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After the death of an individual, a process of ascertaining and collecting assets needs to commence.  Of course, the appointment of an estate fiduciary, whether executor or administrator, is essential to the asset collection process.  In the event a delay is expected with regard to probating a Last Will or obtaining letters of administration in an intestacy, temporary appointments can be obtained.  In a probate proceeding, the Court can appoint a preliminary executor.  In an administration proceeding, a temporary administrator can be obtained.

One of the most important aspects of estate settlement is to determine which assets are recoverable by the estate.  There are many assets which pass outside of an estate and are not subject to collection by the estate fiduciary.  These items are transferred by operation of law and include joint assets with rights of survivorship, financial accounts which have designated beneficiaries, retirement accounts with named beneficiaries and life insurance with named beneficiaries.  These types of assets are paid directly to the named payees and an estate fiduciary does not collect them.  The New York Probate Lawyer Blog has published many articles concerning estate assets.

Situations arise where an administrator or executor needs to engage in estate litigation in the Surrogate’s Court in order to obtain access to and collect assets which are held by a third party.  One common avenue to recover estate property is by a proceeding under Surrogate’s Court Procedure Act Section 2103 entitled “Proceeding by fiduciary to discover property withheld or obtain information.”  However, in all proceedings in the Surrogate’s Court, the Court must find that it has proper jurisdiction to proceed.  Jurisdictional issues are sometimes complicated.

shutterstock_434643370-300x225The New York Surrogate’s Courts are presented with many different types of proceedings.  Those proceedings include probate cases, intestate administration matters and accounting proceedings, just to name a few.  There is a separate Surrogate’s Court located in various counties throughout the state.  For example, there is the Queens County Surrogate’s Court, Kings County or Brooklyn Surrogate’s Court, New York or Manhattan Surrogate’s Court and the Bronx Surrogate’s Court.

The various matters that appear for determination invariably involve the identification of a decedent’s next of kin, also known as distributees.  For instance, in a probate proceeding, the petitioner must identify, by name and address, the decedent’s distributees.  This information is set forth in the probate petition.  The decedent’s distributees must be made a party to the proceeding and unless they consent to the probate of a Will, they must be served with a Citation.  These parties have a right to contest a Will.

When a decedent dies intestate without leaving a Last Will, distributees have a number of rights.  First and foremost, pursuant to Estates, Powers and Trusts Law (“EPTL”) Section 4-1.1 entitled “Descent and distribution of a decedent’s estate,” next of kin have the right to inherit an estate based upon the priority established in the statute.  Also, Surrogate’s Court Procedure Act (“SCPA”) Section 1001 provides for a list of persons who have priority to be appointed as the estate administrator.  When a decedent leaves a Will, the provisions of the document usually provide for nomination of an Executor.  However, when someone dies without a Will, the New York estate laws provide as to whom will act as the estate administrator.

shutterstock_1010278675-300x200New York estate litigation encompasses many different aspects of trust and estate law.  Controversies may arise in many types of proceedings.  In the case of a probate proceeding, the most obvious area of dispute concerns the validity of a Last Will and Testament.  This type of controversy is known as a Will Contest.  Other aspects of probating a Will which can cause adversarial effects include whether a certain person should be appointed as an Executor.  Issues may also arise as to whether the language in a Will is clear or ambiguous.  A construction proceeding may be needed after probate to settle issues regarding the meaning or intent of Will provisions.  Another area of controversy may involve the right of election provided to a surviving spouse.  A spouse who is disinherited in a Will can file an election to obtain what amounts to one-third (1/3) of a decedent’s estate.  The calculation of a right of election can be complicated.

Intestate administration proceedings also garner a fair share of litigation.  First and foremost, the determination of the kinship of a decedent is needed to determine the identity of the parties to the proceeding and the rightful heirs of an estate.  Also, kinship will provide the status of the persons who have priority to serve as the estate administrator.  These issues can range from whether a person is a distributee or whether an alleged spouse was married to a decedent or divorced or disqualified due to abandonment.

Another area where litigation is common involves estate accounting proceedings.  All beneficiaries are entitled to receive an accounting from an executor or administrator.  Objections to the accounting can be filed concerning the propriety of a fiduciary’s actions.  Claims may be made regarding a breach of fiduciary duty.

Probate-300x201It takes a lot of time and effort to create a New York estate plan.  A testator needs to fully access his assets and make decisions regarding the provisions to include in a Last Will and Testament.  It is important to determine who is to be a beneficiary as well as the portion of the estate each beneficiary is to receive.  Also, executors must be identified and alternative provisions should be included in the event a primary beneficiary predeceases the testator.

