Estate Settlement

November 5, 2014

New York Estate Accountings Can Be Settled Without Court Proceedings

The settlement of a New York estate can be divided into three main parts. The estate can begin with proceedings to probate a Will and appoint an Executor. If there is no Will and the decedent died intestate, then a petition can be filed to appoint an Administrator. Once the estate fiduciary is appointed the next stage involves the task of identifying and collecting assets, determining and resolving debts and claims and paying estate expenses such as taxes which include both income and estate taxes. Of course, both of the above stages can be complicated by various forms of issues and estate litigation involving a Will contest, a kinship hearing or other disputes. These controversies may delay the appointment of a fiduciary and the resolution of estate affairs.

Once the estate activities have been concluded, the time has come for the fiduciary to prepare his accounting and make a distribution to the beneficiaries. In most instances the beneficiaries will receive a copy of the account along with a form entitled “Receipt, Release and Waiver and Refunding Agreement” or some variation thereof. Essentially, the form will provide that the beneficiary approves of the account and releases the fiduciary from further liability regarding the estate. If all of the interested parties sign a release form, the estate executor or administrator will not have to file a formal accounting proceeding in the Surrogate’s Court to obtain the approval of his account. This informal method of accounting results in less time and cost for the finalization of the decedent’s affairs. If any of the beneficiaries have any questions regarding the account they can ask the fiduciary directly to respond to their inquiry. Also, if a beneficiary wants to review any of the estate papers such as bank account statements or an estate tax return, such paper can be requested from the executor or administrator. Continue reading

October 1, 2014

New York Estate Litigation Often Concerns Real Property

by Jules M. Haas

The settlement of a New York estate involves dealing with many different estate assets. These assets may include bank accounts, stocks and bonds and retirement funds. In many instances the most valuable item comprising a decedent’s estate is real property. Such property may be in the nature of the decedent’s residence or investment or commercial real estate.

It is not uncommon that when a person dies their home had been owned by them for many years or even decades. Very often the decedent lived in their home with other family members such as a spouse or children or other relatives like nieces and nephews. Problems tend to arise where the decedent was not survived by a spouse and other family members had been living with the decedent in the home. Typically, the real property residence is either given in a Last Will to persons other than, or in addition to, those who had been living there with the testator. When there is no Last Will and a person dies intestate, the interest in the real estate may pass to a group of individuals who are the decedent’s next of kin or distributees. Such persons may or may not include the residents of the property. Continue reading

September 17, 2014

New York Surrogate’s Courts Require Proper Venue for Estate Proceedings

by Jules M. Haas

The Surrogate’s Courts in New York are located in the various counties. There is a Manhattan (New York County) Surrogate’s Court, Queens County Surrogate’s Court, Kings County Surrogate’s Court and so on. The County courts generally accept filings for estate matters that concern decedents that are domiciled in such county when they die. Surrogate’s Court Procedure Act (“SCPA”) Section 205 provides, in part, in paragraph 1 that “the proper venue for proceedings relating to such estates is the county of the decedent’s domicile at the time of his death“. Domicile is generally the location where a person has his primary home. See SCPA Section 103(15).

In view of the above provisions, upon the death of a person who has lived for example in Queens County, the proper court to file estate proceedings would be the Queens County Surrogate’s Court. Such proceedings may be a probate proceeding if the decedent left a Last Will or an Administration proceeding if the person died without a Will (“intestate”). Generally, if the case is filed in the wrong county the Court will reject it. Continue reading

July 16, 2014

Estate Asset Rights Need to be Protected

by Jules M. Haas

The New York Probate Lawyer Blog has provided numerous posts discussing the need to identify, protect and collect estate assets. One of the fundamental obligations of an estate fiduciary such as an Executor or Administrator is to make certain that property belonging to the decedent is available for the benefit of estate beneficiaries. As discussed in earlier posts, a decedent may have owned assets of various types such as bank accounts, real estate, stocks and bonds. However, interests in other types of assets such as intellectual property rights, copyrights, trademarks and business interests need to be secured, as well. There have been a few recent reports detailing the efforts made to obtain estate protection for these less common variety of property interests.

