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The estate planning process as well as estate settlement almost always requires a close relationship between a New York Estate Lawyer and a client. When a client is planning an estate and seeking advice regarding the disposition of assets and the naming of beneficiaries, there must be a personal discourse with the attorney advisor. Depending upon each particular circumstance, a testator’s confidential information regarding such matters as divorces, non-marital children and sensitive business issues can be essential to developing an effective estate plan. Typically, the estate planning attorney will inquire of the client as to all information regarding assets and family life and history so that the provisions of documents such as a Last Will or Trust accurately take into consideration the possible effect of the testator’s family circumstances. For example, if the testator was adopted at an early age and has no information regarding his next of kin, an attorney may suggest the use of a Living Trust as a Will substitute. This trust could avoid the need to search for next of kin and to provide such potential heirs with notice of a Surrogate’s Court probate proceeding which would be required if the testator disposed of his estate through a Last Will.

Estate settlement and administration also requires a good working relationship between the fiduciary and the attorney. An Executor, Administrator and Trustee face many issues dealing with asset collection, payment of debts and claims and various tax matters. In some instances, the interests of the fiduciary and the beneficiaries themselves may be at odds or in conflict. Particularly in family situations, the fiduciary may be knowledgeable about and have relationships with family members that can assist legal counsel in resolving disputes without Court intervention. While legal guidance is essential, it is always best if interested parties can resolve differences amicably. In order for an attorney and fiduciary to achieve such results, they must work closely together.

An interesting aspect of the relationship between an estate attorney and a client relates to the well-recognized attorney-client privilege. When a person dies, the attorney-client privilege between the decedent and his life-time attorney generally continues. Thus, an attorney is prohibited from disclosing communications between the attorney and client even after the client dies. However, in New York Civil Practice Law (CPLR) Section 4503(b), the statute creates an exception which provides that “in any action involving the probate, validity or construction of a will, an attorney or his employee shall be required to disclose information as to the preparation, execution or revocation of any will or other relevant instrument, but shall not be allowed to disclose any communication privileged under subdivisions (a) which would tend to disgrace the memory of the decedent“. Therefore, confidential communications can be disclosed when there is a Will Contest.

It is also interesting to note that the Courts have ruled that a fiduciary who represents an estate can waive the decedent’s attorney-client privilege for the estate’s benefit. Moreover, as provided of CPLR 4503(a)(2) communications between an attorney and a personal representative, such as an Executor and Administrator, are generally privileged.

New York Estate Planning and Estate Administration typically require close and confidential communication between an attorney and a client. While it may seem obvious, creating and continuing a strong and trusting relationship between legal counsel and a client is more likely to produce a positive outcome whether in the creation of an estate plan or the settlement of an estate.

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The estate of a decedent in New York may contain many different types of assets. The New York Probate Lawyer Blog has discussed in past posts that such assets may include bank accounts, stocks and bonds and real estate. In fact, real estate, in the form of a family residence, is commonly one of, if not the most, valuable asset involved in estate settlement.

An Executor or Administrator who is handling an estate that has a real property asset faces many issues. To begin with, the fiduciary must determine the ownership of the property. Real estate can be held in many different ways such as tenancy by the entirety between spouses, or joint tenancy with rights of survivorship, or tenancy in common among a number of parties. The manner in which a property is owned will determine the extent to which the decedent’s estate has an interest in such property. Moreover, there are a number of overlapping fiduciary responsibilities that flow from the determination of ownership. For example, if the decedent’s house is owned by the decedent and his spouse as tenants by the entirety, upon death the full ownership interest in the house passes to the surviving spouse and no portion would be part of the probate or intestate administration estate. However, the value of the house would need to be included in the decedent’s estate tax return (if a return must be filed). The estate fiduciary has a responsibility to prepare and file the estate tax return and pay any Federal or State estate taxes.

Suppose that the property was owned by the decedent along with others as tenants in common. In such a case, only the decedent’s share of ownership would be part of his probate or intestate estate and includable as part of his gross estate for estate tax purposes.

