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Articles Posted in Estate Administration

shutterstock_96626974-300x225A New York Executor or Administrator has many duties and obligations.  Among these matters is the necessity to identify, protect and collect estate assets.  The many powers granted to a fiduciary are set forth in Estates, Powers and Trusts Law Section 11-1.1 entitled “Fiduciaries’ powers.”

While collecting assets such as bank accounts and mutual funds is typically routine, there are many situations where asset collection can be difficult and time consuming.  For example, there are many cases where a decedent owned real estate such as a single or multi-family property.  Very often, in order to provide liquidity to satisfy estate debts such as a mortgage or to allow for distributions to a number of beneficiaries, the real property must be sold.  However, there are circumstances which can interfere with a property sale.  The property may be occupied by relatives or third parties who refuse to vacate.  This situation can result in potential damage to the property or a diminution in the value of a sale.  Sometimes real estate cannot be sold at all unless it is vacant.  The New York Probate Lawyer Blog contains many articles discussing the issues associated with estate real estate.

In other cases, property that may be owned by a decedent is held in the name of another party.  These matters necessitate Surrogate’s Court proceedings whereby the administrator or executor initiates proceedings in the Surrogate’s Court to obtain the turnover of the claimed property to the estate.  SCPA Section 2103 entitled “Proceeding by fiduciary to discover property withheld or obtain information,” provides the procedure to discover and enforce title to assets to which an estate claims ownership.

shutterstock_1403735534-300x200There are some very basic rules regarding the handling of a New York estate.  Initially, a determination needs to be made as to whether or not a decedent had a Last Will and Testament or died intestate.  If there is a Will, then a probate proceeding is filed with the Surrogate’s Court.  In the event there is no Will, then a petition is filed to obtain letters of administration.  The New York Probate Lawyer Blog provides extensive articles regarding both of these types of procedures.

Regardless of the nature of the proceeding that is being presented to the Surrogate’s Court, it is imperative that the information given to the Court be as complete and accurate as possible.  The primary document which contains the essential substantive information is the petition which would typically be either a probate petition or petition for letters of administration.

The above petitions require various items of data such as the name and address of the petitioner, the name and residence address of the decedent, and date of death.  Information is also needed as to the approximate value of the estate.  This is required so that the Court can assess, among other things, the amount of the filing fees and the amount of the surety bond to be required if the Court decides that a surety bond is necessary.  Bonds are most often required in intestate administration proceedings since most Wills contain a provision waiving the filing of a bond by the named executor.

One of the most important benefits from engaging in estate planning and creating a Last Will and Testament is that a testator can select and name an executor and alternate executor.  This is important since the person nominated to act as fiduciary is someone whom the testator trusts and intends to be in charge of settling an estate.  Additionally, by nominating a person to be an executor, the nominee has the right to be appointed as the Preliminary Executor in the event the probate of the Will is delayed due to issues such as a Will contest or locating a decedent’s next of kin.

When a Will is not created and a decedent dies intestate, the appointment of an Administrator is controlled by the estate laws.  New York estate lawyers turn to Surrogate’s Court Procedure Act Section 1001 entitled “Order of priority for granting letters of administration,” to determine which individual has the right to be appointed.  The New York Probate Lawyer Blog contains numerous articles regarding the estate administration process.

As can be expected, the priority for appointment as Administrator is given to a decedent’s surviving spouse, followed by children and then other descendants.  While the statute appears straightforward, its provisions inherently allow for controversy when there is more than one person who has a right to be appointed and the eligible parties do not agree to work together.  This situation is very common when the eligible parties are a number of children since each one has a right to act as Administrator but they do not get along.  Thus, the Surrogate’s Court may be confronted with competing petitions for appointment and allegations that competing parties are not qualified to act for one reason or another.  While a majority of the eligible parties may choose to elect one of the group, the ultimate resolution must be determined by the Court.

Fiduciary-300x185There are various types of fiduciary appointments granted by the New York State Surrogate’s Court.  The Court may appoint an Executor and issue Letters Testamentary.  This occurs in connection with the probate of a Last Will and Testament.  If the decedent dies intestate, the Court appoints an Administrator and issues Letters of Administration.  The New York Probate Lawyer Blog has published many articles discussing the probate and administration process.

