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Fiduciary-300x185When proceedings are filed in Surrogate’s Court regarding a decedent’s estate, the primary focus is inevitably on the person who is, or is seeking to be, the estate fiduciary.  In cases of intestacy, there may arise issues regarding the qualification of the individual seeking to be appointed as administrator.  Similarly, if the decedent died leaving a Last Will and Testament, the person applying to be appointed as executor also must meet certain qualifications.

It is not usual for other family members or interested parties to file objections with the Court regarding the appointment of the petitioning party.  These issues may also arise during the course of estate settlement where persons who are estate beneficiaries seek to remove an already-appointed fiduciary due to claimed wrongdoing or breach of fiduciary duty.  Such alleged conduct can include loss or waste of estate assets, undue delay in settling estate affairs or conflicts of interest regarding the disposition of assets or inequitable treatment of beneficiaries’ interests.

In all of these types of cases, the Court is very cautious regarding the disqualification or removal of an administrator or executor.  There is great preference afforded to the choice of a fiduciary, such as an executor, by a decedent.  Also, there is a statutory designation as to whom has priority to be appointed as administrator of an intestate estate.

Kinship-blue-200x300There are many instances where a person dies intestate, without a Last Will and Testament.  When this occurs, a decedent’s estate is distributed to his next of kin or distributees pursuant to the priorities established under 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 concerning intestate estates and the appointment of administrators in these cases.

Surrogate’s Court Procedure Act Section 1001 entitled “Order of priority for granting letters of administration” sets out the persons who are entitled to be appointed as estate administrator when there is no Will.  Of course, if a person leaves a Will, the Will provisions provide for the appointment of executors which typically negates the need to rely on SCPA 1001 for the appointment of a fiduciary.  Preparing a Will which then is probated avoids some of the issues in Surrogate’s Court relating to intestacy.  The presence of a Will also may facilitate estate settlement.

When there is no Will and the identity of a decedent’s distributees are unknown at the outset, generally, the Surrogate will appoint a local public official called the Public Administrator to administer the decedent’s estate.  This may also occur when the closest known next of kin are cousins or more distant relatives.  While kinship issues may arise in probate proceedings, usually there is a nominated executor who can handle estate affairs while the kinship issues are determined.

nycSurrogatesThe process of administering an estate in the Surrogate’s Court may involve numerous proceedings.  Initially, it may appear that only two main proceedings exist when a person dies.  One type of proceeding is called probate.  This situation arises when a person leaves a Last Will and Testament.  A Will must be admitted to probate in order for its provisions to take effect.

Another type of proceeding is known as administration.  This occurs when a person dies intestate – without leaving a Will.  In these cases, the decedent’s next of kin are designated in the estate laws to receive a share of the estate.

While these two proceedings dominate what is typically viewed as an estate case, there are numerous other proceedings which may occur in Surrogate’s Court.  For example, a person may commence a proceeding to compel a third party to file a Will with the Court.  Also, before an estate is settled, there may need to be a kinship proceeding to determine a decedent’s heirs.  Kinship cases can take place inside both probate and intestate administration matters.  Additionally, an accounting proceeding may be needed to finalize an estate and determine the shares of an estate to be distributed.

Spousal-Rights-300x181A very common aspect in New York estate settlement and estate litigation concerns the rights of a surviving spouse.  The New York Probate Lawyer Blog has published numerous posts concerning spousal rights and decedent’s estates.

Estate lawyers in New York are aware that state statutes such as the Estates, Powers and Trusts Laws (EPTL) and the Surrogate’s Court Procedure Act (SCPA) provide a surviving spouse with certain preferential rights.  For instance, if a person dies intestate without a Last Will and Testament, EPTL Section 4-1.1 entitled “Descent and distribution of a decedent’s estate” provides that a surviving spouse receives the first $50,000.00 of the estate and fifty percent (50%) of the balance of the estate to be distributed.  Also, if a decedent leaves a Last Will but fails to provide for a spouse, EPTL Section 5-1.1-A entitled “Right of election by surviving spouse” allows a disinherited spouse to elect to receive one-third (1/3) of the estate.  This election includes assets defined as testamentary substitutes which include items such as joint assets.

Spousal rights are provided in other areas such as estate tax.  For both New York and Federal estate tax, generally, all assets left to a surviving spouse are subject to a full marital deduction and not subject to estate taxation.

Probate-2-300x200Estate planning in New York can include the preparation of a number of documents.  A person may create a Last Will and Testament, a Power of Attorney, a Living Will, a Living or Grantor Trust and a Health Care Proxy.

The most basic paper which should be considered is the Last Will.  This is the document which sets forth the testator’s intentions regarding the disposition of the probate estate.  It should always be kept in mind that a Will controls the disposition of assets held in a decedent’s name alone.  Assets which are transferred by operation of law such as joint assets are not controlled by the Will provisions.  The same concept applies to items such as life insurance or retirement accounts which may be paid on death to designated beneficiaries.

The New York Probate Lawyer Blog has published many articles regarding the preparation and probate of Wills.  There have been numerous blog posts concerning the statutory requirements for signing a Will.  These requirements are contained in Estates, Powers and Trusts Law (EPTL) Section 3-2.1 entitled “Execution and attestation of wills; formal requirements.”

nycSurrogatesEstate planning in New York is important for the proper disposition of a person’s assets.  Planning an estate encompasses a broad array of considerations.  The New York Probate Lawyer Blog has published many articles on this topic.  Initially, the preparation of a Last Will and Testament is the central document when creating a plan.  A Will disposes of assets that are owned by a testator at death in his name alone.  Thus, assets which pass automatically to others by operation of law such as joint property or items which have designated beneficiaries such as retirement accounts, life insurance or other pay on death funds, are not generally controlled by the terms of a Will as long as the beneficiary survives a decedent.