If, however, the decedent owned property as a joint tenant with rights of survivorship with a person who was not a spouse such as a child, upon the decedent’s death, the entire property interest would pass to the surviving joint owner. However, the entire value of the property would be includable in the decedent’s estate for estate tax purposes unless it can be shown that the survivor contributed monetarily towards the property such as payment of part of the purchase price.

Also, determining whether and to what extent a decedent owns real property may not always be an easy task. Many persons own property for many decades and may have inherited an interest in the property along with others over time. There may be co-owners of the property who predecease the decedent. In the event the estates of these co-owners were not have been administered it may prevent the clear transfer of the decedent’s property interest.

Another challenge facing a fiduciary is the valuation of the real estate. In most cases, a certified appraisal will be needed to provide an accurate and acceptable valuation for estate tax purposes and the potential sale of the property. If approval of the sale of property is needed from the Surrogate’s Court, the Court will require that a proper appraisal is obtained. In many instances of intestate administration, the Surrogate’s Court will appoint estate Administrators but place a restriction on their powers that requires the approval of the Court before the estate real property can be transferred, sold or mortgaged.

I have represented Administrators who have been required to obtain Court approval of their sale of real estate. Based upon my over 30 years of experience helping clients in Surrogate’s Court and real estate closings, I have prepared the necessary contracts and Court papers to obtain approval of the transactions.

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A fiduciary appointed by a Court in New York is given various powers and authority to be used in carrying out the tasks of administration. The most common situation is the appointment of an Executor or Administrator by the Surrogate’s Court. In the case of an Executor, the decedent’s Last Will typically contains provisions that state the powers that the Executor is empowered to utilize such as the sale of the decedent’s real estate. The Will can limit or expand powers and the Executor is generally also afforded the powers that are provided by the statutes and rules such as Estates, Powers and Trusts Law (“EPTL”) Section 11-1.1 entitled “Fiduciaries’ Powers”. Paragraph (a) of the statute lists the various types of fiduciaries for which the statute applies such as executors and administrators. EPTL 11-1.1 then continues to provide the many and various powers that fiduciaries are entitled to exercise such as to invest and reinvest assets, to mortgage property, contest or compromise claims and sign deeds and other documents.

The New York Probate Lawyer Blog has discussed in earlier posts the obligations that a fiduciary has to act properly and not engage in self-dealing or other activities that would constitute a breach of fiduciary duties. The fiduciary can be personally liable to estate or trust beneficiaries or others if he acts in a manner that causes harm or losses to other parties’ interests. In view of the potential liability facing a fiduciary such as an executor, the fiduciary may be hesitant to make a decision regarding a matter that is causing dispute among beneficiaries or for which there is no absolute way to determine the right or wrong act before a decision needs to be made. For example, there may exist a situation where a decedent owned real estate or a business and the fiduciary needs to sell the asset for estate settlement. Although it is necessary to obtain appraisals and competing offers prior to a sale, the estate beneficiaries may nevertheless have conflicting views as to whether the fiduciary obtained the highest price for the asset when it is sold. In such an instance, a beneficiary may file objections to the fiduciary’s accounting and seek to hold him personally liable for an alleged shortfall between the claimed value and the proceeds received from the sale.

Unfortunately for the fiduciary in New York, he will most times be responsible to exercise his business judgment in making these decisions. The Surrogate’s Court routinely refuses to advise an executor or administrator beforehand as to the proper decision he is to make. The Surrogate’s Court Procedure Act (“SCPA”) does, however, contain provisions in SCPA 2107 that allow a fiduciary to obtain prior Court approval before acting at one’s own peril. This statute is entitled “Court may direct as to value, manner and time of sale of property and give advice and direction in extraordinary circumstances”.

The Surrogate’s Courts are not obligated to provide the fiduciary with “advice and direction” in all cases. The Court in its discretion must be convinced that there are sufficient extraordinary circumstances or other appropriate conditions before it will intercede and provide a fiduciary with direction. Most of the time the Court generally refuses to accept these types of cases and advises the fiduciary that it is their responsibility to exercise their business judgment in making administration decisions.