Sometimes when the Court proceedings for the probate of a Will or an intestate administration proceeding is delayed, the Surrogate might appoint a Preliminary Executor or Temporary Administrator.  This may occur where there is a Will Contest or Kinship cannot be determined without a kinship hearing.

An important aspect of any fiduciary appointment is the extent of powers granted to the fiduciary by the Court.  Essentially, the fiduciary can only perform those functions which the Court or the estate laws allow.  Estates, Powers and Trusts Law Section 11-1.1 entitled “Fiduciaries’ powers” lists many types of authority which an Administrator or Executor might possess, such as the power to sell assets, invest assets, pay expenses, collect income and engage in litigation on behalf of an estate.  However, in many instances, the Court Decree appointing the fiduciary may restrict or limit the authority.

1216424_supreme_court_new_yorkDuring the course of estate administration, the beneficiaries of an estate may need to wait many months or even years before their beneficial interests are paid.  In many instances a lengthy delay may cause a hardship to a beneficiary, especially when the beneficiary was dependent upon the decedent for support or the decedent’s death impacted the financial stability of the beneficiary.

In many cases of estate administration, the executor or administrator or preliminary appointee may voluntarily make an advance distribution to a person who is in need.  This tends to be a common occurrence when all of the interested parties are cooperative and there is no contentious estate litigation occurring.  However, when a fiduciary refuses to help a beneficiary who is in need, the Surrogate’s Court Procedure Act provides a procedure whereby an application can be made to the Court for an advance distribution.

SCPA 2102 entitled “Proceedings for relief against a fiduciary” contains a paragraph 5 which allows the commencement of a proceeding to force the payment in advance of an estate share when the estate “exceeds by at least one-third” the sum needed to pay other claims, debts and legacies.  The applicant must demonstrate that such payment is required for his education or support for him or his family.  This statute gives parties interested in an estate an important right to maintain financial stability during a long period of estate settlement.

shutterstock_330039464-300x200A person who is a New York domiciliary typically has his estate administrated in the County Surrogate’s Court where he maintained his home.  Domicile is a person’s primary home as opposed to numerous residences which may be used.

Whether a New York decedent has a probate estate or dies intestate without a Will, primary estate proceedings are filed in New York.  However, it is not uncommon for a decedent to own various forms of property outside of New York.  Administering such assets may be complicated and challenging.

Where an administrator or executor is appointed in New York, such fiduciary generally has the authority to access and collect all of the decedent’s personal property.  For example, the New York executor should have no problem collecting bank accounts or other similar assets that are held in financial institutions in different states such as California.  These institutions may require certain forms and certified documents to be presented but will recognize the authority of the New York fiduciary to close and collect accounts.

Surrogates-Court-300x194A fiduciary is defined in Section 103(21) of the Surrogate’s Court Procedure Act (SCPA) as including an executor, administrator and trustee.  These fiduciaries have various obligations with regard to carrying out their duties and obligations.  To begin with, statutes such as Estates, Powers and Trusts Law (EPTL) section 11-1.1 entitled “Fiduciaries: Powers, Duties and Limitations” lists many of the powers that are granted to a fiduciary to use when administering an estate or a trust.

In addition to statutory powers, the document that defines the tasks which a fiduciary is responsible for completing, such as a Last Will and Testament or Trust, can provide additional powers or specific directions as to certain matters.

There are many occasions in which a fiduciary must exercise his judgment and make decisions regarding various matters.  For example, it may be necessary to sell estate or trust property and the fiduciary must decide whether the sales price is fair and appropriate.  In other situations, the administrator or executor must determine whether a certain investment should be made or whether a discretionary distribution from a trust to a beneficiary should occur and the amount of the payment.  In these cases, the fiduciary must act properly or else he will have breached his fiduciary duty.  A breach of fiduciary duty may result in the fiduciary being removed or even held personally responsible for financial damages in the form of a surcharge.  The New York Probate Lawyer Blog has published many articles regarding estate settlement and administration issues.  These matters often result in estate litigation or trust litigation.

shutterstock_204507106-300x254When an Executor or Administrator is appointed by the Surrogate’s Court, the job of estate settlement begins. One of the first orders of business is identifying and collecting the assets of the estate.

