Estate Administration

July 17, 2013

New York Surrogate’s Court Has Authority to Evict Occupants of Estate and Trust Property

The administration of a decedent’s estate is primarily under the authority of the New York Surrogate’s Court. These courts also supervise testamentary trusts and, in many cases, inter vivos trusts, as well. A testamentary trust is a trust that is created by a decedent’s Last Will.

As can be imagined, there are many diverse issues that a decedent’s estate may be involved with. For example, the decedent may have been the owner of a business. There can be issues and disputes concerning the business operations that a rise after death.

Additionally, matters concerning the determination and collection of assets and controversies regarding a decedent’s debts and obligations are all part of the multitude of issues that the Surrogate’s Court can be called upon to determine.

The jurisdiction of the Court to review issues that affect an estate is very broad and sometimes it is surprising that the Surrogate’s Court has authority to rule on a particular controversy. One such area that falls into this category is summary eviction proceedings. In most localities in New York, there are specifically designated Courts in which landlord-tenant matters and evictions are heard. In New York City, each of the counties, such as Queens and Brooklyn, have landlord-tenant parts in the New York City Civil Court.

It is very common that when a person dies owning real estate such property is occupied by third parties. The occupant may be an unrelated tenant or even a family member who was living at the property with the decedent or otherwise with the decedent’s consent. There are many cases where a decedent may have allowed a relative to live in a house for decades. However, after a person dies, if the real estate is titled in the decedent’s name alone, the property may become part of the decedent’s estate and its sale may be necessary to pay estate bills, a mortgage or to distribute the property value amongst numerous estate beneficiaries.

Problems arise when the occupant refuses to vacate the property. The fiduciary, who has the responsibility to manage the property, is then faced with the task of having to evict the occupant so that estate or trust affairs can be taken care of. In these cases the first thought might be to file a petition in the local landlord-tenant Court. However, the Surrogate’s Courts have acknowledged that the eviction proceeding can be commenced in such Court since the matter affects the administration of the estate or trust affairs.

A recent case entitled Matter of Katherine Boyer decided by Surrogate James Pagones (Surrogate’s Court, Dutchess County) on June 7, 2013 and reported in the New York Law Journal on June 14, 2013, addressed this very issue. In Boyer, a property owned by the decedent was transferred under the decedent’s Last Will to the trustees of a testamentary trust. The trustees brought a proceeding in the Surrogate’s Court seeking the eviction of the occupant who was living in the property. The Court found that the property was owned by the trust and also issued a warrant of eviction against the occupant.

June 12, 2013

New York Estates May Require That a Bond Be Filed with the Surrogate’s Court

by Jules M. Haas

There are two fundamental procedural avenues that are followed when initiating proceedings in the Surrogate’s Court to administer a decedent’s estate. If the person died testate (having left a Last Will), the proceedings concern the Probate of the purported Will. If the person died intestate (without a Will), the proceedings are determined to be an Administration of the estate.

It is fairly common that a fiduciary or beneficiary of an estate may receive information that the fiduciary must be bonded or receive a bond in order to complete his appointment by the Surrogate’s. Court. The bonding requirement of an Executor (when a Will is probated) or an Administrator (in an intestate estate) is not as mysterious as it may sound.

A bond is essentially an insurance policy issued by a surety company that provides security for the estate assets. If the fiduciary misappropriates or improperly takes estate assets, the bonding company may be required to reimburse the estate for the loss and, in turn, try to recover the lost assets from the fiduciary.

In view of the financial risk that a surety incurs by issuing a bond to a fiduciary, the surety company will require that the fiduciary have a solid financial and credit background. I have been involved in a number of matters where a person was approved by the Surrogate’s Court to act as an Executor or Administrator only to be rejected by the bonding company. If the prospective fiduciary cannot obtain the bond required by the Court, he most likely would need to forfeit his appointment in favor or an alternate fiduciary who can satisfy the bonding company.

The amount of the bond required by the Court depends upon many factors. Primarily, the value of the decedent’s estate is the starting point. The greater the value of the assets, the larger the required bond. The bonding company will charge the estate an annual premium for the cost of the bond. The larger the amount of the bond, the larger the premium cost.