An executor or other fiduciary who accepts the responsibility of acting in such capacity needs to understand that he must proceed in a manner that does not breach his fiduciary duties. Moreover, while acting in good faith, the fiduciary may still be subject to situations where he is potentially liable for decisions made in the course of estate administration and that the Court will not usually provide advance guidance or protection regarding these matters. Thus, it is important that the fiduciary obtain advice from all possible and necessary sources such as a New York estate attorney, financial advisors, accountants, and other professionals relating to the particular situation involved.

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The determination of kinship is important for all New York estate matters. The New York Probate Lawyer Blog has had many posts discussing this issue.

Firstly, an Estate Planning Lawyer typically asks a client to provide information regarding next of kin. This information serves many useful purposes. It can indicate whether a person’s estate might be the subject of a Will Contest or Will Dispute if a testator is leaving a large portion of an estate to individuals who are not close relatives. If this is the case, the estate planning attorney may suggest alternative methods of asset distribution such as lifetime gifts or a living trust. These vehicles would avoid the probate and Surrogate’s Court process which provides next of kin (i.e. “distributees”), with an automatic right to contest a person’s Last Will.

Kinship information is important when a Last Will is to be filed for probate. An Estate Lawyer needs to prepare a Probate Petition that includes all information such as names and address of a decedent’s distributees. These distributees are then provided with a notice issued by the Court called a Citation as to the probate proceedings.

When a person dies without a Will, the estate is subject to intestate administration. The estate beneficiaries are the persons determined under the New York statutes. Estates, Powers and Trusts Law Section (“EPTL”) 4-1.1 provides for the priority of the heirs entitled to inherit.

In many cases, the next of kin of a decedent are unknown or are distant in relation such as cousins. It may be that the county Public Administrator is needed to administer such estates and that a Kinship Hearing is required by the Surrogate’s Court to establish the identity of the persons entitled to the inheritance. As can be seen, it is important to have complete information regarding kinship for effective estate planning and estate administration. Although a person may prepare a Last Will leaving his or her assets to a close friend or other non-heir beneficiary, the probate of the Will may be delayed and unduly costly due to the search for decedent’s heirs who were not identified or considered when the estate plan was created. Of course, when a person does not prepare a Last Will, the likelihood of complications regarding the determination and proof of kinship increases dramatically.

A recent Ohio case, although not directly involving a kinship estate problem, points to the issues faced when a person needs to show familial relationships such as the whereabouts or status of a potential heir. As reported by Ryan Dunn in The Courier.com dated October 8, 2013, a fellow named Eugene Miller was declared legally dead by the Hancock County Probate Court in 1994, which was eight years after he disappeared. Mr. Miller recently reappeared and claimed to have just “took off” due to alcoholism and loss of his job. He then petitioned the Court to reverse its ruling that he was dead. The Court, however, refused to reverse its ruling because the three (3) year limit to change the ruling had passed. Mr. Miller was told by the Court that he was still considered to be legally dead.

While Mr. Miller’s predicament seems somewhat unique, it points to the uncertainties and difficulties that can be presented when attempting to show kinship and proving that an ancestor is deceased or that he was not survived by any living issue. EPTL Section 2-1.7 entitled “Presumption of Death From Absense; effect of exposure to specific peril” provides a procedure to have an absentee declared to be dead. Also, New York Surrogate’s Court Procedure Act 2225 entitled “Determination of distributees, devisees, legatees, beneficiaries and distributive and beneficial shares” provides a procedure to have a possible estate beneficiary declared presumatively deceased.

The estate planning and administration process is quite complex and the need to understand and determine kinship is essential.

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The common view of the process of administering a decedent’s estate typically follows a progression whereby a person’s Last Will is probated, assets are located and collected, bills and taxes are paid, and finally the net estate is distributed to the estate beneficiaries. Generally, this description is applicable to many estates that are filed in the New York Surrogate’s Courts.

However, in numerous instances, the decedent’s family and the estate fiduciary, whether an Executor or Administrator, is faced with circumstances that might necessitate estate litigation or other Court proceedings to rectify wrongful acts that a decedent was subjected to prior to death.

