New York Probate Lawyer Blog

Previous posts in the New York Probate Lawyer Blog discussed various issues concerning the qualifications of person to serve as an Executor or other fiduciary. Reference was made to New York Surrogate's Court Procedure Act Section 707 which is entitled "Eligibility to receive letters."

Notwithstanding the basic statutory qualifications, many situations arise where a person attempts to object to the appointment of an Executor named in a Last Will. For example, if a testator executes a Will and bequeaths his entire estate to his companion, and names the companion as the Executor, the children may object to the appointment. However, unless the children can demonstrate by particular evidence that the appointment was due to overreaching, or fraud or undue influence or some other improper factor, the Courts will honor the testator's intention and appoint the nominated fiduciary.

This very situation recently arose in a case entitled "Will of Rudolph M. Barboni", decided by Nassau Surrogate Edward W. McCarty III on April 25, 2013 and reported in the New York Law Journal on May 20, 2013. In Barboni the decedent named his friend as sole legatee and primary executor. Since the decedent's children were only named as contingent beneficiaries they did not benefit from the Will. Since the children were contemplating Estate Litigation in the form of a Will Contest, they objected to the friend's appointment as a Preliminary Executor.

The Court rejected the children's attempt to prevent the appointment of the friend as a Preliminary Executor. It found that the children did not present any bona fide claims of wrongdoing or undue influence. Instead, the Court said that the children's assertion of mere conclusory allegations were insufficient to defeat the testator's nominated choice for appointment.

As noted in prior blogs, the selection of an Executor and other fiduciaries is an important part of estate planning. This is particularly true where litigation in the Surrogate's Court may be expected in a Probate Proceeding or other Court proceeding. Therefore, it is important to review these issues with a New York Estate Planning Lawyer so the various problems and options concerning the naming of a fiduciary can be discussed. In some situations, it may be prudent to attempt to avoid the probate process and to create and fund a Living Trust. Such a Trust can function during the creator's life and act as a Will substitute by providing for an automatic disposition to named beneficiaries upon the creator's death. If a Will does not need to be probated, there is less opportunity for disgruntled family members to complain about the creator's choice of fiduciaries. A Living Trust is just one example of alternative solutions that are available to meet the estate planning needs and desires of New Yorkers.

Continue reading "New York Courts Prefer to Appoint Executors Selected by the Testator" »

New York Estates and Trusts are comprised of various types of assets. Very often these assets include real estate in the form of a single family home or commercial property. When an Executor, Administrator or Trustee has the responsibility of protecting and handling real estate interests, the job of the Fiduciary can become very complicated.

In the most simple case, the Fiduciary must protect the property which means the real estate must be secured and it should be covered by insurance, if possible. Additionally, the property may contain tenants or third-party occupants whose identity must be determined along with any leases or rights of possession such occupants may have. In many instances it will be impractical to distribute the estate without selling the real property. The decedent's Last Will or Intestate Distribution may require that many individuals receive a share of the property value which cannot be accomplished without liquidating the property into cash funds.

Also, the property may be subject to a mortgage or other liens or expenses that necessitate its sale in order that these debts or obligations be paid. Another consideration is the cost of maintaining the property and paying maintenance fees or property taxes. Such costs may require that the real property be sold rather than requiring the decedent's estate to pay these continuing costs.

When dealing with real estate an estate may also become involved in litigation that affects the property. New York Estate Lawyers often have to represent their Fiduciary clients in connection with this type of Estate Litigation. A recent case decided by the New York Court of Appeals is an example of the problems an estate can face with Real Estate Litigation. White v. Farrell was decided by the Court of Appeals on March 21, 2013 and reported in the New York Law Journal on March 22, 2013. In this case Paula and Leonard White had signed a contract to purchase real estate from the Farrells. However, after the contract was signed, the White's decided that they wanted to cancel the contract because they claimed that drainage issues affecting the property was not fully disclosed to them. The Farrells refused to cancel the contract and ultimately claimed that the White's defaulted by refusing to close title. During the course of the litigation Leonard White died and so the litigation continued and affected the interest he had in the proceedings. It appears that Paula was appointed as Executor of Leonard's estate and represented the estate's interest in the case. The Court of Appeals ultimately refused to grant summary judgment for the Farrells but did determine that the measure of damages suffered by the Farrells due to the Leonard's breach of the Contract "is the difference, if any, between the Contract price and the fair market value of the property at the time of the breach."

