New York Probate Lawyer Blog

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.

Continue reading "New York Estate Settlement Requires the Payment of the Decedent's Debts" »

New York estates are subject to many requirements relating to taxes. Estate taxes can have a major impact on the estate administration process since the estate fiduciary such as the Executor or Administrator is responsible for timely preparing the estate tax returns and paying the tax that may be due. New York decedent's estates may be subject to both New York State and Federal Estate Tax.

The New York Probate Lawyer Blog has previously discussed revisions that were made to the Federal Estate Tax at the end of 2010. These new rules terminate at the end of 2012 unless extended or modified. Beginning in 2011 the basic amount of exclusion from the Federal Estate Tax was increased to $5,000,000 per individual. Under the new law, to the extent that the exclusion amount was not used for a deceased spouse, the unused amount could be transferred to the surviving spouse to be used to offset his or her estate tax. This transfer, called Portability, could conceivably allow the second to die spouse to have an exclusion of 10 million dollars.

In order to qualify for Portability, the Executor or Administrator of the first spouse to die must make an election on a timely filed Federal Estate Tax Return. A Federal Estate Tax Return is due to be filed within 9 months after death and a 6 month automatic extension can be applied for. The IRS recently issued a notice which provides additional time for filing the estate tax return for decedent's who died during the first six months of 2011. See article by Michael Cohn dated February 17, 2012, "IRS Extends Deadline on Estate Tax Portability Election." This extension of time would allow for the election of the portability option.

Fiduciary duties in settling an estate can be very extensive and complicated. Advise from probate attorneys and tax professionals is essential for an estate to be handled properly and efficiently. Estate assets need to be identified, valued and collected and bills, debts and other expenses paid. All of the estate financial information needs to be retained and organized so that it can be reported in the Estate tax return and accounting papers. Failure by a fiduciary to properly handle these financial and estate tax matters can result in damage to an estate and a breach of fiduciary duty for which a fiduciary may incur personal liability.

I have represented many fiduciaries over the years and assisted them with the numerous estate settlement tasks and tax reporting duties that they are responsible for completing. The welfare and interests of the estate beneficiaries are of utmost importance and it is essential to protect these interests by effectively processing the estate finances.

Continue reading "Estate Tax Rules Impact Estates of New York Decedents" »

The New York Probate Lawyer Blog has discussed different areas concerning estates of decedents such as Last Wills, Kinship, Probate and Administration, as well as Article 81 Guardianships. In many instances there is a combination of issues and problems that estate beneficiaries and fiduciaries face before estate settlement can be finalized. A recent case entitled Estate of Veronica Tesler, decided by Kings County Surrogate, Diana A. Johnson on January 11, 2012 and reported in the New York Law Journal on February 6, 2012, provides a typical example of estate administration that faced many problems.

In Tesler, the decedent, Veronica Tesler, had been determined to be incapacitated prior to her death. As such, the Court had appointed Guardians for her person and property. Also, prior to her death, Veronica had signed a Last Will in which she left her estate to her nephew and appointed him executor.

While Veronica's preparation of a Last Will was sound estate planning, the nephew predeceased Veronica. Apparently, Veronica did not provide for any alternate disposition of her property. The result was that she effectively died intestate (i.e. without a Will), because there was no provision in her Will for an alternate beneficiary. Tesler demonstrates that it is always best to provide for alternate beneficiaries in a Last Will as well as alternate Executors. The Brookyn Probate of Veronica's Will was thwarted by this apparent oversight.

Since Veronica died intestate her estate beneficiaries needed to be determined by the intestacy statutes of New York. Here, Veronica's maternal cousins filed a petition with the Court to obtain Letters of Administration. However, since the maternal cousins could not provide information regarding Veronica's paternal next of kin ("distributees"), the Court appointed the Public Administrator to handle the estate affairs. The Public Administrator is a public official whose function is to administer estates in various circumstances such as where no family member or no family member of close enough kinship in the case of intestacy is available.

After the Public Administrator completed the administration of Veronica's estate such as collecting assets and paying bills and debts, the Public Administrator filed an accounting with the Surrogate's Court. It was at this time that the maternal cousins were required to demonstrate at a Kinship Hearing that they were Veronica's sole distributees and entitled to receive her entire estate.

Kinship cousin cases can be very complex and require proof in the form of documents such as birth records, death records, marriage certificates, obituaries, census reports and also witness testimony to show which persons actually are the decedent's sole surviving next of kin. I have represented clients in these proceedings. The use of professional geneologists and investigators is also essential in proving kinship.

In Tesler, the decedent's maternal cousins were finally able to establish to the satisfaction of the Court that they were the decedent's sole surviving heirs. The case shows how despite preparing a simple Will, very complicated estate administration proceedings may be needed to settle an estate. Advice from an experienced New York Estate attorney is essential both to prepare an estate plan that can avoid complicated litigation and to help family members succeed in protecting their inheritance rights.

Continue reading "A New York Last Will May Require Proof Of Kinship" »

Under New York Law, spouses enjoy protections regarding rights to share in the other spouse's assets. While both spouses are alive, divorce laws such as "equitable distribution" provide a framework for the disposition of assets between spouses. However, when one spouse dies, rules provided by the New York Estates, Powers and Trusts Law and the Surrogate's Court Procedure Act come into play. Aspects of other statutory rules also must be considered between spouses, both alive and deceased, such as property concepts of ownership in the form of joint ownership or tenancy by the entirety.

