A fiduciary can be found in any number of different roles. The Surrogate’s Court can appoint a New York Executor or Administrator to handle the affairs of a decedent’s estate. The New York Supreme Court can appoint an Article 81 Guardian to be responsible for the property management and personal needs of an incapacitated person. In all of these situations the appointed party is a fiduciary who has obligations and responsibilities. The actions and performance of all fiduciaries are subject to review by the Court which typically occurs when the fiduciary prepares an accounting reflecting the transactions that have occurred during the tenure of the accounting party. All persons interested in the matter have a right to review the accounting and to file objections concerning issues they believe constitute a breach of a fiduciary duty. There have been a number of recent court cases which provide interesting examples of the process of reviewing the propriety of fiduciary conduct.
Matter of Flynn was a case involving an accounting by an Article 81 Guardian. Flynn was decided by Brooklyn Supreme Court Justice Michael L. Pesce on March 20, 2014. A son of the incapacitated person filed Objections to the Guardian’s account essentially asserting that the use by the Guardian of in trust for accounts (“Totten Trusts”), which named the son as beneficiary, was improper. After reviewing the evidence, the Court found that the Guardian’s use of these accounts, even without prior Court approval, was appropriate since the funds were needed and used for the interests of the incapacitated person. The Court also found that the Guardian’s selection of a nursing home to which the funds were paid was also appropriate and did not waste the funds. The Court dismissed the Objections as being without merit.
Another recent case entitled Matter of Billmyer was decided on April 14, 2014 by Brooklyn Surrogate Margarita Lopez Torres. In Billmyer an estate Executor sold a property owned by the decedent for $670,000.00. Three days after the sale the new owner sold the property for $1.3 million. After estate beneficiaries filed Objections to the executor’s accounting the Court found that the Executor breached his fiduciary duty by not properly marketing the property and obtaining the maximum sales price. The Court surcharged the fiduciary in the amount of $630,000.00 for acting improperly.
I have represented many fiduciaries in connection with their preparation and filing of their accountings. In other instances I have assisted clients with reviewing accountings and filing Objections to a fiduciary’s account. All of these matters require a full review of the accounting schedules and an understanding and appreciation of the various duties and obligations that are imposed upon the accounting party.
New York Trusts and Estates Attorney Jules Martin Haas has helped many clients over the past 30 years resolve issues relating to probate and estate settlement throughout New York City including Queens and Bronx. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial consultation.
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