As can be seen from White, there are many issues that can impact Estate Settlement and the interests of a decedent. In many instances, I have represented Executors and Administrators where real estate is an estate asset. Such estates require that the Fiduciary take a very active role in managing the real property and protecting the estate's interests especially where the property is the subject of claims and is affected by ongoing litigation.

Continue reading "New York Real Estate Litigation May Involve a Decedent's Estate Interest" »

Estate litigation in New York can involve many types of issues. One area of dispute often concerns the rights various individuals may have in a decedent's Estate or Trust. For example, the New York Probate Lawyer Blog has discussed in previous posts issues concerning the determination of a decedent's next of kin or distributees. Kinship Hearings may be required by a Court to decide these issues which often relate to relatives such as cousins or more distant relatives whose relationship may be difficult to establish.

Persons interested in an estate may sometimes challenge the status of a surviving spouse. Questions may arise as to whether a marriage or divorce occurred, particularly where such proceedings occur in a foreign country and record keeping may be poor and valid proof of marriage and divorce proceedings may be difficult to obtain.

Litigation in estates may also arise where a person is either adopted by a decedent or where the decedent gave a child up for adoption and surrendered his parental rights. New York Estates, Powers and Trusts Law Section 2-1.3(a) provides that adopted children have the same inheritance rights as natural children. The statute, however, allows a person to avoid this result by expressing "a contrary intention". Thus, a person who prepares a Last Will or Trust can specifically exclude adopted children, or any other child for that matter, since there is no requirement in New York preventing a person from completely disinheriting a child, natural or otherwise.

In a sort of reverse situation where a parent gives up a child for adoption, New York Domestic Relations Law 117(b) provides, generally, that after an adoption is complete the adoptive child loses his rights of inheritance from his birth parents. Thus, except in certain specific instances, the adoptive child no longer will have any statutory inheritance rights with regard to the family of the biological parents. While these rules may appear on their face to be able to be applied without much confusion, the dynamics of family interaction and monetary considerations often create complicated issues for the Surrogate's Courts to decide.

An interesting example of the interaction of the New York adoptive rights statutes was recently presented in the Estate of John Svenningsen, which was decided by the New York Appellate Division, Second Department on February 6, 2013. and reported in the New York Law Journal on February 8, 2013. In Svenningsen, the decedent ("John") and his wife "Christine" adopted a child from China about one year before John died. The couple then commenced proceedings to formalize the adoption in Family Court, Westchester County and these proceedings were finalized after John died. John and Christine had other natural children. The documents that were involved in the Court dispute concerned various Trusts and John's Last Will. The Will was probated after John died and the adopted daughter ("Emily") was identified in the Probate Petition by Christine as one of John's children.

More than 7 years after the adoption and six years after the Will was admitted to probate, Christine surrendered her parental rights to Emily who was then adopted by another couple. When Emily's new parents discovered by searching court records that John's estate was valued at more than $250 million dollars, they sought an accounting from John's estate Executors and Trustees. The fiduciaries, however, refused to provide an accounting and claimed that Emily had lost her rights to inherit under John's Trusts and Estate pursuant to DRL 117 due to her adoption out of John's family. Both the Surrogate and the Appellate Court found though that Emily's right to benefit from John's Estate and Trusts were not lost by her adoption and that the fiduciaries were required to provide her with an accounting of her share of the Estate and Trust funds.

One interesting aspect of this case is that Emily's new adoptive parents were able to discover the large amount of funds available in John's estate by researching the Court records. There are many cases in the Surrogate's Court concerning Probate, Administration and Accounting proceedings where I have located valuable information to benefit a client by searching the Court records.

Continue reading "New York Estates Include Rights of Adopted Children" »

Estate Planning in New York requires a review and understanding of all of a person's assets and property interests. The New York Probate Lawyer Blog has previously discussed that a Last Will typically controls or directs the disposition of assets that are owned or held in a decedent's name alone.

