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Taking advantage of older persons for economic gain is not uncommon. New York Guardianship Lawyers are familiar with many cases where a person who is incapacitated due to a physical or psychological condition is misled and mistreated in order to obtain control of their finances.

Guardianship proceedings under Article 81 of the New York Mental Hygiene Law (“MHL”) often involve situations where a caretaker or close relative or friend misuses their authority through a durable power of attorney or other paper to obtain control or the transfer of a person’s assets. Sometimes these papers include a Last Will that is all of a sudden changed and disinherits the incapacitated person’s family in favor of the wrongdoer. A number of recent blog posts provide examples of this all too frequent occurrence. In a post by Liz Schumer on January 27, 2014 at SpringvilleJournal.com entitled “Elder fraud: one woman’s story, a nationwide epidemic“, the tragic story is told about a Chicago woman who suffered from Alzheimer’s disease. In this case various persons conspired to get a power of attorney and guardianship over the woman and estrange her from her daughter. The post describes how the wrongdoers manipulated the woman and provides an excellent set of circumstances that are indicators of the existence of elder abuse such as large withdrawals from bank accounts, changes in the person’s legal documents such as a Will or Power of Attorney and unusual financial activity that the person would not ordinarily engage in.

Another recent post appearing at OrlandoSentinel.com on February 8, 2014 by Rene Stutzman entitled “Jeno Paulucci heirs fight over $150 million“, describes a recent Court filing that alleges that a multi-millionaire businessman who was 93 years old, legally blind and in intensive care transferred control over most of his $150 million estate from his longtime attorneys to other confidants.

Both the New York Guardianship Courts and the Surrogate’s Courts review cases where relatives claim that they were wrongfully deprived of their inheritance or assets which were improperly taken from their incapacitated next of kin. These Courts have the ability under numerous statutes and case-law to undue the abuse that has occurred by voiding powers of attorney or deeds and bank account transfers or denying probate to a Last Will.

I have represented many individuals in proceedings where elder abuse has occurred and the Court is requested to remedy the situation. Guardianship courts such as the Queens Guardianship Court and Manhattan Guardianship Court are vigilant in protecting senior’s rights and providing a remedy for financial manipulation of a person’s assets.

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New York Executors and Administrators have the obligation to settle a decedent’s estate. As discussed in previous posts in the New York Probate Lawyer Blog, an Executor is appointed when the decedent dies leaving a Last Will and Testament. An Administrator is appointed when there is no Will and a decedent dies intestate.

The powers of a fiduciary are provided for in a number of ways. New York Estates, Powers and Trusts Law Section 11-1.1 entitled “Fiduciaries’ Powers” sets forth the many statutory items that a fiduciary can perform such as investing estate property, collecting rent and paying all reasonable and proper expenses. In addition to the powers provided by the statute, where a decedent leaves a Will, such document can modify or expand the powers given to the fiduciary. Also, when the Court appoints a fiduciary, the appointment may provide a limitation or specification of the powers. In the case of an Executor, the letters testamentary that are issued by the Court after the Will is admitted to probate can provide a limitation that the fiduciary can collect only a certain amount of assets or perform only limited tasks. Similarly, letters of administration that are issued to an administrator can contain similar limitations.

During the course of estate settlement, a fiduciary is going to collect estate assets such as bank and brokerage accounts that were owned by the decedent. In order to obtain these funds for the estate, the bank or brokerage house typically requests that the fiduciary present a certified copy of the letter of appointment which shows that the fiduciary is authorized to act on behalf of the estate. In most cases upon the presentation of the letters and other supporting papers such as a copy of a death certificate and withdrawal forms, the decedent’s funds are then forwarded to the estate for deposit into an estate bank account.