During the course of a marriage, spouses may prepare Last Wills, as well as other papers such as pre-nuptial agreements or separation agreements. These agreements may obligate a spouse to provide certain benefits for the other spouse such as maintenance (i.e., alimony) and a paid up life insurance policy. Generally, these agreements are considered contracts and if a spouse dies without satisfying the obligations under the agreement his estate may be found liable for payments he failed to make during life. Additionally, these pre or post martial agreements can provide for a waiver of rights to share in the other's estate or to act as executor or administrator of the estate.

During estate settlement the requirements of these agreements must be reviewed and considered. Experienced probate attorneys representing executors and administrators typically review these documents so that the estate fiduciary can fully understand the impact the decedent's lifetime agreements will have on estate administration.

Two recent Surrogate's Court cases demonstrate how such agreements can affect the final settlement of an estate. In the Matter of Griffin, decided by Monroe County Justice Edmund A. Calvaruso on September 29, 2011 and reported in the New York Law Journal on October 24, 2011, the decedent had signed a Separation Agreement with his wife prior to death. When the decedent died he and his wife owned a house as tenants by the entirety. The agreement had provided that the house should be sold and the sales proceeds divided between them. Among other issues decided by the Court, it was determined that notwithstanding the agreement, following the decedent's death since the parties were still married, the surviving spouse was entitled to the full proceeds from the sale of the house. The house was not sold until after death. Since the house was still owned by the decedent and his wife as tenants by its entirety at his death, title to the entire house passed by operation of law to the surviving spouse as surviving tenant by entirety and the wife's property rights as a tenant by the entirety were not terminated by the separation agreement.

In Matter of Piyavan Chantarasmi [a/k/a Matter of Bruan], decided by Westchester Surrogate Anthony A. Scarpino on January 26, 2012 and reported in the New York Law Journal on February 23, 2012, the decedent had signed a Pre-Nuptial Agreement. The agreement provided among other things that he would leave 70% of his estate to trusts to be set up for his children in his Will. The decedent died Intestate (without a Will), due to an accident and, therefore, did not establish the trusts as required by the pre-nuptial agreement. The Court allowed the Estate Administrators to draft and create the trusts for the children as was required by the agreement.

Griffin and Chantarasmi both show that Estate Executors and Administrators must review all agreements and obligations relating to the decedent so that estate administration is properly handled. I have represented estates where these types of agreements had been entered into by the decedent and have advised the estate fiduciaries regarding the implications of these matters.

Continue reading "New York Estates May Be Affected by Marital Agreements" »

A New York estate proceeding in the Surrogate's Court requires the participation of all interested parties. First and foremost, a decedent's distributees (next of kin) must be identified so that proper notice, usually in the form of a Citation or Notice, can be sent to the parties at their current address. A due diligence search must be made to determine both the identity and address of all distributees. Both Probate and Intestate Administration proceedings require that these parties be included in the case. Failure to properly include necessary parties in Estate proceedings, particularly where estate litigation is involved, can create a defect whereby the Court's final determination may be subject to being found void.

The New York Probate Lawyer Blog has previously discussed issues involved where a decedent-father had children but was not married to the child's mother at the time the child was born. These non-marital children - distributees - usually face an uphill battle to show that they are, in fact, children of the decedent, and that they are entitled to a share of the decedent's estate or other rights they are given as distributees in the Court process.

New York Estates, Powers and Trusts Law Section 4-1.2 entitled "Inheritance by non-marital children", sets forth the grounds and manner by which a non-marital child can demonstrate his or her relationship. The statute provides that a non-marital child "is the legitimate child of his mother." However, with respect to his father, unless there is some Court Order or official determination of paternity, the most common avenue to prove kinship is to follow the statutory direction and provide "clear and convincing evidence" that "the father openly and notoriously acknowledged the child as his own." The statute also provides for proof by "genetic marker testing."

I have represented individuals who sought to inherit an estate where it was necessary to present evidence to the Court that satisfied EPTL 4-1.2. A hearing is commonly held by the Surrogate or a Court referee and documents and witnesses are presented to satisfy the legal requirements of open and notorious acknowledgement.

In a recent case decided by Westchester Surrogate Anthony A Scarpino on January 19, 2012 and reported in the New York Law Journal on January 27, 2012 entitled, Matter of the Estate of Michael Konstantin, issues regarding proper notice of Surrogate's Court proceedings and proof of kinship of a non-marital child converged. In Konstantine, a proceeding was commenced by a non-marital child to vacate the probate of the decedent's Last Will and the distribution of millions of dollars of wrongful death proceeds on the ground that the non-marital child was not included as a party to the prior proceedings and was entitled to receive a share of the proceeds. Based upon the evidence presented to the Court, the Surrogate found that the child presented some evidence that "the decedent openly and notoriously acknowledged the non-marital child as his own" and also showed that genetic marker testing was a proper method of discovery. Therefore, the Court directed that the decedent's other children submit to genetic marker testing which has a high probability of showing whether the non-marital child had a common father.

Surrogate's Court cases require the assistance of experienced estate attorneys who are familiar with the rules and procedures of estate settlement to protect the interest of the parties interested in a decedent's estate.

Continue reading "New York Non-Marital Children Can Inherit From Their Father" »