Once a person dies, a Will must be probated.  A proceeding is filed in the Surrogate’s Court to have the Will validated so that its provisions become effective.  During the course of the probate proceeding, interested parties may object to the probate of a Will.  In such a case, a Will Contest ensues.  A contested Will case involves specific aspects concerning a Will’s viability.  The New York Probate Lawyer Blog contains many articles regarding probate and Will Contests.

A recent Brooklyn estate case entitled Matter of Grunwald decided by Brooklyn Surrogate Rosemarie Montalbano concerned a contested Will.  In Grunwald, the Will in question was prepared and executed under the supervision of an attorney.  The Court examined various issues surrounding admitting the Will to Probate.  Initially, the Court examined whether the decedent had the requisite testamentary capacity.  Such capacity requires that the testator understood that he was creating a Will as well as being aware of the extent of the testator’s property and the natural objects of his bounty.  Although a person may be old or even suffering from illness such as dementia, capacity may still exist.  The Court in Grunwald found that the testimony of the attorney and attesting witness satisfied the burden of showing capacity.  The Court found that the Objectant did not refute such finding.

original_1074565532-300x107There are essentially two (2) different paths to follow for the appointment of a fiduciary after someone dies.  In order to administer and settle an estate, there must be an executor or an administrator.  If the decedent left a Last Will and Testament, then a probate proceeding is going to be filed in the Surrogate’s Court.  This involves filing the original Will along with a petition for probate and other supporting papers.

In cases where there is no Will, the decedent is considered to have died intestate.  As a result, a petition for letters of administration is presented to the Surrogate’s Court.  The New York Probate Lawyer Blog contains many informative articles discussing issues concerning probate and intestate estate proceedings.

Unfortunately, the process to obtain full letters testamentary or letters of administration can take a number of months.  Will Contests, kinship disputes, and other matters involving estate litigation may delay the finalization of these proceedings for long periods of time.  The dilemma faced by a potential fiduciary and others interested in an estate is how to deal with current problems which can affect estate assets.  For example, there may be pending proceedings in litigation concerning a decedent, or the need to sell or secure assets before values are compromised.

Guardianship-300x201Article 81 of the Mental Hygiene Law contains the provisions regarding the appointment of a Guardian.  As discussed in many earlier posts in the New York Probate Lawyer Blog, the statutes provide for the appointment of a property management Guardian and also for a personal needs Guardian.

When an application is made to a Court for a Guardianship appointment, the Court is provided with a proposed Order to Show Cause and a verified petition.  The information which is to be included in the petition is described in MHL 81.08.  This information includes details concerning both the alleged incapacitated person and the petitioner.  Also, the name, address and telephone number of any proposed Guardian should be supplied along with reasons why the proposed designee is suitable to act as Guardian.

The primary function of the Court in these matters is first and foremost to determine whether the AIP is incapacitated.  Clear and convincing evidence is needed to show incapacity.  MHL 81.02 entitled “Power to appoint a guardian of the person and/or property; standard for appointment” provides the guidance for these issues.  Typically, a person’s functionality and ability to handle activities of daily living are closely examined.

shutterstock_1123004039-300x199Estate planning in New York involves many different aspects.  Initially, a person needs to consider and develop the manner in which an estate is to be distributed.  Decisions need to be made concerning the various beneficiaries who are to receive distributions.  Also, the amount of payment to each beneficiary under a Last Will and Testament must be decided upon.  Another aspect for review involves whether or not a Will should contain a testamentary trust in which the beneficiaries’ share would be held rather than paid out immediately in one lump sum.  A trust can be established for a spouse, child or a third party beneficiary.  Sometimes a Supplemental Needs Trust is established to preserve governmental benefits for a beneficiary with a disability.

An estate plan should be made with attention to estate settlement.  Executors need to be named.  Contingency provisions should be included such as alternate beneficiary provisions in the event of a change of circumstances such as the death of a beneficiary preceding the decedent.

There are situations when the actual provisions of a Will need to be changed either due to circumstances or preferences by the testator.  In these cases, it is essential to remember that all Wills and alterations that are made on Wills must satisfy the requirements of Estates, Powers and Trusts Law Section 3-2.1 entitled “Execution and attestation of wills; formal requirements.”  This provision sets forth requirements regarding the signing of a Will and the need for two attesting witnesses.  Sometimes a person may prepare and execute a Codicil to a Will.  A Codicil is an amendment to a Will which needs to satisfy the EPTL 3-2.1 execution requirements.  Since the Codicil and the original Will need to be read together, there is the possibility that the language in the two documents may be confusing or ambiguous.  In my view, the better course to follow is to prepare a new original Last Will in the place of the old one, incorporating the new provisions.  This way there is less of a chance of confusion and there is no need to locate two documents at the time of probate.