In view of various rules regarding property disposition, it is imperative that any estate plan take into account the ownership and title of assets which are intended to be disposed of under a Will.  A recent Manhattan estate case, decided by Manhattan Surrogate Rita Mella on February 23, 2023 entitled Estate of McAulay, demonstrates the issues that may arise when a decedent’s asset ownership conflicts with the provisions of a Will.

In McAulay, the terms of a Will provided for equal distribution of a portion of the decedent’s residuary estate to four (4) individuals.  At the time of death, the decedent owned certain California real estate with one of the beneficiaries as joint tenants.  As a result, the California property passed to the joint owner by operation of law outside of the Will.  An issue was raised as to whether the value of the California real estate should reduce the amount of the share of the residue the beneficiary was to receive.

Estate-Settlement-300x200 There are many different rights which appear in the New York Trust and Estate laws.  The basic statutes concerning estate law and procedure are contained in the Estates, Powers and Trusts Law (EPTL) and the Surrogate’s Court Procedure Act (SCPA).

A surviving spouse of a decedent benefits from a number of provisions in the estate laws.  For example, if a person dies intestate (without a Last Will and Testament), EPTL 4-1.1 entitled “Descent and distribution of a decedent’s estate,” provides that a surviving spouse is entitled to receive, essentially, one-half of a decedent’s estate if there are also surviving children.  In the event no children are surviving, then the spouse has top priority and inherits the decedent’s entire estate.

SCPA 1001 entitled “Order of priority for granting letters of administration,” is another provision where a spouse has priority benefits.  This statute provides that a spouse is to be appointed as the administrator of an intestate estate before any other heir.  The New York Probate Lawyer Blog contains many articles discussing executors and administrators and estate settlement.

shutterstock_74680495-2-1-300x200An interesting aspect of New York estate law and practice is its intersection with other areas of law.  For example, the New York Probate Lawyer Blog contains numerous articles discussing issues concerning the appointment of a guardian for personal needs and property management under Article 81 of the Mental Hygiene Law.  In many cases, a decedent, due to advanced age or disability, may have been the subject of a guardianship proceeding prior to death.  Such proceeding may have dealt with issues regarding a decedent’s capacity or assets which may be directly related to post-death matters concerning the validity of a Last Will and Testament or pre-death transfers of property.

Similarly, prior to death, a decedent may have been involved in a divorce or other matrimonial action which may have been litigated and/or settled.  Issues and factual matters may have been raised in such cases which could impact upon Surrogate’s Court proceedings and the settlement of a decedent’s estate.  As a threshold matter, a divorce would sever and terminate most spousal and inheritance rights between the parties.  Also, matrimonial litigation might disclose the nature and value of assets which may be a part of a decedent’s estate.  These facts might impact both probate proceedings and intestate administration proceedings.

An example of the impact a pending divorce might have on estate administration was recently shown in a Bronx estate case entitled Estate of Wood decided by Bronx Surrogate Nelida Malave-Gozalez on February 3, 2023.  In Wood, the decedent and his spouse had entered into a stipulation of settlement with regard to a pending divorce action.  The stipulation was fully executed.  However, before a judgment of divorce was entered in the divorce action, the decedent died.  One of the primary issues which was presented to the Court was whether the terms of the stipulation were enforceable notwithstanding the death of the decedent.  This was an issue because the basic rule is that the death of a party abates a divorce action unless the entry of the judgment was only a ministerial act to be completed by the Court.

nycSurrogates Major issues that often arise in connection with estate settlement concern the identity and value of a decedent’s property.  In many estates, a decedent engages in estate planning and asset transfers during the months or even days before death.  Estate planning and/or transfers may occur for very legitimate reasons.  Concerns may arise as to tax planning which might include a need to take advantage of a change in tax laws or to account for a change in the value or nature of a decedent’s estate.

In other situations, a person may be experiencing a health or medical concern and desire to formulate a plan which can take advantage of requirements to receive Medicaid or other governmental benefits.  Another basis for a decedent’s planning activities may involve the need to alter beneficiaries or make changes to a Last Will or other documents due to the death or disability of a beneficiary or nominated Executor or Trustee.

As it turns out, many of these pre-death changes may adversely affect the interests to be received from an estate by a potential beneficiary.  A person who may be a possible recipient of a large financial benefit learns that shortly before death, a decedent made changes which drastically reduced his financial beneficial interests.  When this occurs, there is a high probability that estate litigation in the Surrogate’s Court will occur regarding these changes.  This is especially so where a decedent is elderly and experiencing poor health.

shutterstock_74680495-2-300x200The settlement of a New York estate may involve many different proceedings and issues.  Initially, a proceeding needs to be commenced in the Surrogate’s Court to have an executor or administrator appointed to handle estate affairs.  This includes the identification and collection of assets and the payment of claims and expenses.  The New York Probate Lawyer Blog has published many articles discussing estate settlement.

The collection of assets is typically straightforward.  A decedent’s bank account or other financial funds are obtained and deposited into an estate bank account held in the name of the administrator or executor.  If a decedent owned real estate such as a house, the property can be sold so the proceeds can be collected and distributed to the beneficiaries of the estate.

There are occasions when a decedent’s assets are not easily identified or collected.  In many cases, prior to a decedent’s death, assets may have been misappropriated by a third party or transferred to others under questionable circumstances.  It is not uncommon to find that a Durable Power of Attorney was used to withdraw funds before a decedent’s death.  There are many cases involving undue influence and financial or elder abuse whereby a person’s assets may be improperly obtained prior to death.

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