Other assets may pass from a decedent to a beneficiary by operation of law. For example, jointly owned property such as a bank account or real estate is automatically transferred to the surviving joint owner upon death. Similarly, named beneficiaries of life insurance and pension or retirement funds directly receive these assets when a decedent dies. Typically, a Last Will does not control the disposition of these funds without very explicit directions. Similar principals apply to a bank account known as a "Totten Trust". Such bank accounts are usually created by a decedent and are titled in the name of the decedent "ITF" with the name of the beneficiary appearing thereafter. During his lifetime, a decedent would be completely free to add or subtract funds to the account and the "ITF" beneficiary would have no rights to any of the funds. However, upon the death of the account owner, all of the funds pass automatically to the "ITF" beneficiary. New York Estates, Powers and Trusts Law Section 7-5.2 sets forth many of the rules regarding these types of accounts.

New York Estate Lawyers are aware that an estate plan and creating a Last Will must take into consideration these accounts. The provisions of the Will may provide for property dispositions to persons other than those named as a beneficiary of a Totten Trust. Such an estate plan may not reflect a decedent's actual intent and may also lead to Surrogate's Court Litigation.

An example of the potential for contests regarding estate settlement and Totten Trusts was recently provided in a case decided by Manhattan Surrogate Nora Anderson on January 10, 2013 and reported in the New York Law Journal on January 28, 2013. In Matter of Wess, the decedent died leaving a Totten Trust in the name of her former lover in a sum of over $400,000. The Executor of the decedent's Will claimed that the bank account containing these funds should not be found to be a Totten Trust passing directly to the friend. Instead, the Executor claimed that the bank funds should pass to the estate under the Will.

Based upon a review of the bank records, 1099 Forms, testimony of bank personnel and other evidence, the Court determined that there was a valid Totten Trust. Thus, the bank funds passed directly to the decedent's friend and not pursuant to the Will provisions.

The Wess case demonstrates that Estate Planning in New York must include a careful review of how assets are owned. If Will provisions conflict with beneficiary designations on assets such as bank accounts, it is essential that a person understand where his assets will go upon death so that his intent is carried out. Moreover, if the intention is that a Totten Trust beneficiary receives an account and that a Will does not control this asset, it would be advantageous to confirm that the bank account name and bank records are absolutely clear as to this intention. In Wess, although the Totten Trust was upheld, the bank had lost the signature cards and destroyed other old papers associated with the original creation of the Totten Trust account.

Continue reading "A New York Estate Plan Must Consider Assets Held in a Totten Trust" »

The New York Probate Lawyer Blog has posted many items concerning Estate Litigation. Litigation in New York Estates in common in the context of a Will Contest where a distributee (next of kin) such as a child is either completely excluded from the Will or left a bequest that is less than expected. Other typical situations are where a Will disposes of an estate to unrelated third parties such as a caretaker or friend. Allegations concerning undue influence, lack of testamentary capacity or duress usually result from such occurrences. Where a Will is contested, the focus is not only on the decedent but also on the witnesses to the Will and the attorney draftsperson who can testify and shed light on the circumstances surrounding the creation of the estate plan and the Will execution process.

However, not all estate disputes concern bequests that emanate from a Will after death. Many times controversy surrounds inter vivos or lifetime gifts that are made by a decedent. Such gifts can be subject to attack based upon similar grounds of lack of capacity. Often, the lifetime gifts appear inconsistent with, and actually can destroy, an estate plan that the decedent set forth in a Last Will or Living Trust document.

Gift litigation can take place in different forms. Sometimes, prior to a person's death, an Article 81 Guardianship proceeding may be commenced due to a person's incapacity. Section 81.29 of the New York Mental Hygiene Law gives the Court the power to revoke transfers that were made by an incapacitated person. In situations that come to light after a decedent's death, an estate fiduciary, such as Executor or Administrator, can seek to recover assets for the estate where the life-time transfer appears to be improper. Proceedings for the turn-over of assets are provided in New York Surrogate's Court Procedure Act Section 2103.