In a post by Eriq Gardner on June 2, 2014 in the HollywoodReporter.com entitled “Here’s the Lawsuit Claiming Led Zeppelin Stole ‘Stairway to Heaven’, it is reported that heirs of a guitarist and songwriter have filed a copyright infringement claim against the Led Zeppelin rock group. The lawsuit, which dates back to events occurring 43 years ago, asserts that the Led Zeppelin group wrongfully used guitar music previously created by the claimant to write the iconic “Stairway to Heaven”.

July 2, 2014

New York Estates Often Involve Issues Concerning Condominium and Cooperative Apartments

by Jules M. Haas

In New York it is very common that a person will own a cooperative or condominium apartment. The rights to the apartment may be part of a decedent’s administration estate where the decedent was the sole owner of the unit. In cases where the unit is held jointly, the ownership interest would pass automatically to the joint owner.

When a cooperative or condominium unit becomes a part of the estate, the Executor or Administrator is responsible for maintaining and disposing of the unit. Thus, monthly common charges and maintenance must be paid. Additionally, the unit may be subject to other issues. For example, the actor Philip Seymour Hoffman recently died in February 2014. At the time of his death the actor owned a condominium unit in the West Village. As reported at NYdailynews.com in an article by Barbara Ross on June 5, 2014, another unit owner sued the late actor’s estate alleging that a flood from the actor’s apartment caused extensive damage to their unit. Continue reading

April 23, 2014

A New York Fiduciary May Commence a Proceeding to Recover Property Withheld From an Estate

by Jules M. Haas

Following the death of a decedent, proceedings in the Surrogate’s Court are often begun for the appointment of an Executor or Administrator. As discussed in many past posts in the New York Probate Lawyer Blog, an Executor is appointed when a Will is admitted to probate and letters testamentary are issued. If a person dies without a Will, he is said to have died intestate and the Court then issues letters of administration to the administrator. The administrator is determined according to statutory priority of kinship pursuant to Surrogate’s Court Procedure Act (SCPA) 1001 entitled “Order of priority for granting letters of administration”.

New York estate lawyers are aware that an estate fiduciary has many responsibilities including locating and collecting estate assets. Sometimes it may occur that an asset belonging to the estate is being withheld or has been wrongfully taken by a third party. There are provisions in the SCPA that can be utilized by a fiduciary to discover and recover these assets from the third party. Continue reading

March 27, 2014

The New York Surrogate’s Courts Determine Many Different Issues Concerning Decedent’s Estates

by Jules M. Haas

There are numerous and diverse matters that are presented to the Surrogate’s Court for resolution. In the Manhattan Surrogate’s Court, the Queens Surrogate’s Court and the Brooklyn Surrogate’s Court, just to name a few, cases are presented regarding a variety of estate administration and estate settlement controversies. A review of some recent Court decisions provides insight into these disputes. Will of Ida Seals was decided by Erie County Surrogate Barbara Howe on March 10, 2014. This case involved a petition by the niece of a decedent to have the Court declare that a son of the decedent who was a named beneficiary in her Will was deceased since the son had been “absent” or not heard from since in or about 1980. New York Estates, Powers and Trusts Law (EPTL) Section 2-1.7 entitled “Presumption of death from absence; effect of exposure to specific peril”, allows the Court to presume that a person is deceased under certain circumstances. The Surrogate refused to invoke the presumption and to find that the son was deceased. Instead, the Court found that the petitioner failed to sufficiently demonstrate that a diligent search was performed to provide a substantive basis for presuming the son’s death. The petition was dismissed without prejudice for a later determination during the proceeding settling the fiduciary’s account.

