New York Will Attorneys are aware that there are many aspects of a decedent's estate that can result in controversy and estate litigation. A recent case decided by Queens Surrogate Peter J. Kelly on January 22, 2014 entitled "The Matter of Hill" and reported in the New York Law Journal, contains many issues that are common to estate disputes. In Hill, the decedent had executed a Last Will that provided for a residuary clause leaving the balance of the estate equally to the decedent's two daughters, Brenda and Marcia. The Will also contained a pre-residuary provision which specifically devised real property equally to the two daughters subject to a life estate in favor of Brenda.
Brenda lived at the real property premises with the decedent and became her attorney- in-fact in a power of attorney. Shortly before the decedent's death Brenda used the power of attorney to transfer the real property from the decedent into Brenda's sole name.
The transfer of the deed by Brenda as attorney-in-fact to herself is not an uncommon occurrence. Litigation by New York estate attorneys as well as Queens Guardianship Lawyers concerning such circumstances is often commenced to void the deeds in these transfers. Under both the estate laws and the New York Guardianship laws improper transfers of a person's assets can be invalidated and the property or the proceeds thereof recovered. Moreover, an attorney-in-fact under a power of attorney has an obligation to account for his actions especially where there appears to be self-dealing by having transfers made for one's own account. The Courts are more likely to find impropriety where a person abuses a confidential relationship by benefiting from his position of trust or authority.
In Hill the Court had previously found that the deed transfer by Marcia was voidable and the estate was able to recover title to the property. However, the dispute in Hill did not end. Since the real property had been transferred before the decedent's death it was not part of the decedent's estate when she died. As a result Marcia claimed that the property was subject to the rules of Ademption which effectively provide that when property that is specifically given under a Will does not exist when the decedent dies, the gift is essentially ignored. If the Court in Hill had applied the Ademption rule, then the real estate, once recovered, would have been disposed of under the residuary clause to the two daughters and not by the specific pre-residuary provision. This result would have eliminated Brenda's life estate.
Notwithstanding Brenda's improper and voidable transfer of the deed, the Court held that the recovery of the title to the property by the estate although occurring after the decedent's death, prevented the application of the Ademption rule. The Court also stated that Maria had a fiduciary obligation to the estate to recover the deed and that she should not personally profit by not following the terms of the Will.
I have represented many clients in New York Guardianship cases and estates where it was necessary to recover property that was improperly transferred. As can be learned from Hill, the Courts are receptive to proceedings to rectify a breach of fiduciary duty by a fiduciary and to enforce the disposition of assets in the manner a decedent expresses in his Last Will.