New York Probate Lawyer Blog

Kinship in New York is always an important factor affecting estate settlement.  Most of the proceedings in the Surrogate’s Courts require that a decedent’s distributees or next of kin be included as interested parties.  For instance, where a person dies intestate without a Last Will and Testament, the estate is distributable to distributees according to Estates, Powers and Trusts Law Section 4-1.1 entitled “Descent and distribution of an intestate estate.”  The persons who have a right to be appointed as administrators in an intestate estate are similarly established pursuant to their status as next of kin in accordance with Surrogate’s Court Procedure Act Section 1001 entitled “Order of priority for granting letters of administration.”

In a situation where a decedent leaves a Will, all of the decedent’s distributees must be identified in a probate petition and provided with notice of the probate proceeding.  The reason for this is that the distributees have a right to contest a Will.  If a Will is determined to be invalid, the estate would then pass to the next of kin through intestacy.  The New York Probate Lawyer Blog has published numerous blog posts regarding probate and intestate estate administration.

Proving kinship is usually a difficult process.  Marriage records, birth certificates, and other documentary evidence, as well as testimony from individuals with first-hand knowledge of a decedent’s family, are required.  Due diligent efforts must be made to obtain this information.  In the case of a non-marital person, the job of establishing paternal kinship is even more difficult.  The important statute dealing with this issue is EPTL 4-1.2 entitled “Inheritance by non-marital children.”  This statute describes the various avenues for proving such kinship.

When an executor or administrator is appointed to settle an estate, there are many tasks which need to be accomplished.  Among the most basic fiduciary duties is the collection of assets and the resolution or payment of the decedent’s debts and monetary obligations.  The New York Probate Lawyer Blog discusses many of these matters in numerous posts.

While the payment of debts may seem rather routine, the process can be very difficult.  To begin with, the estate representative must identify the debts and obligations which exist.  These may include credit card or other credit obligations such as mortgages, car loans, stock margin accounts, home equity or other lines of credit.  These types of items may be easy to discover and to determine the extent of a claim since there are typically periodic account statements sent showing the outstanding balance.

In many cases the decedent’s obligations may be more difficult to discern and quantify.  There may be business debts or obligations to third parties involved in business transactions which are reflected in various agreements which are not apparent without a careful review of the decedent’s records.  Obligations may also exist as a result of a past divorce or matrimonial pre-nuptial or settlement agreement.  Such obligations may be binding upon a decedent’s estate as to future payouts or result in claims due to the decedent’s failure to make past due payments.

The Surrogate’s Court Procedure Act (SCPA) Section 103 entitled “Definitions” provides a definition for “Fiduciary” at paragraph 21.  The term includes an expansive list of titles including administrator, executor, guardian, and testamentary trustee.  Someone acting in a fiduciary capacity to another generally means that such person owes certain legal responsibilities to the party for whom they are acting or based upon the parties’ relationship.  Someone who is a Guardian for an incapacitated person in an Article 81 Guardianship, as well as an agent appointed under a Durable Power of Attorney stands in a fiduciary relationship to the person for whom they have accepted responsibility to perform certain tasks or acts.

Responsibilities flow from the authority given to a fiduciary either from the document which defines the manner or scope of the powers and also from the various statutes and rules and guidelines a fiduciary must follow.  For example, an Article 81 Guardian typically derives the extent of authority from the Order and Judgment appointing the Guardian.  Also, Article 81 of the Mental Hygiene Law (MHL) sets out certain powers that a Guardian may possess.  MHL Section 81.20 lists “Duties of Guardian” while section 81.21 sets forth “Powers of guardian; property management” and section 81.22 provides for “Powers of guardian; personal needs.”  Similarly, with respect to the estate laws, Estates, Powers and Trusts Law Section 11-1.1 provides an expansive list of “Fiduciaries’ powers.”

Thus, an executor or administrator in settling an estate needs to be aware of their responsibilities.  Another area which is always a topic of discussion is the fees that can be paid to a fiduciary for acting in such capacity.  These fees, called commissions, are meant to compensate someone for accepting and performing the job as trustee, guardian, administrator or executor.  The SCPA contains a number of sections which set out the manner by which commissions are allowed and computed.  For instance, SCPA Section 2307 sets forth the commissions to be paid to fiduciaries which are not trustees, while SCPA 2309 gives commissions for trustees for trusts created after August 31, 1956.  MHL Section 81.28 gives information as to “compensation of guardian.”

The administration and settlement of an estate in New York requires that the fiduciary perform many tasks.  Initially, the first hurdle that must be overcome is the actual appointment process.  When a decedent dies leaving a Last Will, the Will must be probated and the Court can appoint an Executor.  Where the decedent dies intestate, a proceeding to appoint an administrator is filed instead of a probate proceeding.  The New York Probate Lawyer Blog contains many posts discussing the probate process and intestate proceedings.  In the event there is a Will contest or Surrogate’s Court litigation regarding the administrator’s appointment, the estate may not have a fiduciary appointment for a period of time.  Applications can be made to the Court for the appointment of a Preliminary Executor or Temporary Administrator.

A Court appointed fiduciary is the only person who has authority to deal with the affairs that are strictly related to the decedent.  The fiduciary can collect assets that are in the decedent’s sole name and pay or compromise debts or claims which relate to the deceased.  Another important aspect of an appointment is that the Administrator or Executor can access the decedent’s safe deposit box and residence.  Taxes are an additional area where a fiduciary is important since he can sign the decedent’s outstanding income tax returns and also any estate tax returns which may need to be prepared and filed.  In fact, an estate representative may become personally liable if he fails to finalize and pay various tax obligations relating to the decedent.

There are other areas where the need for a fiduciary is essential.  For example, a number of recent Court decisions provide excellent examples of the essential role a duly appointed executor or administrator play in estate settlement.  Kew Gardens Dev. Corp. v. Butcher involved a Brooklyn estate and was decided by Brooklyn Surrogate Margarita Lopez Torres on May 13, 2021.  In Kew Gardens a dispute arose concerning the ownership of certain real estate and the various rights which the parties held pursuant to a certain deed and inheritance status.  The relevant portion of the case for our reference is that the Court held that the duly appointed Executor who had received letters testamentary was the only person who had the legal authority to convey the decedent’s interest in the property.  The Court also stated that this exclusive right did not diminish over time.