it is fairly easy to identify and collect funds particularly when they are held in bank accounts or other financial institutions in the name of the decedent.  The New York Probate Lawyer Blog has devoted numerous blog posts to asset collection and estate settlement.

However, there are occasions when identifying and collecting estate assets can present difficulties.  An interesting example of a problematic situation was discussed in a Manhattan estate case entitled Matter of Estate of Solano.  This case was decided by Manhattan Surrogate Nora Anderson on September 30, 2019.  In Solano, the decedent had purchased an interest in her cooperative apartment which was one of the Mitchell-Lama program cooperatives.  Under this program the purchaser paid a small initial price and, upon death, the owner’s estate was only entitled to receive back the value of the owner’s initial investment.