It is not uncommon to see standard language in a Last Will to the effect that the requirement of obtaining a bond by the Executor is waived. In most probate matters, the Court does not require the posting of a bond. However, there are a number of situations where even in probate proceedings the Court may require that a bond be filed with the Court as a condition to the fiduciary’s appointment. For example, if the Court is asked to issue Preliminary Letters Testamentary, Surrogate’s Court Procedure Act (SCPA) Section 1412(5) gives the Court discretion to require a bond.

The appointment of an Administrator in an intestate estate usually requires the filing of a bond (SCPA 805), although the filing can sometimes be avoided if all of the estate beneficiaries agree that the filing be dispensed with.

After Estate Settlement has been completed, the fiduciary is required to make a final distribution of estate assets to estate beneficiaries. When all beneficiaries have signed a Release Form or the Court has issued a Decree settling the fiduciary’s Accounting, the bond will be terminated.

I have represented many fiduciaries who have been required by the Court to obtain a Surety Bond. New York Estate Attorneys typically contact various agencies that act as brokers in connection with the Bond Application Process. Since it is not always easy for persons to qualify for a bond, it is a good idea to speak with a bonding company before papers or Petitions are submitted for Probate or Intestate Administration to get a preliminary determination as to whether the person applying to be appointed as a fiduciary can qualify for a bond required by the Court. I work closely with my clients in all aspects of estate administration and assist them with their bond applications.

May 1, 2013

New York Issues Regarding Kinship and Domicile Are Always Important

by Jules M. Haas

The New York Probate Lawyer Blog has provided a number of posts regarding the importance of determining kinship in estate proceedings. Other posts have discussed the necessity of determining a person’s domicile in estate matters. This blog contains same basic points as a reminder of the necessity to properly consider both these issues in estate matters.

With regard to kinship, many estate proceedings in the New York Surrogate’s Court require that a person’s distributees (i.e., next of kin) be fully determined and reported to the Court. Both Administration and Probate proceedings require that proper notice be given to such individuals. In administration proceedings, where a person dies Intestate (i.e., without a Last Will), the decedent’s distributees are the ones who will inherit the estate and who can be named as Estate Administrators. Section 4-1.1 of the New York Estates, Powers and Trusts Law provides the order of priority of persons who can inherit the estate in the case of intestacy.

When the distributees of a decedent are not fully known or when the closest living relatives are more distant such as in Cousin Cases, the Court can require a Kinship Proceeding or hearing to determine the appropriate next of kin. Finding a person’s kinship history is not always easy, especially when families have been separated for many years throughout the USA or the world. Obtaining the assistance of an experienced New York Probate Attorney and genealogist can be vital in these matters in order to secure a person’s inheritance. While not a matter for the probate court, a recent controversy regarding the identity of the relatives of the late gangster, Al Capone, shows the confusion and uncertainty that can surround proving the members of a decedent’s family.

As reported at TMZ.com on April 17, 2013, Reelz Channel is planning a new reality show entitled “The Capones”. However, a person named “Chris K. Capone”, who claims to the gangster’s grandson, has asserted that the show’s star “Dominic Capone” is not related to the deceased, Al Capone. As can be seen, family histories can become complicated and certainly difficult to prove without qualified assistance.

Turning to the issue of domicile, it has been discussed that the concept of domicile is determining the jurisdiction where a person intends that his primary home is located. Someone can have many residences in different states and countries but only one domicile. A person’s domicile typically determines the jurisdictional law that applies to a person’s Estate. For example, if a person is domiciled in New York, New York Estate law will be applied to identify the persons who are entitled to inherit from the estate. Additionally, marital rights may be found by looking at the applicable local law. The imposition of local Estate Taxes is another area where domicile is a determining factor.