For example, recently in a lawsuit brought by the pop star Michael Jackson’s family, it was alleged that Mr. Jackson’s promoter, AEG Live, was negligent in hiring the doctor that gave Mr. Jackson the drugs that resulted in his death. As discussed in an article by Eriq Gardner in the HollywoodReport.com on October 2, 2013, a jury found that the promoter was not to blame for the pop star’s death.

Another recent Court case in which a decedent’s heirs are seeking to protect rights or correct wrongs regarding a decedent involves the heirs of Frank Petrella who wrote an autobiography and a screenplay about the boxer, Jake LaMotta. Mr.Petrella died in 1981. As reported by Eriq Gardner in the HollywoodReporter.com on October 1, 2013, the United States Supreme Court has agreed to hear arguments regarding the dismissal of the heirs lawsuit which claims rights to the film Raging Bull and seeks damages from
MGM and 20th Century Fox for alleged infringement of copyrights.

Another example of estate litigation intended to rectify a wrong practiced upon a decedent is shown in a decision by Queens Surrogate Peter J. Kelly in Estate of Rita Koch, decided on September 13, 2012 and reported in the New York Law Journal on October 4, 2013. In Koch the petitioner sought to obtain copies of the personal banking records of a person who was the attorney-in-fact for the decedent during the decedent’s life-time. The Court allowed the discovery in view of the evidence that showed that the attorney-in-fact breached her fiduciary duties to the decedent by self-dealing.

As demonstrated by the above examples, administration of a decedent’s estate sometimes may involve more than just settling affairs by collecting assets and paying expenses. New York Estate Lawyers are familiar with the many instances in which lifetime occurrences affecting the decedent may need to be rectified by post-death estate Court proceedings. These post-death proceedings can include wrongful death or negligence actions, discovery proceedings against third parties who converted or wrongfully obtained assets from the decedent prior to death or the enforcement of agreements or contracts that the decedent entered into and were not adhered to by third parties. In these cases and others Executors, Administrators and family members need to be vigilant to protect the rights and assets that a decedent is entitled to.

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New York estate planning lawyers are aware of the need to prepare estate planning documents with clear and unambiguous language. There are many types of papers that require clarity of language. These include Last Wills, Living Trusts, Living Wills and Health Care Proxies.

The use of specific provisions contained in documents such as a Last Will and Living Trust is most critical since these papers reflect a person’s directions and intent regarding the disposition of assets. There may be various provisions in a Will or Trust that may provide for a gift of a certain sum of money to a named individual. There may also be more complex provisions that provide for disposition in a trust with various conditions or alternatives in the event individuals become deceased. Dispositions, especially to a surviving spouse may have certain tax consequences and there may be specific Will clauses that allocate the burden of paying estate taxes against particular bequests.

The use of definitive and non-confusing language serves to provide maximum effect to a testator’s or creator’s intent and prevents post-death confusion and disputes regarding the meaning of the language contained in the document.

The New York Surrogate’s Courts have been the forum of many cases where the wording in a Will or Trust has been the subject of Estate Litigation. Two recent cases provide examples of such estate disputes and the manner in which a Court might view such issues. In general, where language in a document is unclear, a “construction proceeding” is needed to resolve the issue. Recently, Manhattan Surrogate Nora Anderson was presented with a petition for a Will construction in Will of Edwin C. Scheurer. In a decision dated September 16, 2013 and reported in the New York Law Journal on September 23, 2013, Surrogate Anderson found that there was no ambiguity in the Will provisions that eliminated a bequest to one of the decedent’s grandchildren. Since the Will language was not ambiguous, the Court refused to allow any extrinsic or outside evidence to be used to interpret the testator’s intent.

A different result was reached, however, in In Re Estate of Phillips, 957 N.Y.S. 2d 778 (4th Dept. 2012), where the Appellate Division determined that the language in the Will was unclear and required that extrinsic evidence be used to determine the testator’s intent. Phillips is instructive since it presents a situation that at first glance would not cause a Surrogate’s Court Litigation. The Will in Phillips contained a provision whereby the testator gave his residence “and the plot of land appurtenant thereto” to his live-in girlfriend. A dispute arose as to whether the language “and the plot of land appurtenant thereto” referred to the land upon which the residence was built or to another plot of land that was adjacent to the residence and the land upon which it was situated. The Court found the language to be ambiguous and referred the case back to the Surrogate for further proceedings to consider the surrounding evidence of the decedent’s intent.