Sometimes the collection of estate assets becomes more complicated and the person or institution holding the decedent’s funds does not cooperate with the fiduciary or turn over the decedent’s assets. In a recent case decided by Bronx Surrogate Nelida Malave-Gonzalez on January 27, 2014, entitled “Estate of Rose Hamilton” and reported in the New York Law Journal, Capital One Bank refused to cooperate with an administrator with regard to providing access to the decedent’s safe deposit box. Notwithstanding that the letters of administration issued to the administrator limited the collection of assets to $38,000.00, the Surrogate held that the fiduciary still had the authority to have access to the safe deposit box.

A Brooklyn Probate Attorney and a Queens Probate Attorney can assist a fiduciary with collecting a decedent’s assets and settling an estate. I have worked with many fiduciaries throughout New York to help with the administration process.

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The New York Estates, Powers and Trusts Law (“EPTL”) along with the Surrogate’s Court Procedure Act (“SCPA”) contain the statutory rules and procedures regarding decedent’s estates. EPTL Section 3-2.1 entitled “Execution and Attestation of Wills; formal requirements” has been discussed in previous blog posts. This section sets forth the rules that control the valid signing of a Last Will. The section provides, for example, that the Will must be signed at the end of the document by the testator. It also states that anything that is placed on the document following the signature as well as any matter that is added to the Will preceding the signature but after the Will is signed, shall be invalid.

New York estate lawyers are familiar with the proper preparation and execution of Wills in order to comply with statutory rules. However, there are occasions when documents appear to lack compliance with the statute and require review by the Surrogate’s Court. In Estate of Thomas a Will was filed for probate that contained numerous handwritten alterations to bequests set forth in the paper. In a decision dated January 7, 2014 and reported in the New York Law Journal, Bronx Surrogate Nelida Malave-Gonzalez reviewed the document and the evidence presented to the Court. The evidence included an affidavit from the attorney who prepared the Will which stated that when the Will was signed it did not contain the handwritten changes that were later found on the document. Based upon his proof and other information, the Surrogate found that the handwritten changes did not comply with the requirements of EPTL 3-2.1 and thus were not valid. The Will was admitted to probate and the alterations were ignored and did not change the original provisions of the Will.

In the event an individual wants to change or amend their Will there are two ways to proceed. A Codicil can be prepared which only revises the provisions that are sought to be amended. Instead of a Codicil, the entire Will can be redone in which the only change is the desired modification. Both the Codicil and the new Will need to be executed in accordance with the statutory requirements. The preferred method is to revise and sign a new Will. This tends to eliminate both any confusion and the need to keep track of a number of separately signed papers.

It is always important to have a Will and other documents such as a Health Care Proxy, Power of Attorney and Living Will properly executed. Additionally, in the event a creator wants to amend or change any of the provisions in these papers, it is equally important to do so in a manner that is proper so that the changes can become effective. All testamentary and advance directive papers should be prepared and signed correctly to avoid estate litigation such as Will Contests and to allow easy estate settlement.

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The New York Mental Hygiene Law (“MHL”) provides in Article 81 for the appointment of Guardians for personal needs and for property management. MHL Section 81.04 entitled “Jurisdiction” provides that the Court will have the authority to provide relief for someone who is a state resident, or a non-resident that is located in the state or to assist a foreign guardian. MHL Section 81.05 provides that the guardianship proceeding shall be commenced in the county where the alleged incapacitated person resides or is actually present.

Under the present statutes, confusion and controversy often arose when an alleged incapacitated person moved or was taken out of New York to a different state since New York would lose its jurisdiction to determine the need for a Guardian even through the person had lived in New York during his or her life.

Additionally, while New York has its rules regarding Guardianship, other states have their own separate requirements and standards. The appointment of a Guardian in New York would not result in the Guardian having any authority to act in any other state. Therefore, a new guardianship proceeding would need to be commenced if the Guardian wanted to relocate the incapacitated person to another state.