An estate fiduciary has the responsibility to attempt to marshal and collect all of the assets that rightfully belong to the decedent. Demonstrating that a person lacked the capacity to make a certain lifetime gift is not easy. An example of the difficulty in prevailing with such a claim is shown in the recent case of Estate of Magda Cordell McHale, decided by Surrogate Barbara Howe of Erie County on September 28, 2012 and reported in the New York Law Journal on October 9, 2012.

In McHale, a beneficiary under the decedent's Last Will objected to the fiduciary accounting due to the failure to include certain charitable gifts the decedent made shortly before her death. After a hearing the Court concluded that the decedent had both the "intent" and "capacity" to make the pre-death gift.

Cases such as McHale present many difficult issues involving estate settlement and fiduciary responsibility. I have represented individual family members who have felt that such pre-death gifts were the result of undue influence. I have similarly defended individuals who have received pre-death gifts where assertions have been made that such gifts were the result of undue influence. In all cases, it is important to review the history of the decedent, the expressions of intent that may have been made and the relationships been the various parties in order to have a full and clear picture about the proprietary of the disputed transfer.

Continue reading "New York Gifts Made Prior to Death Are Often the Subject of After Death Disputes" »

New York Estate Planning Lawyers encounter many different issues that can have an effect on an estate plan and a decedent's estate. Post death concerns are often resolved in proceedings in the Manhattan Surrogate's Court, Queens Surrogate's Court or the Surrogate's Court in New York's many other counties. It is astounding, even to Long Island Estate attorneys and other probate lawyers, as to the many peculiar problems faced by estate fiduciaries.

For example, in a recent case decided by Manhattan Surrogate Nora Anderson on October 19, 2012 and reported in the New York Law Journal on October 16, 2012 entitled Matter of Ray, the Court was asked to declare a potential heir as deceased due to the heir's long absence. New York Estates Powers and Trusts Law (EPTL) Section 2-1.7 allows a Court to provide a presumption that a person is deceased after a three year absence. Based upon the demonstration of a diligent search and the potential heir's long absence and other evidence, the Court ruled that the potential heir was presumed to have died and the sole surviving heir was then able to administer the decedent's estate.

In another recent case decided by Manhattan Surrogate Kristen Booth Glenn on October 18, 2012 and reported in the New York Law Journal on October 26, 2012, entitled Accounting by Matseoane, the Court dismissed objections to an Administrator's accounting that were filed by a creditor of the decedent. The problem is this proceeding was that the creditor's alleged claim against the decedent's estate had been discharged by the decedent during her lifetime in a Chapter 7 bankruptcy. Not only did the Court dismiss the claim, it found that the creditor and the creditor's attorney acted improperly and were subject to Court sanctions.

As a New York Trust and Estates attorney, I am aware that having a properly planned estate can avoid many of the problems that arise during estate administration. The fundamental implementation of a Last Will may avoid issues regarding intestate succession and proof of kinship. However, it is not surprising that the lack of attention to proper planning can result in problems regarding estate settlement. However, even individuals with large estates and the monetary resources to obtain counseling regarding probate and succession issues often fail to properly plan their post death dispositions. A recent article appearing in Forbes by Erik Carter on October 17, 2012 entitled "What We Can Learn From Celebrity Estate planning Gone Wrong", chronicles some of the mistakes made by the rich and famous. For example, the article reports about the late classic folk and rock star Sonny Bono who failed to prepare a Last Will but fathered an out-of-wedlock child who claimed a share of his estate. Even the late former Supreme Court Justice Warren Berger cost his estate hundreds of thousands of dollars due to poor planning.

Estate Administration and Estate Planning requires time and thought and the assistance of professionals such as attorneys, accountants and financial advisors. An individual who neglects to create a proper plan with consideration for post death issues runs the risk that their family and beneficiaries will suffer the consequence of unnecessary cost and delay in wrapping up post-death affairs.

Continue reading "New York Estate Settlement and Estate Planning Involves Many Kinds of Issues" »

On May 4, 2012, Adam Yauch lost his battle with cancer at the young age of forty-seven. Sadly, this type of thing is not uncommon in New York, where cancer claims many lives each year. What makes this case more notable than most in an estate planning context is that Adam Yauch lived an alter ego for most of his life, where he was better known as "MCA," a founding member of the Beastie Boys. The hip-hop trio sold millions of records over the years and amassed a small fortune from record royalties, tour proceeds, and other sources.