In today’s mobile society where individuals can change their residence frequently and also have multiple residences, figuring out a decedent’s domicile and the applicable laws is not always easy. In a recent case, Estate of Vincent Hart, decided by Nassau County Surrogate Edward McCarty III, on April 12, 2013 and reported in the New York Law Journal on April 30, 2013, the Court was faced with a slightly different problem. The issue presented was whether the Surrogate’s Court or the Superior Court in Puerto Rico was the most appropriate Court to determine issues regarding a New York Will and a New York Trust. After balancing the equities, the Court determined that most of the substantive issues, which involved New York law, should be determined by the New York Court. As can be seen from the Hart case, multi-jurisdictional Estate Litigation issues can be quite complex and complicate the Estate Settlement process.

March 20, 2013

New York Real Estate Litigation May Involve a Decedent’s Estate Interest

by Jules M. Haas

New York Estates and Trusts are comprised of various types of assets. Very often these assets include real estate in the form of a single family home or commercial property. When an Executor, Administrator or Trustee has the responsibility of protecting and handling real estate interests, the job of the Fiduciary can become very complicated.

In the most simple case, the Fiduciary must protect the property which means the real estate must be secured and it should be covered by insurance, if possible. Additionally, the property may contain tenants or third-party occupants whose identity must be determined along with any leases or rights of possession such occupants may have. In many instances it will be impractical to distribute the estate without selling the real property. The decedent’s Last Will or Intestate Distribution may require that many individuals receive a share of the property value which cannot be accomplished without liquidating the property into cash funds.

Also, the property may be subject to a mortgage or other liens or expenses that necessitate its sale in order that these debts or obligations be paid. Another consideration is the cost of maintaining the property and paying maintenance fees or property taxes. Such costs may require that the real property be sold rather than requiring the decedent’s estate to pay these continuing costs.

When dealing with real estate an estate may also become involved in litigation that affects the property. New York Estate Lawyers often have to represent their Fiduciary clients in connection with this type of Estate Litigation. A recent case decided by the New York Court of Appeals is an example of the problems an estate can face with Real Estate Litigation. White v. Farrell was decided by the Court of Appeals on March 21, 2013 and reported in the New York Law Journal on March 22, 2013. In this case Paula and Leonard White had signed a contract to purchase real estate from the Farrells. However, after the contract was signed, the White’s decided that they wanted to cancel the contract because they claimed that drainage issues affecting the property was not fully disclosed to them. The Farrells refused to cancel the contract and ultimately claimed that the White’s defaulted by refusing to close title. During the course of the litigation Leonard White died and so the litigation continued and affected the interest he had in the proceedings. It appears that Paula was appointed as Executor of Leonard’s estate and represented the estate’s interest in the case. The Court of Appeals ultimately refused to grant summary judgment for the Farrells but did determine that the measure of damages suffered by the Farrells due to the Leonard’s breach of the Contract “is the difference, if any, between the Contract price and the fair market value of the property at the time of the breach.”

As can be seen from White, there are many issues that can impact Estate Settlement and the interests of a decedent. In many instances, I have represented Executors and Administrators where real estate is an estate asset. Such estates require that the Fiduciary take a very active role in managing the real property and protecting the estate’s interests especially where the property is the subject of claims and is affected by ongoing litigation.

February 27, 2013

New York Administrators and Executors Cannot Delegate Their Authority to Others

by Jules M. Haas

A New York Fiduciary such as an Executor or Administrator is appointed by the Surrogate’s Court after a person has died. As discussed in many posts in the New York Probate Lawyer Blog, an Executor is appointed as an estate representative when a Last Will has been probated. The Executor is typically nominated or named in the Last Will. Sometimes the Court may need to appoint an estate representative who is not named in the Will. In such case, the title of the appointee is Administrator c.t.a.

An Administrator c.t.a. should not be confused with the typical appointment of an Administrator which occurs when a person dies intestate or without a Will. In these situations, the decedent’s distributees are entitled to be appointed in accordance with the statutory priority set forth in Surrogate’s Court Procedure Act (“SCPA”) Section 1001.