Testament of Raffe is another recent case which was decided by Nassau Surrogate Edward McCarty III on March 7, 2014. In Raffe the objectants to an accounting filed by a testamentary trustee asked the Court for an Order restraining the trustee from providing or using any additional trust funds to operate a home heating oil business that was owned by the trust. The objectants asserted that the business was a failure and that the trust funds were being wasted. After considering the various factors involved to support a preliminary injunction, the Surrogate refused to allow the restraint. The Court found that any monetary harm could be rectified by a surcharge against the trustee and that economic loss that could be recognized in terms of money damages would not constitute the irreparable harm needed for an injunction. Continue reading

December 11, 2013

New York Executors and Administrators May Be Removed for a Breach of Fiduciary Duty

by Jules M. Haas

Fiduciaries in New York such as Executors and Administrators are responsible for carrying out their tasks in settling an estate. As discussed in previous posts in the New York Probate Lawyer Blog, the job of a fiduciary includes identifying and collecting a decedent’s assets and paying a decedent’s debts as well as estate administration expenses and income and estate taxes.

While these tasks may be uncomplicated in many instances, each estate presents its own problems and challenges that must be confronted and resolved by the Executor or Administrator. For example, prior to death the decedent may have been a party to a lawsuit as a plaintiff or defendant. Following death, the estate representative must take the place of the decedent as a party to the court action and process the litigation to finality in the best interests of the estate. It may not always be easy for the fiduciary to decide if a settlement of such litigation is more advantageous than a final determination by a court or a jury. A fiduciary needs to be concerned as to whether the estate beneficiaries will find fault as to the course of action taken and attempt to have the fiduciary found liable for any loss or expense incurred.

Also, a fiduciary is responsible for protecting estate property and if he fails to do so this may be found to be a breach of fiduciary duty resulting in a revocation of his court appointment. New York Surrogate’s Court Procedure Act (“SCPA”) Section 711 entitled “Suspension, modification or revocation of letters or removal for disqualification or misconduct”, provides various grounds upon which a fiduciary may be removed from office. For instance, paragraph 2 provides that a fiduciary can be removed if he has “wasted or improperly applied assets of the estate. . . .” In a recent decision by Manhattan Surrogate Nora Anderson dated November 26, 2013 and reported in the New York Law Journal on December 6, 2013 entitled Estate of Katherine E. Freeman, an estate administrator was removed. The Court found that the administrator engaged in serious misconduct that was harmful to the estate including the failure to pay maintenance on the decedent’s cooperative apartment which resulted in the apartment being sold in foreclosure.

Clearly, it is the responsibility of the estate representative to find and protect all of the estate assets. When a fiduciary acts improperly, the Court may surcharge him for the damage that is caused to the estate. I have represented many executors and administrators in Surrogate’s Court proceedings and estate litigation. It is important that the fiduciaries understand and are diligent in performing their fiduciary duties. I have worked closely with my clients in the estate settlement process to help them carry out their fiduciary responsibilities so that the interests of the estate and its beneficiaries are protected.

November 13, 2013

New York Rights of a Surviving Spouse May Be Disputed

by Jules M. Haas

As discussed in a number of earlier posts in the New York Probate Lawyer Blog, a decedent’s next of kin (“distributees”) need to be determined in Surrogate’s Court proceedings such as probate and intestate administration.

The estate laws allow significant rights to a decedent’s surviving spouse. Estates, Powers and Trusts Law (“EPTL”) Section 4-1.1(a)(1) provides that in the case of intestacy, a spouse is entitled to receive $50,000.00 and one-half of an estate if a decedent is survived by a spouse and issue (i.e. children) and if there are no issue, the surviving spouse inherits the whole estate.

In many situations, estate disputes may arise as to the interests claimed by a spouse. New York Will lawyers are familiar with EPTL 5-1.1-A which is entitled “Right of election by surviving spouse“. Under this statute a spouse who is disinherited by the decedent can claim an amount that is equivalent to the greater of $50,000.00 or one-third of a decedent’s net estate. However, another part of the EPTL, Section 5-1.2, lists various instances where a spouse may be disqualified from receiving a share of an estate. For example, a divorce or a determination that a marriage was void will terminate spousal rights. Another section of this statute, paragraph (a)(5), provides that a spouse will lose his estate rights if he abandoned the spouse that is deceased and the abandonment continued until the spouse’s death. Paragraph (a)(6) also directs disqualification in certain cases where a surviving spouse fails to support the deceased spouse.

