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rendered-300x107Part of the estate planning process involves the creation and execution of advance directives.  These documents include a Power of Attorney, Living Will, Health Care Proxy and Living Trust.  One of the primary goals of these papers is for the creator to provide specific instructions for property management and personal care in the event he is unable to handle such matters due to incapacity or other circumstances.  In Article 81 Guardianship proceedings, the Guardianship Court will look to see if there are any advance directives in place.  If so, the Court may dispense with the appointment of a Guardian.  However, even where advance directives exist, Mental Hygiene Law Section 81.29 authorizes the Court to revoke advance directives if it finds wrongdoing such as undue influence.  The New York Probate Lawyer Blog has published many articles regarding advance directives.

One advance directive, a Power of Attorney, allows a person to make various property management decisions as an agent for the person who creates the documents.  These property matters are listed in the power and include the authority to handle real estate transactions, banking transactions, insurance transactions and business operating transactions.  The creator may choose which areas to grant authority and can modify the manner in which the authority is to be exercised.  There can be one agent or multiple agents who can act separately or together depending upon the written instructions.

As can be expected, the use of a power of attorney is sometimes abused and agents may take advantage of their power for their own benefit.  Courts tend to be very cautious regarding these matters and there tends to be a great deal of litigation in the Surrogate’s Court and the Guardianship Court concerning the proper exercise a power of attorney.

accounting-300x199The estate settlement process in New York can be viewed as having three parts.  At the outset, there are proceedings for the appointment of an estate fiduciary.  If a decedent dies with a Last Will and Testament, then a probate case is filed in the Surrogate’s Court.  When there is no Will, a decedent is deemed to have died intestate and a proceeding for letters of administration is commenced.  Both probate and intestate administration matters may be very complicated and take a great deal of time to complete.  Issues concerning will contests and kinship determination involve extensive estate litigation.  The New York Probate Lawyer Blog contains many articles discussing probate, intestacy and Surrogate’s Court matters.

The second part of estate settlement involves the actual administrative acts to complete the estate.  These include identification and collection of assets and reviewing and finalizing debts and claims.  Also, a fiduciary may need to prepare and file tax returns concerning income tax and estate tax.  Sometimes there are litigation issues relating to the decedent’s creditors or business affairs.

Finally, in order to close the estate, a fiduciary must provide the estate beneficiaries with an accounting of his actions.  An accounting contains all the information regarding the amounts collected and disbursed during the administrative period.  Most estates are settled informally.  This means that the beneficiaries receive an accounting and sign a release form without the necessity of a formal accounting proceeding in the Surrogate’s Court.  However, there are times when a formal Court accounting case is required.  During the accounting proceeding, the Court may consider many different types of issues and objections.  These can range from objections regarding expenditures by the fiduciary to kinship issues and matters regarding claims by a third party.  In effect, the accounting proceeding is the vehicle by which all estate matters can be concluded so that a final distribution can be made to beneficiaries and an estate can be closed.

shutterstock_94407685-300x200A lot of time and effort may be expended with regard to creating an estate plan.  Documents such as a Last Will and Testament, Living Trust, Health Care Proxy, and Power of Attorney require that the creator consider the various provisions and persons to be named as beneficiaries, agents or fiduciaries.  Additionally, the papers must be executed in a manner so that they are to be effective when needed.

With regard to a Will, execution requirements are delineated in Estates, Powers and Trusts Law Section 3-2.1 entitled “Execution and attestation of wills; formal requirements.”  The New York Probate Lawyer Blog has published many articles discussing the various aspects of Will execution along with issues such as probate and Will contests.

After a Will has been effectively executed, it may be necessary to have it changed or revoked.  Additionally, after the death of a decedent, issues may arise as to whether the Will was revoked and, therefore, should not be admitted to probate.  There are some provisions in the New York estate laws which deal with these matters.  EPTL 3-4.1 entitled “Revocation of wills; effect on codicils” provides a number of rules.  The statute begins a by providing that a Will can be revoked or altered, provided a testator intends to do so, by the execution of another Will.  There is also a provision which provides that a revocation can occur through acts such as tearing, burning, obliteration or mutilation.

shutterstock_635914376-300x144The appointment of an Article 81 Guardian in New York is a serious process.  Each case begins with the preparation of a Verified Petition which provides details regarding the condition and circumstances of an alleged incapacitated person (AIP).  The Court needs to be informed about the person’s family, assets and overall ability to handle activities of daily living.  Additionally, information regarding the petitioner and his relationship with the AIP is important.

