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shutterstock_1403735534-300x200There are some very basic rules regarding the handling of a New York estate.  Initially, a determination needs to be made as to whether or not a decedent had a Last Will and Testament or died intestate.  If there is a Will, then a probate proceeding is filed with the Surrogate’s Court.  In the event there is no Will, then a petition is filed to obtain letters of administration.  The New York Probate Lawyer Blog provides extensive articles regarding both of these types of procedures.

Regardless of the nature of the proceeding that is being presented to the Surrogate’s Court, it is imperative that the information given to the Court be as complete and accurate as possible.  The primary document which contains the essential substantive information is the petition which would typically be either a probate petition or petition for letters of administration.

The above petitions require various items of data such as the name and address of the petitioner, the name and residence address of the decedent, and date of death.  Information is also needed as to the approximate value of the estate.  This is required so that the Court can assess, among other things, the amount of the filing fees and the amount of the surety bond to be required if the Court decides that a surety bond is necessary.  Bonds are most often required in intestate administration proceedings since most Wills contain a provision waiving the filing of a bond by the named executor.

shutterstock_434643370-300x225Kinship in New York is always an important factor affecting estate settlement.  Most of the proceedings in the Surrogate’s Courts require that a decedent’s distributees or next of kin be included as interested parties.  For instance, where a person dies intestate without a Last Will and Testament, the estate is distributable to distributees according to Estates, Powers and Trusts Law Section 4-1.1 entitled “Descent and distribution of an intestate estate.”  The persons who have a right to be appointed as administrators in an intestate estate are similarly established pursuant to their status as next of kin in accordance with Surrogate’s Court Procedure Act Section 1001 entitled “Order of priority for granting letters of administration.”

In a situation where a decedent leaves a Will, all of the decedent’s distributees must be identified in a probate petition and provided with notice of the probate proceeding.  The reason for this is that the distributees have a right to contest a Will.  If a Will is determined to be invalid, the estate would then pass to the next of kin through intestacy.  The New York Probate Lawyer Blog has published numerous blog posts regarding probate and intestate estate administration.

Proving kinship is usually a difficult process.  Marriage records, birth certificates, and other documentary evidence, as well as testimony from individuals with first-hand knowledge of a decedent’s family, are required.  Due diligent efforts must be made to obtain this information.  In the case of a non-marital person, the job of establishing paternal kinship is even more difficult.  The important statute dealing with this issue is EPTL 4-1.2 entitled “Inheritance by non-marital children.”  This statute describes the various avenues for proving such kinship.

shutterstock_330039464-300x200The settlement of an estate in New York involves many facets.  Of course, in its initial phase, the appointment of a fiduciary such as an executor or administrator needs to occur.  Thereafter, the fiduciary engages in the process of identifying and collecting assets, paying or resolving claims, debts or other estate obligations, and then, ultimately, making distributions to the estate beneficiaries.  If a decedent had a Last Will and Testament, then the distribution of estate assets is made according to the terms of the Will.  When there is no Will and a decedent dies intestate, distribution is made in accordance with Estates, Powers and Trusts Law Section 4-1.1 entitled “Descent and distribution of a decedent’s estate.”  The New York Probate Lawyer Blog contains many articles regarding the settlement of a decedent’s estate.

One type of asset which is sometimes overlooked in the estate planning process is tangible personal property.  This asset can be comprised of all sorts of items such as furniture, jewelry, artwork and similar items.  When preparing an estate plan, an estate planning attorney can include provisions in a Will whereby items of property can be specifically bequeathed to named individuals.  For example, a diamond ring can be given to a named child or friend.

It should be noted that EPTL Section 5-3.1 entitled “Exemption for benefit of family,” provides that some of these property items are set aside for a surviving spouse or children under age 21 such as household furniture, musical instruments and appliances, as well as a motor vehicle having a value not exceeding $25,000.00.  These items are not considered to be estate assets.

shutterstock_1010278675-300x200A very common issue that arises in estate litigation concerns pre-death transfers of assets.  When a person prepares a Last Will and Testament, this document only controls assets which are owned by a decedent at the time of death.  If an asset is transferred or re-titled into the name of another person prior to death, it is not part of the decedent’s estate whether he dies with a Will or intestate.  While property owned by a decedent at death may be intended for post-death distribution to certain individuals, a pre-death transfer very often changes or circumvents such distributions.  As a result, potential post-death beneficiaries often object to having their inheritance side-tracked by a lifetime transfer which occurs shortly before a decedent’s demise.  The New York Probate Lawyer Blog discusses many types of Surrogate’s cases regarding property transfers.

This scenario is precisely what occurred in a recent Queens estate case entitled Matter of Varrone, decided by Queens Surrogate Peter Kelly on June 17, 2021.