Adam Yauch had the foresight to consult an estate planning attorney about drafting a Will. Yauch named his wife, Dechen, as Executor, and the Will was filed in the Manhattan Surrogate's Court earlier this month. The Will contained many standard provisions about how to distribute Yauch's assets.

As reported by Deborah L. Jacobs in Forbes.com on August 13, 2012, Part of Beastie Boy Adam Yauch's Will, Banning Use of Music in Ads, May Not Be Valid, Yauch's Will differs from most ordinary Wills since it directed that his image or name could not be used for advertisements. Yauch added language by hand to the Will after it was signed to provide: "in no event may my image or name or any music or artistic property created by me be used for advertising purposes." Celebrities and other public figures may want to prevent others from capitalizing on their fame after they die. Advertising professionals recognize that a public figure's death often creates a resurgence in public interest surrounding the individual. A recent example is Michael Jackson's estate which has made millions of dollars by promoting his image and music after his death. However, there are instances where fame can be exploited to the extreme. All else being equal, Yauch's inclusion of the above provision appears intended to prevent any such behavior.

The problem with the particular provision in Yauch's Will is that it is handwritten. New York frowns upon handwritten Will provisions because of the view that a handwritten Will provision is more likely to be forged, altered, or otherwise fraudulent. Yauch's Will is made even more problematic by the fact that the majority of the document is properly typewritten and executed, while the above posthumous advertising provision was added in pen after the execution of the rest of the document. The validity of the handwritten provision may result in Estate Litigation that may prolong the probate of the Will. The estate law in New York provides that handwritten additions to a Will after it has been signed are invalid. Estates, Powers and Trusts Law Section 3-2.1 entitled "Execution and attestation of wills; formal requirements: "provides in paragraph (a)(1)(B) that "No effect shall be given to any matter, other than the attestation clause, which follows the signature of the testator, or to any matter preceeding such signature which was added subsequently to the execution of the will."

Additionally, as pointed out in the Forbes article, the additional handwritten language created confusion in interpreting the extent of the restriction on advertising. In many cases where Will provisions are Contested, a proceeding for construction or interpretation of Will language is required. New York Estate and Trust attorneys are familiar with these proceedings but they may require extensive Court process.

The lesson to take away from the Yauch case is that New York and its boroughs are home to countless celebrities and other public figures, perhaps second only to Hollywood. As such, estate planning attorneys in New York's boroughs are more accustomed than most to drafting special Will provisions designed to protect a person's likeness, ideas, or other artistic property. The same attorneys know that the needs of their public figure clientele are constantly changing and intensely private, requiring the highest degree of confidentiality and legal skill.

Had Adam Yauch thought to investigate the integrity of his Will before his death, his Manhattan estate attorney may have discovered the dangers of including handwritten provisions and explained to Yauch that these provisions might end up having effects that he did not intend. If you are a public figure or celebrity who intends to have a Will executed in New York, or even if you are as far from the spotlight as possible, it is always a good idea to make sure your estate planning papers clearly reflect your intentions.

Continue reading "Late Beastie Boy's Will Offers Estate Planning Lessons for New York Public Figures" »

Clients sometimes consult a New York estate planning lawyer in order to investigate the possibility of "writing someone out" of a Will. In the eyes of the law, this process is called 'disinheriting' the person. Disinheriting essentially removes any rights or entitlements that a person may expect to receive upon the death of the testator. It is a right possessed exclusively by the testator and one that ordinarily may not be challenged. Sometimes challenges do occur in the form of a Will Contest or Contested Will where a distributee (i.e., next of kin) or other interested party may contend that the Will is invalid. As previously discussed in the New York Probate Lawyer Blog a Will may be contested on various grounds such as Undue Influence, Lack of Testamentary Capacity or Improper Execution.

The person drafting a Will may arrive at the decision to disinherit a relative or other interested person for any number of reasons. Some of the most common reasons to disinherit a person are: (1) the testator no longer maintains a relationship with the person; (2) the testator does not condone the life choices the person has made or is making; (3) the testator feels that the person has sufficient financial resources such that a testamentary gift would be inappropriate; or (4) the testator would rather bequeath the assets to another person to whom they had a closer relationship, or from whom the testator had received the bulk of his or her end-of-life care.