Estate planning in New York requires the creation of a number of different documents. While it is important to ascertain the intention and desire of the person who is creating the Will or Trust, it is equally necessary to express all intentions and directions in clear and unambiguous language to avoid Will Disputes and dissention between beneficiaries.

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A New York Guardianship proceeding under Article 81 of the Mental Hygiene Law (“MHL”) can be a very complex and sometimes lengthy process. The New York Probate Lawyer Blog has discussed in many posts the Guardianship process. The essence of the proceeding is a determination as to whether the alleged incapacitated person (“AIP”) is “incapacitated”. As provided in MHL 81.02 a finding of incapacity requires clear and convincing evidence that the AIP will be harmed because he cannot provide for his personal or property management needs and cannot adequately appreciate and understand the nature and consequence of his disability.

The Guardianship Court will be presented with a Petition and a Court Evaluator usually will provide the Court with a report and recommendations. A hearing will be held at which time testimony from parties and witnesses will be given and other evidence introduced. A decision and judgment issued by the Court finally determines whether a Guardian is appointed, and if so, the Court selects the Guardian and delineates the Guardianship Powers.

It is preferable, however, and if possible, for a person to prepare and finalize documents identified as advance directives that might obviate the need for a Guardianship. A Health Care Proxy is a perfect example as to advance planning whereby a person is named as an agent to make health care decisions if the principal or creator of the proxy is unable to do so. Similarly, a Power of Attorney allows a person to select other individuals to make property management decisions regarding many specified items such as real estate or business transactions or tax matters. These two documents, a Health Care Proxy and Power of Attorney, might avoid a long and costly Guardianship court case.

Another document that a New York Estate Planning Lawyer can assist with is a Living Trust. These trusts allow the creator to place all assets under the trust while maintaining full control as the Trustee over their disposition. However, provisions in the Trust can provide for a substitute Trustee if the creator becomes disabled or incapacitated. A Living Trust can also act as a substitute for a Last Will and typically provides very similar provisions for the disposition of the trust promptly upon the death of the creator.

While advance directives can be very helpful and may avoid the Guardianship process, all such documents may still be the subject of controversy and court proceedings. Just recently, Dutchess County Supreme Court Justice James D. Pagones decided a case entitled Matter of IMRE B.R. In IMRE a person had executed a power of attorney and Merrill Lynch refused to accept or honor the power. Merrill Lynch claimed that the principal might have lacked capacity to sign the power. A petition was then brought under the New York General Obligations Law Sec. 5-1510(2)(i) to compel Merrill to accept the power of attorney. After reviewing the allegations, the Court granted the petition to compel.

Estate and lifetime planning requires a consideration of a persons assets, desires and intentions and the effect these decisions may have on intended beneficiaries. The implementation of advance directives can provide an efficient and expeditious way to deal with circumstances such as incapacity and even a short-term disability. By expending the time and effort to provide these papers, the more cumbersome and lengthy Guardianship process may be avoided.

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There are many aspects in life that can have an impact on a person’s estate. An individual’s marriage is certainly one of the most important and dramatic factors regarding estate rights.

If a decedent was married, a surviving spouse is given many estate rights and privileges. As discussed in numerous posts in the New York Probate Lawyer Blog, a spouse is considered a primary distributee or next of kin. As such, a spouse has a right to act as the Administrator of the estate where the decedent dies intestate (without a Will). A spouse also has the right to receive a minimum amount of a decedent’s estate and cannot be totally disinherited. A spousal right of election is provided by New York Estates, Powers and Trusts Law (EPTL) Section 5-1.1A. Generally speaking, the right of election is the greater of $50,000.00 or one-third of a decedent’s net estate. EPTL Section 5-3.1 also gives a spouse a right to certain basic personal assets of the decedent such as household furniture and a motor vehicle having a value of up to $25,000.00. EPTL 4-1.1 sets forth a spouse’s share of an intestate estate.