Also, the petition must provide details regarding any advance directives such as a power of attorney, living trust or health care proxy.  The Article 81 statute provides a number of provisions to insure that the Court is fully informed and that the rights of the AIP are protected.  There is always a concern that a Guardianship may be used to take advantage of someone who cannot protect their own interests.  Mental Hygiene Law (MHL) Section 81.09 entitled “Appointment of court evaluator” details the process for the designation of such person.  Essentially, a court evaluator is someone chosen by the Court to investigate the factual background of the Guardianship case as an impartial observer.  After the investigation is completed there is a report presented to the Court for review along with various recommendations.  The recommendations relate to whether a Guardian should be appointed and, if so, who should be appointed.  MHL 81.09 provides a long list of the Evaluator’s duties which includes interviewing the petitioner and other persons involved in the case.  Also, the Evaluator explains to the AIP the possible consequences and the nature of the Guardianship proceeding.

Although the personal medical records of an AIP may be privileged and not disclosed in a hearing, the Evaluator may obtain permission from the Court to review these items.

shutterstock_434643370-300x225Time and again, the New York Probate Lawyer Blog has published articles discussing the manner in which the issue of kinship can affect estate administration.  The reason kinship is important is because in both probate and intestate estate cases, the Court must receive complete information regarding a decedent’s distributees.

The probate process necessitates full kinship information because a decedent’s distributees have a right to be notified about a Last Will and Testament being filed with the Surrogate’s Court for admission to probate.  Distributees can either execute a Waiver and Consent form or they must be served with a Probate Citation.  If the distributees feel that the propounded Will is invalid, they can file objections.  Objections to probate can be based upon improper execution, lack of testamentary capacity, undue influence, fraud or other grounds.  If the Will is not admitted to probate, the distributees would inherit the estate.

In intestate matters, kinship is essential since the decedent’s distributees are the individuals who have a right to receive a share of the estate.  Also, a distributee has the right to be appointed as an estate administrator.

Estate-Administration-300x200There are many issues associated with the settlement of a New York estate.  In many cases it is not clear as to who is the authorized or designated person entitled to administer an estate.  If a decedent left a Last Will and Testament, the document typically nominates an Executor to handle estate affairs.  When a decedent dies intestate without a Will, usually the next of kin step forward and take action to receive letters of administration.

However, there are frequent situations when there is no Will and no one takes any action to begin estate settlement.  In these cases, a Public Administrator accepts the role of handling an estate.  A Public Administrator is a government official whose job it is to administer the estates of people where there is no one either willing or eligible to do so.  Each county has its own separate official.

When an estate is un-administered for a period of time, it may be subjected to adverse consequences.  For example, taxes may go unpaid and there may be penalties and interest charges.  Mortgages may be delinquent and a foreclosure can occur.  One of the duties of an estate fiduciary is to collect and protect assets.  Also, an estate administrator, like a Public Administrator, needs to determine the identity of a decedent’s distributees (next of kin) so that a proper distribution of estate funds can be made.  All of the aspects of finalizing an estate can become very involved.

shutterstock_1465659569-300x201In situations where a person is in need of assistance with handling personal needs or property management, the New York law provides for the appointment of a guardian.  Article 81 of the Mental Hygiene Law (MHL) contains the statutory and procedural rules regarding guardianship appointment and operation.

Essentially, under MHL 81.02, a guardian may be appointed when it is found necessary to provide for a person’s personal needs or property management.  Usually, a determination of incapacity is needed.  Incapacity must be shown by clear and convincing evidence and involves a finding that a person will suffer harm because they cannot understand and appreciate the extent of their disability.  The New York Probate Lawyer Blog has published many articles discussing different aspects of the guardianship law and process.

A guardianship must be commenced in the Court and all interested parties need to be notified.  Typically, the Court will appoint an attorney to represent the alleged incapacitated person and also a Court Evaluator.  The Court Evaluator investigates the facts and circumstances surrounding the guardianship petition and provides the Court with a report and recommendations.  MHL 81.21 lists various property management powers which can be given to the guardian.  MHL 81.22 lists various personal needs powers which a guardian may have.