There have been numerous estate litigation cases over the years concerning whether a spouse’s inheritance rights have been terminated under these sections of the law. In a recent case decided by Brooklyn Surrogate Margarita Lopez Torres entitled Estate of Joseph E Nichols dated October 4, 2013 and reported in the New York Law Journal on November 15, 2013, Surrogate Lopez Torres upheld the right of the surviving spouse to claim an elective share of the estate. The Court found that the assertions by the decedent’s children that the spouse abandoned the decedent or failed to provide the required support were not valid and could not provide a basis to disqualify the surviving spouse. The Court dismissed the objections to spouse’s right of election.

The settlement of a New York estate often involves complex issues regarding the determination and status of distributees and their rights to receive a share of a decedent’s estate. Sometimes these issues are resolved through a kinship hearing. In other cases, different proceedings such as the determination of the validity of a spousal right of election may be the process for such review. In all Surrogate Court disputes, it is always helpful to obtain advice and guidance from a qualified estates and trusts lawyer.

October 30, 2013

A New York Estate Attorney Has Many Responsibilities

by Jules M. Haas

The estate planning process as well as estate settlement almost always requires a close relationship between a New York Estate Lawyer and a client. When a client is planning an estate and seeking advice regarding the disposition of assets and the naming of beneficiaries, there must be a personal discourse with the attorney advisor. Depending upon each particular circumstance, a testator’s confidential information regarding such matters as divorces, non-marital children and sensitive business issues can be essential to developing an effective estate plan. Typically, the estate planning attorney will inquire of the client as to all information regarding assets and family life and history so that the provisions of documents such as a Last Will or Trust accurately take into consideration the possible effect of the testator’s family circumstances. For example, if the testator was adopted at an early age and has no information regarding his next of kin, an attorney may suggest the use of a Living Trust as a Will substitute. This trust could avoid the need to search for next of kin and to provide such potential heirs with notice of a Surrogate’s Court probate proceeding which would be required if the testator disposed of his estate through a Last Will.

Estate settlement and administration also requires a good working relationship between the fiduciary and the attorney. An Executor, Administrator and Trustee face many issues dealing with asset collection, payment of debts and claims and various tax matters. In some instances, the interests of the fiduciary and the beneficiaries themselves may be at odds or in conflict. Particularly in family situations, the fiduciary may be knowledgeable about and have relationships with family members that can assist legal counsel in resolving disputes without Court intervention. While legal guidance is essential, it is always best if interested parties can resolve differences amicably. In order for an attorney and fiduciary to achieve such results, they must work closely together.

An interesting aspect of the relationship between an estate attorney and a client relates to the well-recognized attorney-client privilege. When a person dies, the attorney-client privilege between the decedent and his life-time attorney generally continues. Thus, an attorney is prohibited from disclosing communications between the attorney and client even after the client dies. However, in New York Civil Practice Law (CPLR) Section 4503(b), the statute creates an exception which provides that “in any action involving the probate, validity or construction of a will, an attorney or his employee shall be required to disclose information as to the preparation, execution or revocation of any will or other relevant instrument, but shall not be allowed to disclose any communication privileged under subdivisions (a) which would tend to disgrace the memory of the decedent“. Therefore, confidential communications can be disclosed when there is a Will Contest.

It is also interesting to note that the Courts have ruled that a fiduciary who represents an estate can waive the decedent’s attorney-client privilege for the estate’s benefit. Moreover, as provided of CPLR 4503(a)(2) communications between an attorney and a personal representative, such as an Executor and Administrator, are generally privileged.

New York Estate Planning and Estate Administration typically require close and confidential communication between an attorney and a client. While it may seem obvious, creating and continuing a strong and trusting relationship between legal counsel and a client is more likely to produce a positive outcome whether in the creation of an estate plan or the settlement of an estate.