The Federal and New York State Estate Tax Laws also have provisions that are favorable to a spouse. The tax laws allow an unlimited marital deduction by which spouses can transfer an unlimited amount of assets between themselves without incurring gift or estate taxes.

Due to the rights and monetary benefits afforded to a spouse in a decedent’s estate it is not unusual to find Estate Litigation regarding a spouse’s interest in an estate. Estate disputes can involve issues as to whether a valid marriage between the decedent and the spouse ever occurred or whether the parties were divorced. EPTL 5-1.2 provides, among other things, that a valid divorce will disqualify a person from invoking spousal rights. Another area of controversy involves pre-nuptial or anti-nuptial agreements whereby a spouse may have agreed to waive or limit spousal rights of inheritance. These agreements can be the source of Estate Contests as to the interpretation of the language in the agreement or whether the agreement is void due to coercion or other factors.

In New York State, like many other states, the divorce laws are based upon concepts such as equitable distribution whereby married couples assets are divided in a so-called equitable manner based upon many factors such as contributions during the marriage, the determination of separate property and long-term valuations of marital assets such as professional licenses and business interests. Equitable distribution may, in fact, provide a spouse with greater monetary benefits than the one-third or one-half interests that are applied by the estate laws after a spouse dies. In a number of instances courts have been confronted with cases where a spouse dies during the divorce process and have been asked to decide whether the estate laws or divorce equitable distribution laws apply to divide the deceased spouse’s assets. Generally, a death will abate or stop the divorce case and, therefore, the estate laws take over. However, the courts have recognized that where a divorce case has essentially been decided, even though the final judgment is not issued, the Courts will allow the equitable distribution laws to apply. In the recent case of AC v DR decided by New York Justice Stacy D. Bennett on August 29, 2013 and reported in the New York Law Journal on September 10, 2013, these very issues were presented for review. In AC the Court had granted a divorce to a husband and had concluded hearing the testimony as to equitable distribution but had not made a final decision as to the financial distribution. When the husband committed suicide the husband’s estate sought to dismiss the divorce case as having been abated by the death. Not only did the court find that the divorce action did not abate since the action was essentially completed, it also found that the husband would not be allowed in equity to defeat the wife’s equitable distribution claims by deliberately causing his own death.

Estate Settlement and Estate Administration often involve the resolution of many issues including the status of a decedent’s next of kin which includes a surviving spouse. I have represented many clients in estate mattes where kinship and spousal issues are important in determining the manner in which estate assets are to be distributed.

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A New York Estate is subject to potential estate taxes. The tax is imposed under both Federal and New York State laws. The New York Probate Lawyer Blog has previously talked about estate taxes. It is the duty of an estate fiduciary such as an Administrator or Executor to determine whether a decedent’s estate must pay any estate tax and to actually pay the tax.

Both the Federal and New York estate tax is due to be filed and paid 9 months following a decedent’s date of death. An automatic extension of 6 months is available to file the tax return. The information required to be reported is a detailed list of all of the assets, debts, expenses and other financial data that provide an economic snap-shot of an estate.

Estate assets are typically valued as of the decedent’s date of death. This gross estate includes all items owned or controlled by the decedent or in which the decedent had an interest as of his death. Such assets include bank accounts, real estate, stocks, bonds and other items having value such as copyrights, trademarks and membership interests in businesses like a partnership or limited liability company.

During the course of estate settlement, it may be easy to obtain date of death values for assets such as bank accounts, real estate, stocks and bonds. Other items such as business interests may be difficult to value and subject to dispute. Upon the review or audit of an estate tax return, the Federal or State tax authorities may contest the value of an asset or deductible expense or liability.

An example of such estate tax dispute is presently occurring with the estate of the late pop star Michael Jackson. As reported by Patrick Temple-West in Reuters.com on August 23, 2013, the IRS claims that the Jackson estate owes Federal tax and penalties of $702 million. In the article “US Agency says Michael Jackson estate owes $702 million in taxes“, it is reported that the estate claimed in its tax filing, among other things, the image and likeness of Jackson had a value of only $2,105 while the IRS placed its value at $434 million.