Fiduciary-300x185The acceptance of an appointment as a New York estate Executor or Administrator requires that an individual carry out responsibilities.  The failure to act in a responsible manner could subject a fiduciary to damages for breach of fiduciary duty.  Provisions contained in the Estates, Powers and Trusts Law and the Surrogate’s Court Procedure Act describe various courses of conduct concerning which an executor or administrator should or could be engaged.  For example, EPTL Section 11-1.1 entitled “Fiduciaries’ powers” lists various powers which a fiduciary can exercise when administering an estate.  When a fiduciary does not use his authority in the best interest of the estate, a duty may be breached.  The New York Probate Lawyer Blog contains many articles describing estate administration and the conduct of administrators, executors and trustees.

One of the jobs of a fiduciary is to protect and collect assets.  Sometimes, the decedent’s property may be held by a third party or even misappropriated prior to the decedent’s death.  In these cases, it is the responsibility of the fiduciary to recover the assets for the benefit of the estate.  SCPA 2103 entitled “Proceeding by fiduciary to discover property withheld or obtain information,” provides a procedure for the recovery of estate assets.  My blog has discussed this estate law in a number of previous articles.  A recent Queens County estate case decided by Queens Surrogate Peter J. Kelly dated September 1, 2022 entitled Matter of Stanka Sucich involved a proceeding for the turnover of assets.  In Sucich, the estate administrator sought to recover assets from respondents who had been the decedent’s home health aide and a driver / chauffer.  The major assets sought to be recovered were funds in excess of $200,000.00 which had been transferred before death from the decedent’s individual bank account into an account in the name of the decedent and the home health aide.  When the decedent died, the entire fund was transferred by the home aide into her own name.

Sucich contains an excellent statement of the legal aspects involved in reviewing such a transfer.  For example, the Court noted that once there was a demonstration that the funds belonged to the decedent and were then transferred to a third party, the burden was on the third party to show that the transfer was a valid gift.  A gift requires a showing of intent.  Also, since there appeared to be a confidential relationship between the decedent and the home health aide, there was a need to show that the transfer was fair and understood and free from undue influence.

There are many different obligations and aspects to the role of an estate executor or administrator.  Their primary duty is to collect assets and satisfy estate obligations.  In most instances, the assets owned by a decedent are easily identified and collected, such as bank accounts, real estate, financial accounts and retirement funds.  Likewise, the identification and satisfaction of obligations is typically uncomplicated with regard to items such as credit card bills, car loans, mortgages and other consumer debt obligations.

A recent Manhattan case decided by Manhattan Surrogate Rita Mella on August 18, 2022 entitled “Estate of Buhannic” involved a number of important aspects regarding estate settlement.

In Buhannic, the Court had issued letters to the fiduciaries which contained restrictions prohibiting the fiduciaries from disposing or selling estate assets without the further order of the Court.  This is a common type of restriction which often appears in letters of administration in intestate cases.  Such language requires that the administrator seek Court approval for a transaction.  Thus, interested parties in the estate would receive notice of the request for approval made to the Court and may review the appropriateness of the matter.  Any Objections can then be dealt with.  In the Buhannic case, the fiduciaries sought to sell shares of stock in order to pay estate obligations.  The parties ended up agreeing on the sale and the Surrogate required that the fiduciaries obtain a surety bond to secure their use of the funds.

Guardianship-300x201The imposition of a Guardianship for incapacity or disability in New York can occur in a number of ways.  Perhaps the most well-known procedure is that provided by Article 81 of the Mental Hygiene Law (MHL).  These provisions set forth the legal standards and procedures for the appointment of a Guardian for the person and/or property of an individual who is incapacitated.  Essentially, MHL 81.02 entitled “Power to appoint a guardian of the person and/or property; standard for appointment” provides that a person is incapacitated if they would suffer harm because they cannot provide for personal or property needs and they fail to understand and appreciated the disability.  The New York Probate Lawyer Blog has published many articles discussing different aspects and issues involved in a Guardianship case.

The appointment of a Guardian requires clear and convincing evidence.  There is a Court hearing and the focus of the inquiry is on the functional abilities of the person alleged to be incapacitated.  Essentially, the Court examines a person’s ability to handle various activities of daily living.  If a Guardian is found to be needed, the Court has the ability to structure or apply Guardianship control in a limited way to suit the needs of the individual.  The imposition of the least restrictive powers is mandated.

In this regard, MHL 81.36 entitled “Discharge or modification of powers of guardian” allows the Court to terminate a Guardianship in a number of circumstances.  These include situations where the incapacitated person becomes able to exercise powers for personal needs or property management or the appointment of a Guardian is no longer necessary.  Thus, there is a statutory and procedural framework to allow a Guardianship under Article 81 to be modified or even terminated.  Once again, the Court has discretion to provide a person with independence and limit control by others.

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