Recently, New York changed its statute to adopt the Uniform Guardianship and Protective Proceedings Jurisdiction Act (“UAGPPJA”). This new law becomes effective in April 2014. The law provides a mechanism by which a state with a priority of contacts with an alleged incapacitated person would have the primary right to determine the need for a guardianship. Guardianship proceedings could be transferred between cooperating states. Also, states that have enacted this law would be able to recognize out-of-state guardianship determinations. This would eliminate the need to bring new proceedings if it was necessary to relocate an incapacitated person for family or health care needs.

Petitions for guardianship can be a complicated process. In many cases assets and family members are located in different states. If there is a dispute among those seeking a guardianship, the simple act of transporting an alleged incapacitated person from one state to another can disrupt the entire process and put the welfare of the disabled person at risk. The enactment of the UAGPPJA should help alleviate these problems.

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The New York Probate Lawyer Blog has had numerous posts regarding the benefits of estate planning. When a person dies without a Last Will his estate is subject to the laws of intestacy and is distributed to distributees or heirs at law according to statutory priority. When an estate is planned by the drafting and execution of a Last Will, Living Will, Health Care Proxy and Power of Attorney, a person has the opportunity to specifically designate the individuals that he intends to benefit from his estate and who will make decisions regarding his affairs.

In the case of a Will, it is essential to clearly name and identify the intended beneficiaries such as “my son, John Smith” or “my friend, Mary Jones.” It is equally important that a Will and other documents specify contingent beneficiaries and alternative fiduciaries. Since a Will may be signed many years, even decades, before a person dies, these alternative provisions are likely to become the effective directions at the time of death. Therefore, the naming of substitute beneficiaries should not just be an afterthought but must be fully considered and carefully drafted as part of the Will Planning process. Failure to do so may disrupt estate settlement and result in the failure of the testator’s desires being expressed and complied with.

A recent example of the problems caused by not properly providing for contingencies in a Will is demonstrated in the case of Estate of Beatrice Thompson. In a decision dated December 23, 2013 and reported in the New York Law Journal, Richmond County Surrogate Robert Gigante was presented with motions for summary judgment in a construction proceeding. These types of proceedings are commenced when the Court’s assistance is needed to determine the meaning or effect of unclear or ambiguous terms in a Will. It appears that the decedent wife had written a Will that left her entire estate to her husband. However, the husband pre-deceased the decedent and the Will failed to provide for a disposition of the estate in the event of the husband’s death. The Court denied the motions since it found that questions of fact existed regarding the decedent’s disposition of the estate residue in view of the lack of any specific language disposing of the estate property.

Thompson is a good demonstration of the need for New York Will lawyers to assist their clients and provide documents that explicitly identify contingent beneficiaries. It is equally essential that all Trust and Wills have detailed provisions to cover all assets and dispositions. In a recent case the late Charlie’s Angels star, Farrah Fawcett, left all her artwork to her alma mater. As reported by the Associated Press on December 19, 2013 at HollywoodReporter.com, at the time of her death an Andy Warhol portrait was located in her condominium. However, Ms. Fawcett’s companion, film star Ryan O’Neal, claimed that the portrait really belonged to him. After a trial a jury decided in O’Neal’s favor. The lesson to be learned is that specifying items in a Will or Trust that may belong to others can avoid long and costly Court battles.

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The New York Probate Lawyer Blog has previously discussed cases involving the disqualification of a person from inheriting from a decedent’s estate. Where a person murders another the New York Courts do not permit the murderer to profit from his wrongdoing. The wrongdoer is deemed to lose any inheritance he might receive from the decedent. This basic principal was recently affirmed by Nassau Surrogate Edward McCarty III in the case of Matter of Innocent Demesyeux decided on December 23, 2013 and reported in the New York Law Journal on January 6, 2014. In Demesyeux the Court was faced with the issue of determining whether a mother who killed her children would be disqualified from receiving a share of the wrongful death proceeds resulting from their death. The Court found that the basic principals of equity should prevent the mother from profiting where she apparently had the ability to know that her acts were morally wrong.