As talked about in prior posts, an estate fiduciary has many duties and obligations. At the core of a fiduciary’s responsibilities is to determine and collect the decedent’s assets, pay debts, expenses and taxes and distribute the net estate to the Estate Beneficiaries. In order to facilitate these functions an Executor and Administrator has many powers. Many of these powers are listed in New York Estates, Powers and Trusts Law (“EPTL”) Section 11-1.1 entitled “Fiduciaries: Powers, Duties and Limitations”. For example, this statute authorizes a fiduciary to invest estate assets, maintain insurance, collect rents, sell property and make repairs to property.

All fiduciaries accept the fact that they have a great deal of responsibility. Depending upon the size and complexity of an estate, acting as a fiduciary can be a very time consuming job. Many of the tasks that need to be performed can be facilitated by a New York Estate Lawyer. When representing a New York Fiduciary, I routinely help a client collect estate assets and determine debts and obligations that need to be paid. However, there is no substitution for actual involvement and hands-on functions in Estate Settlement by the personal representative. Such obligations may be particularly demanding when the fiduciary lives out of state or in a foreign country. Out-of-State fiduciaries cannot provide a substitute for the many of the jobs they must perform.

A fiduciary cannot delegate his authority to someone else. He cannot give a Power of Attorney to anyone to perform the jobs that he is required to do. Thus, if a closing for the sale of real estate is to occur, the fiduciary is the only person with the authority to sign the deed and other transfer papers. The Executor or Administrator must either attend the closing or arrange to have all the necessary papers signed prior to the closing date and delivered when the deed is transferred. The fiduciary must also sign the Contract of Sale.

The prohibition against a fiduciary delegating his authority was recently recognized by the Court in Garmon v. County of Rockland, a case decided by U.S. District Court Judge Andrew Carter on February 11, 2013 and reported in New York Law Journal on February 22, 2013. In Garmon, the decedent had been arrested and died in police custody. Thereafter, the decedent’s daughter was appointed by the Surrogate’s Court as the Administrator of his estate. The daughter then executed a Power of Attorney in favor of the decedent’s father who then started a lawsuit to recover for the wrongful death of the decedent. The Court, however, dismissed the father’s lawsuit finding that the father was not the Estate Administrator and, therefore, did not have the authority to act on behalf of the decedent’s estate. Moreover, the Court found that the Power of Attorney was ineffectual since the daughter, as Administrator, could not delegate her duties regarding Estate Administration.

I have represented many Estate Executors and Administrators and assisted them with performing the various tasks associated with their responsibilities as a fiduciary. While a New York Estate Attorney cannot act in the place and stead of his client, I try to facilitate and expedite the Estate Settlement process so that my clients can fulfill their jobs as efficiently as possible.

January 16, 2013

New York Estate Assets in the Age of Facebook

by Jules M. Haas

The New York Estate Settlement process is often an overwhelming challenge to family members and friends who are appointed as Executors or Administrators of a decedent’s estate. Putting aside the sometimes complex task of Probating a Will or seeking Letters of Administration in an Intestate Estate, the newly appointed fiduciary is faced with the duties of marshaling or collecting assets, paying debts and expenses and filing estate and income taxes related to the decedent.

New York Estate Lawyers who represent fiduciaries assist their client with many of these items. However, dealing with assets, debts, claims and taxes, particularly where a decedent’s personal affairs were kept private during a decedent’s lifetime, requires time consuming research and attention to the details provided in the decedent’s records and papers.

In the Facebook and Web centered age, investigating a person’s lifetime affairs is even more difficult due to on-line banking, social media contacts, and web-based information in the “cloud”, all of which is accessed by a plethora of passwords and user ID’s. Thus, rummaging through a decedent’s paper bank and brokerage statements and incoming mail may not provide a full insight into his affairs which may, in fact, be paperless. Just accessing an e-mail account may be impossible.

In this regard, the authority of an Executor or Administrator may be thwarted by privacy rules and restrictions that are imposed on the users of these web/social media accounts. For example, the state of Virginia is now considering legislation that would allow the state’s probate laws to apply to so-called “digital assets”. As reported by Tracy Sears in a post on January 9, 2013 in wtvr.com, this legislation was prompted after the suicide death of a 15 year-old high school student. When the student’s parents attempted to access his Facebook account to try and discover reasons for his untimely death, Facebook refused the family access due to its privacy policies. Unfortunately, there was no state or federal law that gave an estate a right to override these company policies.

