Articles Posted in Estate Litigation

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.

Estate settlement may involve complex issues regarding a decedent.  Many of the articles appearing in the New York Probate Lawyer Blog discuss issues concerning the probate of a Last Will and Testament or the appointment of an administrator of an intestate estate.  Probate and administration proceedings can take many months and involve Will contests, kinship determinations and disputes regarding the qualifications of a possible executor or administrator.

It should be recognized that the appointment of an estate fiduciary is just one phase involved in settling an estate.  Once a fiduciary takes office, there are many other issues which may need to be resolved.  These matters may involve extensive Surrogate’s Court litigation or disputes which are filed in other Courts.  Such controversies may involve claims against a decedent arising out of a business or creditor claims.

An interesting dispute emanating from an estate was recently the subject of a lawsuit in Manhattan Supreme Court.  Castellotti v. Free was a lawsuit in which the decedent (the parties’ mother) died, leaving a substantial estate.  Before death, it appears that the decedent’s son was involved in a divorce.  The decedent, who disliked the son’s spouse and wanted to prevent the spouse from sharing in any part of the decedent’s estate, took part in an oral arrangement whereby the decedent changed her Will to leave her entire estate to her daughter.  There was an oral agreement whereby after the divorce was completed, the daughter would transfer 50% of the mother’s estate assets and proceeds to her brother.  While there were additional terms to the oral agreement, the 50/50 arrangement was the centerpiece of the oral contract.  As can be anticipated, after the mother’s death, the daughter allegedly failed to comply with the oral agreement and failed to transfer estate assets to her brother.  As a result, the brother commenced a lawsuit against his sister to enforce the oral agreement.

The process of administering an estate in the Surrogate’s Court may involve numerous proceedings.  Initially, it may appear that only two main proceedings exist when a person dies.  One type of proceeding is called probate.  This situation arises when a person leaves a Last Will and Testament.  A Will must be admitted to probate in order for its provisions to take effect.

Another type of proceeding is known as administration.  This occurs when a person dies intestate – without leaving a Will.  In these cases, the decedent’s next of kin are designated in the estate laws to receive a share of the estate.

While these two proceedings dominate what is typically viewed as an estate case, there are numerous other proceedings which may occur in Surrogate’s Court.  For example, a person may commence a proceeding to compel a third party to file a Will with the Court.  Also, before an estate is settled, there may need to be a kinship proceeding to determine a decedent’s heirs.  Kinship cases can take place inside both probate and intestate administration matters.  Additionally, an accounting proceeding may be needed to finalize an estate and determine the shares of an estate to be distributed.

The settlement of a New York estate may involve many different proceedings and issues.  Initially, a proceeding needs to be commenced in the Surrogate’s Court to have an executor or administrator appointed to handle estate affairs.  This includes the identification and collection of assets and the payment of claims and expenses.  The New York Probate Lawyer Blog has published many articles discussing estate settlement.

The collection of assets is typically straightforward.  A decedent’s bank account or other financial funds are obtained and deposited into an estate bank account held in the name of the administrator or executor.  If a decedent owned real estate such as a house, the property can be sold so the proceeds can be collected and distributed to the beneficiaries of the estate.

There are occasions when a decedent’s assets are not easily identified or collected.  In many cases, prior to a decedent’s death, assets may have been misappropriated by a third party or transferred to others under questionable circumstances.  It is not uncommon to find that a Durable Power of Attorney was used to withdraw funds before a decedent’s death.  There are many cases involving undue influence and financial or elder abuse whereby a person’s assets may be improperly obtained prior to death.

After the death of an individual, a process of ascertaining and collecting assets needs to commence.  Of course, the appointment of an estate fiduciary, whether executor or administrator, is essential to the asset collection process.  In the event a delay is expected with regard to probating a Last Will or obtaining letters of administration in an intestacy, temporary appointments can be obtained.  In a probate proceeding, the Court can appoint a preliminary executor.  In an administration proceeding, a temporary administrator can be obtained.

One of the most important aspects of estate settlement is to determine which assets are recoverable by the estate.  There are many assets which pass outside of an estate and are not subject to collection by the estate fiduciary.  These items are transferred by operation of law and include joint assets with rights of survivorship, financial accounts which have designated beneficiaries, retirement accounts with named beneficiaries and life insurance with named beneficiaries.  These types of assets are paid directly to the named payees and an estate fiduciary does not collect them.  The New York Probate Lawyer Blog has published many articles concerning estate assets.

Situations arise where an administrator or executor needs to engage in estate litigation in the Surrogate’s Court in order to obtain access to and collect assets which are held by a third party.  One common avenue to recover estate property is by a proceeding under Surrogate’s Court Procedure Act Section 2103 entitled “Proceeding by fiduciary to discover property withheld or obtain information.”  However, in all proceedings in the Surrogate’s Court, the Court must find that it has proper jurisdiction to proceed.  Jurisdictional issues are sometimes complicated.

New York estate litigation encompasses many different aspects of trust and estate law.  Controversies may arise in many types of proceedings.  In the case of a probate proceeding, the most obvious area of dispute concerns the validity of a Last Will and Testament.  This type of controversy is known as a Will Contest.  Other aspects of probating a Will which can cause adversarial effects include whether a certain person should be appointed as an Executor.  Issues may also arise as to whether the language in a Will is clear or ambiguous.  A construction proceeding may be needed after probate to settle issues regarding the meaning or intent of Will provisions.  Another area of controversy may involve the right of election provided to a surviving spouse.  A spouse who is disinherited in a Will can file an election to obtain what amounts to one-third (1/3) of a decedent’s estate.  The calculation of a right of election can be complicated.