Disqualification of a person’s inheritance interests appears in other aspects of New York estate law. Estates, Powers and Trusts Law (“EPTL”) Section 4-1.6 provides that a joint tenant of a bank account forfeits rights of inheritance as to the joint account if convicted of murder in the first or second degree. Also, EPTL Section 4-1.4 provides a number of situations where a parent is disqualified from receiving a distributive share of a child’s estate. For example, under 4-1.4(a)(1) a parent is disqualified if he or she fails or refuses to provide for the child or if the child is abandoned. Similarly, EPTL Section 5-1.2(a)(5) provides that a spouse may lose inheritance rights if he or she abandons the other spouse. Under EPTL 5-1.2(a)(6) such rights may be forfeited if a spouse fails to support the other spouse. There are also instances where in the event a Last Will contains a “no contest” clause a person may forfeit any bequests under the Will if the clause is violated.

New York estate attorneys are aware that estate settlement and distribution often involve many unique and complex issues. The resolution of matters regarding the interests of potential beneficiaries and heirs at law requires the investigation of all facts regarding the decedent and the estate and determining whether and to what extent a Last Will or appropriate estate statutes apply. I have represented many clients including Executors, Administrators and beneficiaries of estates with regard to their responsibilities and entitlements.

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The New York Probate Lawyer Blog contains previous posts concerning the benefits of a Supplemental Needs Trust. Briefly, a Supplemental Needs Trust (“SNT”) is a trust that allows assets to be held for the benefit of a person who is receiving governmental benefits such as Medicaid or social security disability. The maintenance of the trust fund will not interfere with or cause these benefits to be discontinued. The SNT trustee can use the trust to provide additional services or care for the SNT beneficiary over and above those provided by Medicaid or Social Security payments. New York Estates, Powers and Trust Law (“EPTL”) Section 7-1.12 provides the statutory provisions required for a trust to be qualified as a SNT.

As discussed previously, there are many situations in which a SNT can be established. For example, a person can establish a SNT in a Last Will to be funded upon death with the trust assets to be utilized for a person who is incapacitated or otherwise receiving governmental benefits. Another situation where a SNT is common is in connection with an Article 81 Guardianship. Instead of holding a person’s funds under the guardianship where the funds may cause Medicaid or other benefits to be discontinued or where the funds may be required to repay Medicaid claims, the assets can be placed in a Court approved SNT. Recently, in a decision by Nassau County Surrogate Edward McCarty III in Property of Alan Frederick Silverman decided on October 29, 2013 and reported in the New York Law Journal on December 16, 2013, the Court allowed the establishment of a SNT. In this case an incapacitated person for whom a guardian was appointed was the recipient of funds from the estate of his father. The guardian was allowed by the Court to create a SNT and to place the estate assets into the trust thus preserving them for the benefit for the incapacitated person.

I have represented numerous clients where a SNT was established in conjuction with the client’s appointment as the guardian of a person’s property and personal needs. Generally, the Courts are very receptive to creating these trusts since they afford incapacitated and disabled individuals the ability to afford services and care above those provided by governmental benefits.

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Estate taxes are an important aspect of estate planning and estate administration. A New York estate planning attorney typically recognizes that minimizing estate tax is important so that the maximum amount of assets can be passed on to beneficiaries for their benefit. The manner in which an individual provides for tax protection will be reflected in the monetary impact estate taxes will have in estate settlement.

At present the Federal government provides an exemption of up to $5,250,000 before estate taxes are incurred. As noted in prior posts in the New York Probate Lawyer Blog all transfers between spouses are exempt from estate and gift taxes. The value of a decedent’s gross estate for tax purposes is determined by adding all of the assets that he had an interest in at the time of death such as real estate, bank funds, retirement funds, stocks and bonds, business interests, etc.

