New York Estate Debts Must Be Paid By a Fiduciary

Executors and Administrators appointed by the Surrogate’s Court have many duties and responsibilities. New York Estate Lawyers who represent fiduciaries typically assist their clients in connection with determining and paying estate liabilities. These liabilities can be in the form of debts and claims owed by the decedent such as unpaid credit card bills, mortgages or other monetary obligations. Additionally, the decedent may have owed past due income taxes or taxes that are to become due relating to the decedent’s final income tax return.

Regardless of the nature of the debt or obligation, the estate fiduciary must find and pay the monies that are due or risk becoming personally liable if all estate assets are paid out before all creditors are satisfied.

Estates, Powers and Trusts Law (“EPTL”) Section 11-1.1 entitled “Fiduciaries’ powers” in paragraph 13 provides that fiduciaries have the authority to settle claims and paragraph 22 authorizes fiduciaries to pay reasonable expenses . When there is a dispute as to the validity of a claim made against an estate, there are a number of procedures that can be followed to resolve the controversy. The New York Probate Lawyer Blog has previously discussed that a fiduciary has an obligation to provide an estate accounting when settling an estate. As part of the accounting proceeding, the validity of the claim can be determined. Estate litigation often involves issues concerning estate claims. In other instances, a creditor can initiate a Surrogate’s Court proceeding pursuant to Surrogate’s Court Procedure Act (SCPA) Section 1809 which is entitled “Proceeding to determine validity and enforceability of claims.” In this proceeding the estate executor or administrator can be requested to pay the claim and the Court would ultimately decide the claim’s validity.

SCPA 1809 was recently utilized in a case entitled Estate of Larsen, which was decided by Manhattan Surrogate Rita Mella on April 15, 2015.  In Larsen, the claimant sought reimbursement for various items including funeral expenses.  Ultimately, the administrator failed to oppose the claim and an award was made by the Surrogate in favor of the claimant for reimbursement of funeral costs.

As noted above, a fiduciary has a duty to satisfy all claims made against a decedent’s estate. In another recent case entitled Estate of Goris, decided by Manhattan Surrogate Nora Anderson on April 10, 2015, it is noted that the Administrator’s appointment was revoked because he failed to pay a claim asserted by the New York City Department of Social Services.

I have represented many fiduciaries in estate settlement where claims needed to be determined and satisfied. Sometimes the interests of the beneficiaries require that litigation in the Court be pursued to oppose the alleged debt. I work closely with the estate representative to resolve these matter effectively. If you have a question concerning an estate asset or claim, please contact me to discuss your matter.

New York Probate Attorney Jules Martin Haas has helped many clients over the past 30 years resolve issues relating to Probate, Administration and estate settlement throughout New York City including Brooklyn 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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