It appears that New Hampshire is also considering this type of legislation that would allow an Executor to have control over a decedent’s social media accounts.

An estate fiduciary is entrusted with the obligation of Administrating an Estate and providing finality to a decedent’s affairs so that the estate beneficiaries can ultimately receive their share of estate assets. It is, indeed, ironic that the web/social media avenues that can seemingly provide efficiency and productivity to a person during life are now an impediment to the settlement of that person’s affairs after death.

Providing the Estate Planning to avoid these issues of non-access to account information is always a good practice. Along with estate planning papers such as a Last Will, Health Care Proxy, Living Will, and Power of Attorney, a person should keep a clear and up-to-date record of user ID and password information. A trusted family member or friend should know where to locate this valuable information. Additionally, there has been a new trend towards preparing a “Digital Will”. As reported in an article by Claire Connelly at foxnews.com on August 30, 2012 entitled “Your digital Will: How to share your data after death“, specialized on-line sites allow you to store your user information and designate the beneficiaries who are to receive this information after your death.

December 5, 2012

New York Estate Laws Effect The Estate Interests of a Spouse

by Jules M. Haas

The relationship of marriage is among the most basic considerations in Estate planning and Estate administration.

The most common form of an estate plan is typically one where one spouse creates a Last Will that leaves an entire estate to the other spouse. The New York Estates, Powers and Trusts Law (“EPTL”) provides in section 5-1.1.A that one spouse cannot disinherit the other spouse. This section entitled “Right of election by surviving spouse”, essentially directs that a disinherited spouse is entitled to elect to receive an amount that is the greater of $50,000 or one-third of the decedent’s net estate.

Many other laws are intertwined with the status of married persons for estate purposes. The Federal estate tax and New York estate tax both allow unlimited deductions for assets that pass from one spouse to the other. Additionally, on the Federal level, there is “portability” or transfer of the unused portion of the estate tax exemption between spouses.

Thus, whether a decedent is married at the time of death can have a tremendous impact on a person claiming to be a surviving spouse and also on other possible beneficiaries such as children. The status of marriage and spousal rights can be challenged in Surrogate’s Court proceedings related to an estate. One such challenge may derive from EPTL 5-1.4 which provides that a divorce or other dissolution of a marriage may revoke a disposition in a Last Will or other beneficiary designation. If there has been a divorce, provisions benefiting a spouse that are found in a decedent’s Last Will which was executed prior to the divorce may be a nullity. Also, EPTL section 5-1.2 entitled, “Disqualification as surviving spouse”, sets forth that a surviving spouse may be disqualified if he or she “abandoned” the decedent.

It is usually not easy to demonstrate that a surviving spouse abandoned the deceased spouse. Numerous factors must be proved including that the abandonment was not consented to by the decedent. In a recent case entitled Estate of Hama, decided by Surrogate Kristen Booth Glen, a Manhattan Surrogate, and reported in the New York Law Journal on December 3, 2012, the Court declined to find an abandonment because the decedent had consented to the reconciliation of the surviving spouse with a prior paramour.

As a New York Estate Planning and Probate attorney, I routinely gather information from a client concerning the client’s current marital status and whether there have been any prior marriages that have ended in a divorce. In situations of divorce it is not uncommon that a person may have signed a Divorce Settlement Agreement or received a Divorce Judgment that creates obligations to maintain life insurance or make other monetary payments that would be obligations of an estate after death.

The variety of Surrogate’s Court proceedings where marital status or post-death claims can arise include Probate Proceedings, Administration Proceedings, Kinship Proceedings and Accounting Proceedings. It is essential that in all of these proceedings, as well as in developing an accurate and comprehensive estate plan, a person’s relationships must be determined and fully documented. This is especially important where marital status or spousal rights are in doubt or subject to question.