Whatever the reason, the decision to write someone out of a Will should not come lightly. Disinheriting a person often causes tremendous emotional and financial consequences, and can even make the possibility of a Will Contest more likely. After all, if someone's assets are left, for example, to all of the surviving children except one, the excluded child is almost definitely going to feel hurt, saddened, and/or angry. The excluded child may claim that the others unduly influenced the parent to keep him or her out, which may lead to years of bitter disputes and expensive Estate Litigation.

New York Estate Lawyers are aware that all Wills, Trusts and Advance Directives must be explicit as to the terms and beneficiaries. These emotional and legal considerations are, in fact, so persuasive that when the beneficiaries of a Will do not include the testator's spouse and/or children, New York courts sometimes find that the testator meant to have included the missing relative. This means that any document that excludes a close relative from the estate should contain clear, unambiguous language that cannot be interpreted any way other than to express the testator's desire to have that person excluded. such language can facilitate the Probate and Estate Settlement process.

Moreover, local laws still allow certain relatives to collect a portion of the estate assets even if this language is present. For example, in New York, a surviving spouse is entitled to collect either one-third of the estate or $50,000.00, whichever is greater. This occurs even if the spouse is written out of the Will, so that the surviving spouse does not experience a significant financial burden on top of the loss of their loved one. Estates, Powers and Trusts Law (EPTL) section 5-1.1A provides extensive rules that allow a surviving spouse to take a share of a decedent's estate (the "elective share") even if he or she is otherwise disinherited.

Continue reading "New York Estate Planning May Involve Leaving a Relative Out of the Will" »

New York Estate Lawyers assist their clients with many types of estate planning documents such as Last Wills, Living Wills, Health Care Proxy's, Living Trusts and Powers of Attorney.

All of these papers are generally created to work together so that a person's estate plan and lifetime directives are clear and can be followed without complication or estate litigation. A New York Statutory power of attorney empowers the appointed attorney-in-fact to make decisions regarding various types of matters such as business or real estate matters. A power of attorney is a lifetime directive and the authority granted by the power ends at the time of a person's death. However, decisions and actions made by the attorney-in-fact can have significant consequences after the death of the principal. For example, when an attorney-in-fact executes a deed transferring real estate, or transfers assets in various bank or brokerage accounts, during the lifetime of the principal, provisions that were made in Last Wills or Trusts may no longer be effective. This is because the assets that were meant to be transferred by such testamentary documents may not be owned by the testator in the manner anticipated when the estate plan was created.

Another potential problem is that the attorney-in-fact may use the power of attorney to amend or change some of the estate planning documents such as a Trust Agreement. This was the situation encountered by the Court in Perosi v. LiGreci, decided by the Appellate Division, Second Department on July 11, 2012. In Perosi, Mr. LiGreci had created, during his lifetime, an irrevocable trust and appointed his brother as trustee. LiGreci also created a power of attorney appointing his daughter as attorney-in-fact. Shortly before LiGreci died, his daughter used her authority under the power of attorney to amend the trust and designate the daughter's son as the new trustee.

The Court ultimately found that the attorney-in-fact had the authority, in this instance, to amend the trust.

In view of the Perosi case, it is clear that naming a person as attorney-in-fact in a power of attorney requires serious consideration. Estate settlement and administration can be compromised by the actions of an attorney-in-fact who has the authority to change estate planning documents. It is a good idea to put precise language into trusts and other agreements defining to what extent, if any, an attorney-in-fact can amend or change these papers.

Individuals expend a great deal of time and expense in planning their estates through the use of Wills and Trusts. It is unfortunate where the actions of a lifetime attorney-in-fact can result in Surrogate's Court litigation because these documents were changed without the testator or creator him or herself signing the amendatory papers.

A complete review by a qualified New York estate attorney is imperative so that a person's intentions regarding estate distribution is set forth and can be implemented without modification or confusion.

Continue reading "A New York Power of Attorney Can Be Used to Amend a Trust" »