Estate Administration

September 5, 2012

New York Estates are Controlled by Appropriate State Statutes

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.

August 29, 2012

Estate Administration In New York Can Be Complicated By Disputes Over Asset Ownership

by Jules M. Haas

The fundamental goal of an Executor or Guardian administering the estate of a decedent or Guardianship funds is to collect and protect assets and distribute them on behalf of the appropriate beneficiary. The determination of the identity and value of assets is often very complicated. To begin with, assets may be unknown to the Executor, Administrator or Guardian and they must search through financial records such as tax returns and bank statements to discover necessary information. It is not usual for a fiduciary to discover an asset by finding a bank or brokerage statement that is delivered in the mail.

Not only is discovering assets a challenge during estate settlement, the ownership of the asset may be in dispute. For example, a decedent or an incapacitated person may be the owner of a small business with business partners. If the business records were not properly maintained a dispute may arise as to the percentage or share of the business that was owned by the decedent or incapacitated person. Disputes concerning the ownership of assets can have significant ramifications. First and foremost such ownership will directly affect the amounts that can be distributed to the beneficiary of the estate or Guardianship.

Also, whether an estate has a certain value will impact upon whether estate tax returns must be filed and the amount of estate taxes that must be paid. At present, a New York Estate Tax Return must filed if the value of an estate exceeds $1,000,000. The Federal Estate Tax filing requirement is $5,000,000. Additional estate tax issues such as a marital deduction may be impacted by the nature and extent of assets.

Queens Estate Lawyers, as well as estate lawyers throughout New York, work closely with their clients who are fiduciaries to ascertain and collect assets of an estate. The same holds true for New York Guardianship lawyers.

Estate litigation that generally occurs in the Surrogate’s Court may involve many issues regarding property and assets. A recent post in the New York Probate Lawyer Blog on August 24, 2012 discussed a case where the Last Will of Adam Yauch, a founding member of the Beastie Boys, faced probate and interpretation issues due to a handwritten addition to the Will.

Another recent case involving estate assets involves a dispute regarding rights claimed by heirs of one of the co-creators of the Superman character. As reported by Ted Johnson in Variety.com on August 14, 2012, “Ruling Near in Superman Rights Battle”, the dispute between a nephew of the co-creator, who is also the estate executor and Warner Bros. is to be decided by a U.S. District Court Judge. While the controversy concerns the interpretation of a prior settlement agreement and copyright law, the outcome will have a tremendous impact due to the apparent value of the Superman promotional rights.

The best course is for individuals to ascertain all of the assets that may be part of their estate and to clarify and resolve all issues regarding ownership rights as part of their Estate Planning. As can be seen from the recent situations discussed above, this is not always accomplished so as to avoid estate contests and controversy.

February 29, 2012

New York Estate Settlement Requires the Payment of the Decedent’s Debts

by Jules M. Haas

The administration of a New York estate requires that estate fiduciaries, such as Executors and Administrators, determine and resolve debts that are left by a decedent.

Debts and liabilities can take many forms. A decedent may have owned a home or other real estate. Such assets can have mortgage debts as well as judgments or other unpaid monetary liens such as municipal environmental control board violations, building code penalties, mechanics liens and property tax assessments. The estate fiduciary is obligated to discover all of these liabilities, determine the amount that may be validly due and then formulate the best manner in which to satisfy the outstanding balances. It is very common for the decedents’ real estate to be sold and the sales proceeds used to pay off the liabilities that relate to the real estate such as the mortgage. However, the sale of the real estate may take many months or years depending upon the marketplace. Meanwhile, mortgage payments and taxes can continue to come due and accumulate. Foreclosure may be a real threat to preserving the value of the estate’s property. These are all problems and issues that an estate fiduciary must solve as part of his or her fiduciary duty.

Estate liabilities may also be in the form of business obligations such as leases, credit card bills, medical bills and pending lawsuits. Manhattan probate attorneys as well as estate attorneys throughout New York regularly advise and help their clients who are Executors and Administrators as to the manner in which to protect the decedent’s estate in these types of situations.

I have represented many individuals where it was necessary to uncover and investigate the validity of liabilities that could be costly to an estate. Working closely with clients, these issues are reviewed and resolved to protect the interests of the estate beneficiaries and satisfy the obligations of the fiduciary.

It should be recognized that the decedent’s obligations are generally only enforceable against the decedent’s estate. Estate beneficiaries are usually not liable for any of the decedent’s debts and the estate fiduciaries, such as Executors, are only liable for these debts as representatives of the estate. There is usually no personal liability on the part of the Executor or Administrator for a decedent’s debts. Moreover, a creditor cannot bring a lawsuit against the decedent’s estate until a fiduciary is appointed by the Court. In a recent case entitled Rotwein v. Murray, decided on February 15, 2012 by Judge Michael A. Ciaffa of the Nassau County District Court, and reported in the New York Law Journal on February 28, 2012, the Court dismissed a lawsuit by a doctor for medical services performed for a decedent prior to death. The doctor had sued the decedent’s wife as “Executor” of the estate. However, since the doctor failed to provide the Court with any proof that the wife, or anyone else had in fact been appointed as Executor, the lawsuit was dismissed. Rotwein shows that without the actual appointment of an estate fiduciary, there is no one who is authorized to represent the decedent’s estate that can be subjected to a lawsuit.