October 17, 2012

New York Estates and Guardianships May Involve Landlord-Tenant Proceedings

by Jules M. Haas

Many New York Estates and New York Guardianships contain assets in the form of real estate such as single or multi-family homes. Other possible assets can also include a condominium or cooperative apartment. These properties are a valuable, and many times the most valuable, asset owned by a decedent or an incapacitated person.

Problems often arise when the estate Executor or Administrator or Article 81 Guardian need to sell these assets to make a monetary distribution to beneficiaries or to pay expenses. Frequently, there are other persons who are living in these properties and remain there after the appointment of the fiduciary and they refuse to vacate the premises to allow the property to be marketed and sold. Persons who may be living in a house or apartment can range from children of the decedent or the incapacitated person to third party friends.

When a situation arises requiring the removal of a person from property as described above, the most common procedure is to file a Summary Eviction proceeding in the County where the property is located. This is the most common and expeditious method especially when dealing with non-relative occupants. For example, if the decedent had a Queens Probate or Brooklyn Probate and left a house in such County, the eviction proceeding would be filed in the Landlord-Tenant Part of the New York City Civil Court in such County.

Landlord-Tenant proceedings can be complicated and it is a good practice to obtain legal guidance from an attorney with experience in these matters. I have represented many individuals in Landlord-Tenant cases throughout New York. In an eviction case, there is usually an initial Notice sent to the occupant advising him or her to vacate by a certain date or Court proceedings will then be commenced. If the person fails to vacate as demanded in the Notice, a proceeding is filed in the Court to have the person evicted.

While eviction proceedings are “Summary” in nature, meaning that the process to have a Judge hear and determine a case is streamlined, the procedural aspects of these cases usually result in many adjournments and extensions. The ultimate consequence is that the Estate Administration or Settlement can be delayed for many months until the eviction process is completed.

In the Guardianship setting, a reverse scenario may occur. When a person becomes incapacitated they may be unable to pay the rent on the apartment where they live. Due to this non-payment of rent, the landlord may start an eviction proceeding against an incapacitated person who may be unable to defend himself or herself until a Guardian is appointed. In such situations, when a petition for Guardianship is initially filed with the Court, the Court may issue an Order Staying or putting on hold the eviction case until a Guardian is appointed who can either pay rent or otherwise defend the incapacitated person’s interest. Mental Hygiene Law section 81.23 provides that the Guardianship Court has the power to grant such a provisional remedy. There have been many instances when I have represented persons to be appointed as an Article 81 Guardian when I have obtained this type of relief and prevented the incapacitated person from being evicted from his or her home.

The ownership of real estate and tenancy rights relating to Estate and Guardianship proceedings can be very complicated and involve very valuable interests. As a New York Guardianship and New York Estate and Trust Lawyer, I have helped my clients recognize and deal with these issues.

October 3, 2012

New York Accounting Proceedings Allow Examination of the Fiduciary

by Jules M. Haas

A New York Executor and Administrator has an obligation to collect estate assets, pay bills and expenses and then distribute the net estate to the estate beneficiaries. Estate settlement in Manhattan or Brooklyn or Queens or other New York Counties is fundamentally the same.

As part of the settlement process, the estate fiduciary will prepare an accounting of his or her activities as an Executor or Administrator or Trustee. The form of the accounting is provided in official forms for the Surrogate’s Court. The accounting reports specifically all of the assets and income collected, all of the expenses and claims that were paid and the amount of funds that ultimately remain on hand to be distributed to the beneficiaries. Such distribution is made in accordance with the terms of the probated Will or as provided by the laws of intestacy.

Prior to distribution the accounting is given to the parties entitled to distribution so they can review and approve it. A fiduciary generally will not distribute shares of an estate without an approval of the account by all necessary parties and their signed Release and acknowledgement that they approve of the job done by the fiduciary.