Probating a Will in New York requires that the document satisfy the Court requirements for authenticity.  In other words, a Last Will must be executed in the manner required by the Estates, Powers and Trusts Law.  This requires a writing and at least two witnesses.

In addition to the basic statutory directives, the Surrogate’s Court may be shown that a decedent had testamentary capacity and was not subject to undue influence.  Testamentary capacity typically concerns whether a person recognized that he was signing a Will and had knowledge concerning the natural objects of his bounty (i.e., his family and friends) and also was aware of his assets.  This basic knowledge reflects on a person’s ability to dispose of an estate.

When it comes to the area of undue influence, the effect of such a factor becomes much less defined and many times more difficult to determine.  Undue influence concerns influence which a person normally would not succumb to, absent other factors.  These other factors may be susceptibility due to old age or illness or even dependence.  The prevailing factual climate and circumstances surrounding a decedent at the time of signing a Will may involve numerous events.  Motive and opportunity are always considerations.  The New York Probate Lawyer Blog has many articles concerning Will contests and probate.

original_1074565532-300x107When a person dies leaving a Last Will and Testament, he is said to have died testate.  This is unlike a situation where there is no Will.  In such case, the person is said to have died intestate.  In order for a Will to control the disposition of a decedent’s estate, the document must be filed with the Surrogate’s Court and validated as being authentic.  This is known as the probate process.  The New York Probate Lawyer Blog has published numerous articles containing information about all aspects of probate in New York.

In the typical case, a Will contains many different provisions concerning the disposition of a decedent’s assets.  There may be specific bequests, the creation of testamentary trusts and residuary dispositions.  Additionally, a Will typically has a provision in which the proposed executors, and if appropriate, trustees are identified.  The designation of fiduciaries and substitute appointments by a testator is very important because it gives priority to the named persons to act in the capacity for which they are nominated.  The Courts are very protective regarding respecting these appointments because the goal is to have the decedent’s choices honored unless there is a very good reason for deviation.

Sometimes, the admission of a Will to probate can be delayed due to a Will contest or other issues such as a kinship determination.  If this happens, Surrogate’s Court Procedure Act Section 1412 entitled “Preliminary letters testamentary” provides the procedure for the appointment of a Preliminary Executor.  A Preliminary Executor can be appointed by the Court to act temporarily before probate is complete.  Such appointment insures that estate settlement can go forward and assets can be protected and collected during the time the full probate is being completed.  A preliminary executor essentially has all of the powers and authority as a permanent executor except for the authority to make distributions to beneficiaries.  Obviously, this is very beneficial to the estate.  Also, the Will may have a provision for the waiving of a bond by the executor.  The Surrogate sometimes requires the preliminary executor to post a surety bond.

Estate-Administration-300x200The commencement of a proceeding to initiate the settlement of a decedent’s estate requires a determination of the proper Court to accept the filing of papers.  Upon the death of a decedent, it is first necessary to find whether the decedent had prepared a Last Will and Testament or died intestate.  This information will allow a petitioner to properly prepare either a petition for probate to receive letters testamentary or a petition for letters of administration.

Additionally, a finding must be made before a filing as to the jurisdiction in which the decedent was domiciled.  Domicile involves more than just residence.  A person can have multiple residences in different states or even countries.  However, there is only one place of domicile which is where a decedent maintained his primary home.  Usually domicile is easy to locate since a decedent would file taxes, have a place of business or employment, maintain bank accounts and have other local connections.  There are occasions when such a determination may be more difficult to finalize.  Domicile is important because the place of domicile, for the most part, will determine the local estate laws which apply to the estate.  Also, the Court in the place of domicile is usually the proper forum to file the estate proceeding.  The New York Probate Lawyer Blog has discussed the issue domicile in earlier blog posts.  Disputes regarding domicile may involve substantial issues of estate rights.  For example, a spousal right of election may have different benefits in one jurisdiction as opposed to another.

In addition to domicile, an issue may arise as to the appropriate local Court to file the estate papers.  Thus, when there is a domiciliary of New York State, is it proper to file papers in the Queens Surrogate’s Court, or should the papers be filed in Manhattan Surrogate’s Court?  Again, a review of the decedent’s domicile location becomes important.

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