Similar tax disputes can arise concerning the value of estate tax deductions such as liabilities, debts or expenses incurred in estate administration. As can be seen, potential estate taxes should be a major consideration in estate planning. This is particularly so when a large estate tax liability is expected and there are limited liquid assets available to pay the tax bill. Since the taxes need to be paid within 9 months after a death, there may be very little time to sell such items such as real estate or a cooperative apartment in order to obtain the funds to pay the tax. In many instances the use of life insurance or other pre-death financial planning can help solve this post-death liquidity dilemma.

At the present time, the Federal estate tax exemption is $5,250,000 and the New York exemption is $1,000,000. Also, both jurisdictions allow an unlimited marital deduction. However, the challenge presented in an estate plan is to limit the tax liability when a potentially taxable estate is to be ultimately paid to a non-spouse. In such situations the taxable amounts cannot be protected by the marital deduction.

It is essential that a New York Estate Planning attorney be provided with information regarding a person’s asset values and possible estate tax deductions. In this manner the appropriate tax plan and beneficiary designations can be formulated in documents such as a Last Will or Living Trust.

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Article 81 of the New York Mental Hygiene Law (“MHL”) contains the provisions regarding the appointment of a Guardian for a person who is incapacitated. The New York Probate Lawyer Blog has previously discussed that the statute provides powers for a Guardian for property management (MHL 81.21) and for personal needs (MHL 81.22).

In most Guardianship proceedings the Court will appoint a Court Evaluator (MHL 81.09). A Court Evaluator is named in the Order to Show Cause that is signed by the Court when the Guardianship case is commenced. The Court Evaluator’s job is essentially to perform an investigation of the case and prepare a written report and recommendation for the Court. This investigation and report concerns such issues as the incapacity of the person alleged to be in need of a Guardian, the nature of such person’s property and assets and who is the most appropriate person to be appointed as Guardian.

In many instances the time expenditures for a Court Evaluator to perform a full investigation, prepare a report, and attend all Court hearings can be quite extensive. This is especially so when the Guardianship proceeding is contested. A Contested Guardianship Proceeding can involve issues regarding whether the alleged incapacitated person actually needs a Guardian or there may be intra-family fighting as to which family member is most appropriate to be appointed as Guardian.

Regardless of the complexity of the case, the Court Evaluator is usually entitled to be paid a fee for the services incurred in performing the job. MHL 81.09(f) states that when the Court appoints a Guardian and grants the petition, the Court can award a reasonable fee to be paid from the incapacitated person’s assets. However, when the Guardianship application is denied, the Court may direct that a Court Evaluator’s fee be paid from the alleged incapacitated person’s assets and/or directly by the person who commenced the proceeding.

Sometimes, the alleged incapacitated person dies during the Guardianship case. In this circumstance, the statute provides that the Court may award a fee to be paid by the person’s estate and/or the petitioner. A recent case decided by Justice Alexander W. Hunter, Jr. (Supreme Court, Bronx County) entitled Matter of Soto, decided on August 2, 2013 and reported in the New York Law Journal on August 29, 2013, concerned this latter situation. In Soto, the Court had issued an Order and Judgment appointing a Guardian and had awarded a fee to the Court Evaluator. However, before the Guardianship actually commenced the incapacitated person died. Therefore, the Guardian could not pay the Court Evaluator’s fee. Thereafter, when the Court Evaluator made an application to the Court to have the petitioner personally pay the fee, the Court denied the application and directed the Court Evaluator to file a claim in the Surrogate’s Court against the incapacitated person’s estate for payment of the fees.

Guardianship cases can be very complicated and require the assistance of an experienced New York Guardianship Attorney. I have represented clients who have filed petitions to be appointed as Guardians for family members and friends. All aspects of these matters need to be considered including the necessary proof of incapacity and the manner in which expenses such as Court Evaluator’s fees are to be paid.

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