In many cases, the beneficiaries either object to or have questions regarding the transactions of the fiduciary. When this occurs, there are provisions in the Surrogate’s Court Procedure Act (“SCPA”) and other statutes that provide a means by which the beneficiaries can investigate any questions they have about the administration of an estate or a trust. Specifically SCPA 2211 entitled, “voluntary account; proceedings thereupon” allows a party to take oral testimony of a fiduciary to examine all of the fiduciary papers relating to the accounting. Such papers may include bank statements, deeds, tax returns, financial records, bills and receipts. Following the completion of the SCPA 2211 examination a decision can then be made as to whether to file formal objections to the accounting.

Depending upon the size of an estate, an accounting may be very lengthy and report hundreds of different financial transactions. The review and advice of experienced accountants and New York Estate Lawyers should be obtained to determine whether there exists a valid basis to object to the actions of an executor or administrator. In some cases discovery of information from third party witnesses may also be needed such as banks and other individuals who have knowledge regarding the transactions.

Generally, the New York Surrogate’s Courts encourage interested parties to resolve their disputes, including accounting contests, without extensive Court proceedings or a trial. An estate accounting is always helpful to the recipients of estate bequests or shares. It provides a clear and concise review of all of the estate receipts and expenditures so that a party can understand exactly why he or she is receiving a certain sum of money.

Since accountings are an essential part of the estate process, I always advise clients who are Executors, Administrators and Trustees to maintain clear and complete records of all of their transactions and keep copies of all papers that may be needed to provide support and back-up for the transactions.

It should also be noted that Article 81 Guardians are also required to provide annual accountings. Mental Hygiene Law Section 81.31. Thus, all fiduciaries should maintain complete records so that they can respond to any questions regarding any item that appears in their accounting.

September 5, 2012

New York Estates are Controlled by Appropriate State Statutes

by Jules M. Haas

The Administration of the estate of a decedent requires the immediate determination as to the State law that controls estate settlement. Usually the domicile of a decedent determines which State laws (i.e., New York or New Jersey) will be applied to many of the issues concerning the estate. The determination of domicile can be a complicated matter that involves a review of which State the decedent considered to be his or her home and the contacts the decedent had with the State such as filing of tax returns or the issuance of a driver’s license.

Determining a decedent’s domicile and the proper State law to be applied can be important since the rules regarding Will execution, spousal rights, kinship, estate litigation and other substantive matters can vary from state to state. In this regard it is generally the rule that a Last Will can only be filed for probate in the State and locality where the decedent was domiciled at the time of death.

It should be noted that domicile may not only determine the proper State law to be applied in estate settlement but that it may be that a person’s domicile might be in a country other than the United States. In such cases, the laws of the country of domicile may need to be utilized to settle an estate.

New York Estate Lawyers are aware of the many issues that may arise where there is uncertainty or a potential conflict concerning the proper law to be used regarding an estate or beneficiary rights.

The New York Probate Lawyer Blog has had recent posts regarding disputes involving celebrity estates such as Adam Yauch of the Beastie Boys and the co-creator of the Superman character.

Celebrity estate problems can also arise regarding domicile and residence. With regard to domicile and the selection of appropriate State law, a United States Court of Appeals in California on August 30, 2012 ruled that heirs to the estate of Marilyn Monroe could not inherit rights to her publicity because she was domiciled in New York at the time of her death and such posthumous rights are not recognized by that State. As noted in an article in the Daily Report by Amanda Bronstad on September 5, 2012, the heirs unsuccessfully claimed that Marilyn Monroe was a resident of California.

The estate planning and probate and administration of a New York Estate requires that domicile and residency be reviewed very carefully. Individuals may have homes in many States or even countries. When a person dies, the Surrogate’s Court for Queens Probate, Manhattan Probate, Long Island Probate or Brooklyn Probate, as well as all other State counties, is going to review the decedent’s domicile and residency very carefully even before accepting any papers for filing. As can be seen from the Marilyn Monroe case, very significant rights can be affected by a determination of domicile.

Additionally, domicile can determine whether an estate is subject to State estate taxes. States such as New York impose an estate tax on local residents while other States do not have an estate tax. The cost to an estate for taxes alone is an important reason to investigate and determine a person’s domicile as part of the estate planning process.