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Can a New York Executor Seek Direction from the Court Concerning Fiduciary Decisions – Yes, in Special Circumstances

Estate-Settlement-300x200When a person is appointed by the Surrogate’s Court as an Administrator or Executor of a decedent’s estate, he assumes a great deal of powers and responsibilities.  Estates, Powers and Trusts law Section 11-1.1 entitled “Fiduciaries powers” sets forth an extensive statement of authority which an estate fiduciary may exercise.  The statute includes such powers as a right to invest estate property, collect rents, sell property, mortgage property, make repairs, contest or settle claims for the estate and to distribute estate assets, just to name a few of the many areas of authority.

While an executor or administrator may have these numerous powers, there is also a requirement that the fiduciary act properly and responsibly.  If he abuses his powers he may be found to have breached his fiduciary duties and be held personally liable for any loss or damage caused by his actions.

There are many situations where a fiduciary who is settling an estate needs to make decisions but the outcome of his action is not clear.  The fiduciary knows he needs to act but does not want to proceed if things go wrong and he is held to account for any loss or harm to the estate.  For example, an estate may hold property or assets which need to be sold to pay estate obligations or to effectuate distribution to beneficiaries.  The executor or administrator may not know whether the potential sales price is sufficient so as to avoid criticism from the parties interested in the estate.  Obviously, if a fiduciary can obtain pre-sale approval from the Surrogate’s Court, he may be able to avoid estate litigation or a contested accounting proceeding.

This was the situation the executor faced in a recent Erie County estate case entitled Matter of Estate of McGuire decided by Erie Surrogate Acea Mosey on August 25, 2021.  In McGuire, the executors needed to sell certain estate assets to pay estate tax liabilities.  However, the fiduciaries were concerned because the amount of the sales proceeds would not have left enough assets to fully satisfy bequests after payment of the liabilities.  As a result, the fiduciaries petitioned the Surrogate’s Court under Surrogate’s Court Procedure Act Section 2107 entitled “Court may direct as to value, manner and time of sale of property and give advice and direction in extraordinary circumstances.”  This statute allows a fiduciary to seek advice and direction from the Court as to whether the sale is appropriate.  However, the Court has broad discretion as to whether it will consider such a request.

In McGuire, the Court declined to provide any direction.  It noted that the executors were responsible for making business decisions and that the Court should not substitute its judgment for that of a fiduciary.  The Court also pointed out that the executors could only be held liable for their decisions if they acted in a negligent manner and not prudently or diligently.

As can be seen from McGuire, accepting an appointment as an estate fiduciary involves a great deal of responsibility and work.  Having the assistance of an experienced estate lawyer is often essential for estate settlement.  I have assisted many executors and administrators with administering an estate.  Call Me Now for a free confidential review of your estate or guardianship issue.  We offer reasonable and flexible fee arrangements and personal representation.

New York Trusts and Estates Attorney Jules Martin Haas has helped many clients over the past 40 years resolve issues relating to guardianship and probate and estate settlement throughout New York City including the Bronx, Queens, Brooklyn, Manhattan, Nassau and Suffolk County.  If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial free consultation.

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