Intestate administration proceedings also garner a fair share of litigation.  First and foremost, the determination of the kinship of a decedent is needed to determine the identity of the parties to the proceeding and the rightful heirs of an estate.  Also, kinship will provide the status of the persons who have priority to serve as the estate administrator.  These issues can range from whether a person is a distributee or whether an alleged spouse was married to a decedent or divorced or disqualified due to abandonment.

Another area where litigation is common involves estate accounting proceedings.  All beneficiaries are entitled to receive an accounting from an executor or administrator.  Objections to the accounting can be filed concerning the propriety of a fiduciary’s actions.  Claims may be made regarding a breach of fiduciary duty.

Following a person’s death, the settlement of an estate, and any testamentary trusts which may be involved, typically occurs through proceedings in the Surrogate’s Court.  The New York Probate Lawyer Blog has published numerous articles concerning the probate and administration of estates.  As can be seen from a review of these publications, the types of estate litigation which can occur appears almost endless.

Just to review a few examples, leading the list as far as common recognition is the Will Contest.  In these cases, typically heirs of the decedent who have not received what they believe is appropriate under a Will offered for probate file objections to the Will.  These Will Objections usually focus on lack of due execution, undue influence and lack of testamentary capacity.  The contest of a Will is a long and complicated process which may take years and outcomes are never certain.  If the contestants put forward a viable case, it may very well result in a settlement.

Another very prevalent source of Surrogate’s Court litigation involves determining a decedent’s next of kin.  Kinship proceedings appear in both intestate administration matters and probate.  Both types of proceedings require that the decedent’s next of kin or distributees be accurately and fully identified and brought into the case to assert their rights.  Determining next of kin can be difficult and often requires the services of expert genealogists.

A very common issue that arises in estate litigation concerns pre-death transfers of assets.  When a person prepares a Last Will and Testament, this document only controls assets which are owned by a decedent at the time of death.  If an asset is transferred or re-titled into the name of another person prior to death, it is not part of the decedent’s estate whether he dies with a Will or intestate.  While property owned by a decedent at death may be intended for post-death distribution to certain individuals, a pre-death transfer very often changes or circumvents such distributions.  As a result, potential post-death beneficiaries often object to having their inheritance side-tracked by a lifetime transfer which occurs shortly before a decedent’s demise.  The New York Probate Lawyer Blog discusses many types of Surrogate’s cases regarding property transfers.

This scenario is precisely what occurred in a recent Queens estate case entitled Matter of Varrone, decided by Queens Surrogate Peter Kelly on June 17, 2021.

In Varrone, the decedent died leaving five children.  A number of years before her death, the decedent, through a series of deeds, transferred her home to just one of her sons, John.  She also prepared a Last Will leaving her estate to John.  Following the decedent’s death, another son, Charles, commenced estate litigation and sought to void the pre-death transfer of the home to John.

The estate laws in New York are comprised of a variety of statutes which set forth the right of individuals regarding estate inheritance.  Some of these more well-known rules relate to a decedent’s surviving spouse.  For example, as estate lawyers are aware, a surviving spouse cannot be completely disinherited.  Estates, Powers & Trusts Law Section 5-1.1A entitled “Right of election by surviving spouse” mandates that a spouse is entitled to receive essentially one-third (1/3) of a decedent’s net estate.  An interesting aspect of the statute is that it includes assets referred to as testamentary substitutes in the calculation.  Such assets are in the form of joint ownership or pay on death items which are outside of the probate or intestate administration estate.

While a spouse cannot be disinherited, another estate statute allows a spouse to be disqualified entirely from receiving any estate interest.  EPTL Section 5-1.2 entitled “Disqualification as surviving spouse” mandates that a spouse can lose inheritance if, among other provisions, the surviving spouse abandoned the decedent.  It should be recognized that abandonment is not easily proved and that a mere consensual separation of spouses, even if for many years, typically would not result in a disqualification.  The New York Probate Lawyer Blog has posted numerous articles regarding spousal rights and estate inheritance.  Executors and Administrators should be aware of these provisions.

A spouse is not the only family member who may lose rights through disqualification.  EPTL Section 4-1.4 entitled “Disqualification of parent to take intestate share” provides details as to the loss of a parent’s portion of an estate.  It should be remembered that under the laws of intestacy provided by EPTL 4-1.1 (“Descent and distribution of a decedent’s estate”), a parent inherits an estate where there is no surviving spouse or children or their descendants.  The statute states that if a parent does not provide for a child, i.e., support the child, or abandons the child while the child is under age 21, then the parent forfeits the inheritance.  The statute is focused on the intentional actions of a parent rather than a parent where, through no fault, cannot provide support.

After the death of an individual, the usual course is to proceed to have a fiduciary appointed to represent the decedent’s estate.  This is necessary in order to have someone who has the legal authority to collect the decedent’s assets, pay estate expenses and obligations and ultimately, distribute the net estate to beneficiaries.

In some cases the individual would have left a Last Will and Testament, which must be probated.  This results in the appointment of an executor.  If there is no Will, a proceeding needs to be commenced to have an administrator appointed.  Whether an executor or administrator is given authority by the Surrogate’s Court, someone receives the right to act on behalf of the estate.

It is not always known that a decedent’s estate, at least in New York, is not recognized as a separate legal entity.  The nature of a decedent’s post-death proceedings flow from the existence and authority given to the appointed fiduciaries.  Without the appointment of a representative for the estate, there is no one to act for the decedent and no one against which actions can be taken regarding the decedent’s affairs.