However, under present law in New York the exemption from New York estate taxes is only $1,000,000. The difference in the exemption amounts between the Federal law ($5,250,000) and New York State law ($1,000,000) created difficulty for estate planning since an estate may be able to be exempt under federal law but incur New York State tax. This problem with a high federal exemption and low state exemption is not confined to New York. In a recent post in Forbes.com by Ashlea Ebeling dated November 1, 2013 entitled “Where Not To Die In 2014: The Changing Wealth Tax Landscape”, the problem of low exemption states is discussed. As pointed out in the post, in 2014 the Federal exemption will increase to $5,340,000.00. Thus, an estate of this size will pay no federal estate tax. However, since New York only has a $1,000,000.00 exemption, an estate of $5,340,000.00 would result in a New York estate tax of $431,600.00.

Recently, a commission appointed by New York Governor Cuomo called the New York State Tax Relief Commission, issued a report in which it recommended that New York State increase its estate tax exemption to the same amount as is allowed under federal law (i.e. $5,250,000.00). According to the report, by raising the exemption amount nearly 90% of all New York estates would be exempt from estate tax. This proposal is expected to be considered for passage in the coming year.

Both Federal and New York State estate taxes are important to consider since they can have a large impact on the amount of estate assets that actually pass to estate beneficiaries. I have worked with many clients in planning their estates and in estate settlement where considering the impact of estate taxes was important and the preparation and filing of estate tax returns was necessary.

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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.

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Estate Attorneys in New York are familiar with the process by which a Last Will is admitted to probate. Probating a Will essentially involves presenting the Will to the Court for review and having the Court determine that the Will is valid. Once the validity of the Will is established by the Court, an executor is given the authority to carry out the provision of the document.

The probate procedures are set forth in the New York Estates, Powers and Trusts Law and the Surrogate’s Court Procedure Act. The first step is to prepare a petition which contains information regarding the petitioner, the decedent, the Will and the decedent’s assets. The person named in the Will as the Executor is usually the one that prepares the petition. The probate petition must also contain the name and address of the decedent’s distributees (i.e., next of kin). These are the parties, such as a decedent’s spouse, children, parents or more distant relations, who have a right to object to the Will. Such objections would result in a Will contest.

Typically, the distributees will be given an opportunity to sign a Waiver form by which they can indicate that they have no objection to the Will. If a waiver is not signed, the distributees must be served with a Citation. A Citation is like a Summons, which is issued by the Surrogate’s Court and advises the party served to appear in Court on a certain date to essentially tell the Court that the Will should be invalidated. The objecting party is then provided with the opportunity to obtain discovery of relevant documents and to take the testimony of witnesses such as the attorney who drafted the Will and the persons who witnessed the Will signing.

In most cases, the Citation is personally served on or delivered to the party to whom it is directed. However, there are occasions when the decedent’s distributees are either unknown or unable to be located. These cases require that the Citation be served in a different manner. When a distributee is unknown or their whereabouts cannot be determined the Court will require that an affidavit and relevant information be provided demonstrating that a full and diligent search has been performed to identify and/or locate the distributee. Once the Court is satisfied that the due diligence requirement is met, then the Court may allow the Citation to be served by publication in a newspaper in the locality having the greatest chance of being seen by the distributee. In an interesting recent case entitled Last Will of Gladys Maynard decided by Nassau Surrogate Edward W. McCarty III on October 31, 2013 and reported in the New York Law Journal on December 5, 2013, there was an issue regarding the validity of the publication of a Citation. The Court had directed that the Citation be published in a certain newspaper and the attorney for the petitioner requested that the publisher insert the Citation as directed. Unbeknownst to the Court or the attorney, the designated paper was no longer published so the publisher inserted the Citation in a newspaper that had replaced the discontinued paper. The Court found that the publication of the Citation in the different newspaper was a mere irregularity and not sufficient enough to invalidate the service for jurisdictional purposes.

New York Trusts and Estates attorneys regularly deal with issues regarding the service of Citations, affidavits of due diligence and kinship matters. I have represented many clients who were faced with resolving these issues in estate settlement.

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