In Varrone, the decedent died leaving five children.  A number of years before her death, the decedent, through a series of deeds, transferred her home to just one of her sons, John.  She also prepared a Last Will leaving her estate to John.  Following the decedent’s death, another son, Charles, commenced estate litigation and sought to void the pre-death transfer of the home to John.

shutterstock_199873709-300x200When an executor or administrator is appointed to settle an estate, there are many tasks which need to be accomplished.  Among the most basic fiduciary duties is the collection of assets and the resolution or payment of the decedent’s debts and monetary obligations.  The New York Probate Lawyer Blog discusses many of these matters in numerous posts.

While the payment of debts may seem rather routine, the process can be very difficult.  To begin with, the estate representative must identify the debts and obligations which exist.  These may include credit card or other credit obligations such as mortgages, car loans, stock margin accounts, home equity or other lines of credit.  These types of items may be easy to discover and to determine the extent of a claim since there are typically periodic account statements sent showing the outstanding balance.

In many cases the decedent’s obligations may be more difficult to discern and quantify.  There may be business debts or obligations to third parties involved in business transactions which are reflected in various agreements which are not apparent without a careful review of the decedent’s records.  Obligations may also exist as a result of a past divorce or matrimonial pre-nuptial or settlement agreement.  Such obligations may be binding upon a decedent’s estate as to future payouts or result in claims due to the decedent’s failure to make past due payments.

Fiduciary-300x185The Surrogate’s Court Procedure Act (SCPA) Section 103 entitled “Definitions” provides a definition for “Fiduciary” at paragraph 21.  The term includes an expansive list of titles including administrator, executor, guardian, and testamentary trustee.  Someone acting in a fiduciary capacity to another generally means that such person owes certain legal responsibilities to the party for whom they are acting or based upon the parties’ relationship.  Someone who is a Guardian for an incapacitated person in an Article 81 Guardianship, as well as an agent appointed under a Durable Power of Attorney stands in a fiduciary relationship to the person for whom they have accepted responsibility to perform certain tasks or acts.

Responsibilities flow from the authority given to a fiduciary either from the document which defines the manner or scope of the powers and also from the various statutes and rules and guidelines a fiduciary must follow.  For example, an Article 81 Guardian typically derives the extent of authority from the Order and Judgment appointing the Guardian.  Also, Article 81 of the Mental Hygiene Law (MHL) sets out certain powers that a Guardian may possess.  MHL Section 81.20 lists “Duties of Guardian” while section 81.21 sets forth “Powers of guardian; property management” and section 81.22 provides for “Powers of guardian; personal needs.”  Similarly, with respect to the estate laws, Estates, Powers and Trusts Law Section 11-1.1 provides an expansive list of “Fiduciaries’ powers.”

Thus, an executor or administrator in settling an estate needs to be aware of their responsibilities.  Another area which is always a topic of discussion is the fees that can be paid to a fiduciary for acting in such capacity.  These fees, called commissions, are meant to compensate someone for accepting and performing the job as trustee, guardian, administrator or executor.  The SCPA contains a number of sections which set out the manner by which commissions are allowed and computed.  For instance, SCPA Section 2307 sets forth the commissions to be paid to fiduciaries which are not trustees, while SCPA 2309 gives commissions for trustees for trusts created after August 31, 1956.  MHL Section 81.28 gives information as to “compensation of guardian.”

One of the most important benefits from engaging in estate planning and creating a Last Will and Testament is that a testator can select and name an executor and alternate executor.  This is important since the person nominated to act as fiduciary is someone whom the testator trusts and intends to be in charge of settling an estate.  Additionally, by nominating a person to be an executor, the nominee has the right to be appointed as the Preliminary Executor in the event the probate of the Will is delayed due to issues such as a Will contest or locating a decedent’s next of kin.

When a Will is not created and a decedent dies intestate, the appointment of an Administrator is controlled by the estate laws.  New York estate lawyers turn to Surrogate’s Court Procedure Act Section 1001 entitled “Order of priority for granting letters of administration,” to determine which individual has the right to be appointed.  The New York Probate Lawyer Blog contains numerous articles regarding the estate administration process.

As can be expected, the priority for appointment as Administrator is given to a decedent’s surviving spouse, followed by children and then other descendants.  While the statute appears straightforward, its provisions inherently allow for controversy when there is more than one person who has a right to be appointed and the eligible parties do not agree to work together.  This situation is very common when the eligible parties are a number of children since each one has a right to act as Administrator but they do not get along.  Thus, the Surrogate’s Court may be confronted with competing petitions for appointment and allegations that competing parties are not qualified to act for one reason or another.  While a majority of the eligible parties may choose to elect one of the group, the ultimate resolution must be determined by the Court.

shutterstock_1010278675-300x200The administration and settlement of an estate in New York requires that the fiduciary perform many tasks.  Initially, the first hurdle that must be overcome is the actual appointment process.  When a decedent dies leaving a Last Will, the Will must be probated and the Court can appoint an Executor.  Where the decedent dies intestate, a proceeding to appoint an administrator is filed instead of a probate proceeding.  The New York Probate Lawyer Blog contains many posts discussing the probate process and intestate proceedings.  In the event there is a Will contest or Surrogate’s Court litigation regarding the administrator’s appointment, the estate may not have a fiduciary appointment for a period of time.  Applications can be made to the Court for the appointment of a Preliminary Executor or Temporary Administrator.