The New York Probate Lawyer Blog has discussed the issue of asset protection and collection on many occasions. One of the primary sources of information in this regard is the financial records maintained by the decedent. Typically, the decedent will receive bank statements, brokerage statements and other correspondence that reflect values and other ownership information. Another excellent place to look for evidence of estate assets is the decedent’s prior income tax returns. These documents may contain the names of banks or other sources of dividend or interest income. The tax returns may show ownership rights in real estate, corporations, limited liability companies or partnerships.

Earlier articles in this Blog have referred to Surrogate’s Court Procedure Act Section 2103 entitled “Proceeding by fiduciary to discover property withheld or obtain information.” This statute provides the Administrator or Executor with a legal procedure to obtain verification from third parties who may be withholding or otherwise refusing to give up information concerning possible assets that were owned by a decedent. SCPA 2103 requires that a petition be filed with the Surrogate’s Court and a hearing be held before the Court to obtain the requested relief. While it may take time and effort to commence estate litigation and prosecute these proceedings, there can be very positive results for an estate if property is located and recovered. As an estate lawyer in New York City, I have been involved in numerous SCPA 2103 cases. The Surrogate’s Courts throughout New York are very familiar with these matters and recognize their importance for the successful settlement of an estate.

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The distribution of a decedent’s estate is controlled either by a Last Will and Testament or by the laws of intestacy. When there is no Last Will, Estates, Powers and Trusts Law Section 4-1.1 entitled “Descent and distribution of a decedent’s estate” determines the individuals who are entitled to a share of the estate assets. These individuals are the decedent’s next of kin or distributees.

In many intestate estate cases, it is difficult to determine the identity of the distributees. A person’s next of kin may be remote relatives such as cousins. If the family was estranged, the members may have lived in many different states or countries and have had no contact with each other for generations. The Surrogate’s Court and the New York estate laws require that complete kinship information be presented in the form of death certificates, birth records, marriage records and other documentation to demonstrate kinship. New York Estate lawyers help with kinship hearings and estate litigation when heirship is unclear. The New York Probate Lawyer Blog has posted many articles concerning kinship. Call me now if you have a kinship question.

Another aspect of intestacy is the appointment of the estate administrator. If there is a Will, the Court would appoint an executor. When there is no Will, the Court appoints an administrator. Surrogate’s Court Procedure Act (SCPA) Section 1001 entitled “Order of Priority for granting letters of administration” sets forth the persons who have the right to be appointed as the administrator. Essentially, these are the same individuals who have rights as distributees.

Planning a New York estate is an ongoing process. There are always various matters to be considered. Many aspects in a person’s life change over time. The nature and value of assets may fluctuate. Also, the identity of the beneficiaries can vary. There can be new potential beneficiaries such as a new spouse, or children or grandchildren; or a person’s intentions regarding naming fiduciaries may require amending old estate planning papers. Whatever the reason, the start of a New Year is as good a time as any to think about and implement necessary changes.

Each individual has a plan that is unique to his own situation. Documents that should be considered include a Last Will and Testament, Living Will, Health Care Proxy, Power of Attorney and Living Trust.

A recent article written by Jamie P. Hopkins, Esq., appearing at Kiplinger.com on December 3, 2019 entitled “10 Common Estate Planning Mistakes (and How to Avoid Them)”, provides a good summary of areas that should be considered. The first area covered is entitled “Not having a real plan in place.” This topic is particularly important because without any plan, a person cannot control the disposition of his estate. When a person dies without a Will, Estates, Powers and Trusts Law Section 4-1.1 directs how the intestate estate is to be paid out. It is much better to have estate planning papers specifically state which beneficiaries are to receive assets than to leave the decision to New York estate law. The New York Probate Lawyer Blog has posted many articles regarding estate administration and Wills.

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