A Court appointed fiduciary is the only person who has authority to deal with the affairs that are strictly related to the decedent.  The fiduciary can collect assets that are in the decedent’s sole name and pay or compromise debts or claims which relate to the deceased.  Another important aspect of an appointment is that the Administrator or Executor can access the decedent’s safe deposit box and residence.  Taxes are an additional area where a fiduciary is important since he can sign the decedent’s outstanding income tax returns and also any estate tax returns which may need to be prepared and filed.  In fact, an estate representative may become personally liable if he fails to finalize and pay various tax obligations relating to the decedent.

There are other areas where the need for a fiduciary is essential.  For example, a number of recent Court decisions provide excellent examples of the essential role a duly appointed executor or administrator play in estate settlementKew Gardens Dev. Corp. v. Butcher involved a Brooklyn estate and was decided by Brooklyn Surrogate Margarita Lopez Torres on May 13, 2021.  In Kew Gardens a dispute arose concerning the ownership of certain real estate and the various rights which the parties held pursuant to a certain deed and inheritance status.  The relevant portion of the case for our reference is that the Court held that the duly appointed Executor who had received letters testamentary was the only person who had the legal authority to convey the decedent’s interest in the property.  The Court also stated that this exclusive right did not diminish over time.

shutterstock_74680495-2-300x200Disputes regarding estates occur all the time.  These matters play out in the New York Surrogate’s Courts which is the primary forum where a decedent’s estate issues are determined.  Estate lawyers in New York are familiar with all types of cases ranging from Will contests to the appointment of an administrator in the event of intestacy.  A recent internet search disclosed that a prevalent area of dispute involves siblings.  In fact, according to a reference to research performed by Ameriprise, 70% of the conflicts between siblings are related to their parents.

When it comes to estates, siblings may have conflicts over many things.  For example, a brother or sister may feel that they were treated unfairly in a parent’s Last Will especially if their bequest was small or they were disinherited.  In these types of cases a parent may have had good reasons to treat their children differently – one child may be well-off and another may need the extra support to survive.  It is not uncommon for a child to be estranged.  I represented a named executor in upholding the validity of a Will where a disinherited child filed objections to probate even though the child had virtually no contact with the decedent for decades.

On the other hand, a sibling may have very legitimate complaints where another sibling appears to have taken advantage of an older and ill parent to unduly influence the creation of a new estate plan in his favor.  Undue influence is always difficult to prove but facts which show a decedent’s susceptibility and opportunity for wrongdoing often lead to estate litigation.  Sometimes a sibling may arrange for a transfer of a parent’s assets even before death.  These situations often result in the commencement of an Article 81 Guardianship proceeding to have a Court supervise the parent’s assets during his lifetime and prevent improper transfers or dissipation.  The New York Probate Lawyer Blog contains many articles discussing Guardianships.

shutterstock_199873709-300x200Executors and Administrators of a New York estate bear a great responsibility with regard to their handling of a decedent’s affairs.  From the surface it appears rather straightforward that the estate fiduciary needs to identify a decedent’s assets and arrange for their collection.  Similarly, debts and expenses must be found and satisfied.  The New York Probate Lawyer Blog contains numerous posts discussing trust and estate matters.

However, the administration of an estate requires that the fiduciary thoroughly investigate a decedent’s personal affairs in order to achieve a complete estate settlement.  For example, determining basic facts regarding a person’s kinship may be difficult where a decedent has lost or avoided all contact with family members for decades.  While the decedent may not have wanted anything to do with his family members, a nominated executor will need to dig into the history of the next of kin so that the jurisdiction of the probate proceeding can be completed.  As an estate lawyer, I have been involved in many cases where more information about kinship is learned than was ever known by the decedent.

Similarly, the fiduciary of an estate may need to deal with issues that have plagued a decedent for years and which he refused or could not resolve.  It is not uncommon where a person dies and owns a business that the partners or co-owners could not get along or were antagonistic toward each other.  The fiduciary is compelled to find a resolution to such problems since the estate’s interest in the business asset needs to be protected and placed into some proper form so it can be transferred to beneficiaries under a Last Will or to intestate heirs.

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