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Articles Posted in Estate Administration

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.

The New York Court system contains a number of different Courts. For instance, in New York City there is the New York City Civil Court, the Family Court, the State Supreme Court, the Appellate Term and the Appellate Division. Additionally, each County has a separate Surrogate’s Court.

The Surrogate’s Court deals with the issues relating to a decedent’s estate. When a person dies leaving a Last Will and Testament, a probate proceeding is filed in the Surrogate’s Court. If the person dies intestate (without a Will), a petition for Letters of Administration would also be filed in the same Court.

All additional proceedings that may relate to estate matters are also filed in this Court. The jurisdiction of the Court is fairly broad. So various matters concerning kinship determination, Will Contests, Accounting Proceedings, Will construction proceedings and various disputes concerning claims and property interests relating to a decedent are typically determined by the Surrogate.

The Surrogate’s Court in New York is the judicial forum that appoints Executors and Administrators of an estate.

When a person dies and leaves a Last Will and Testament, the usual process is to appoint an Executor. The person who is to act as the Executor is named in the Will. Often a Successor Executor is also named.

The probate process requires that a petition for probate be completed and filed with the Court. This petition is usually completed and presented by the nominated Executor and requests that the Court admit the Will to probate. It also seeks to have Letters Testamentary issued to the petitioner.

Among the many fiduciary duties that an Executor or Administrator must perform is the duty to locate and collect estate assets.  There are a variety of assets which include bank accounts, security accounts, retirement funds, business interests, life insurance, annuities and real estate.   In New York, along with real property such as a single family home, a decedent may own a cooperative apartment or a condominium unit.

The job of the fiduciary is to collect these assets and ultimately distribute them or their proceeds to the estate beneficiaries.   In most instances it is fairly easy to identify and collect funds particularly when they are held in bank accounts or other financial institutions in the name of the decedent.  The New York Probate Lawyer Blog has devoted numerous blog posts to asset collection and estate settlement.

However, there are occasions when identifying and collecting estate assets can present difficulties.  An interesting example of a problematic situation was discussed in a Manhattan estate case entitled Matter of Estate of Solano.  This case was decided by Manhattan Surrogate Nora Anderson on September 30, 2019.  In Solano, the decedent had purchased an interest in her cooperative apartment which was one of the Mitchell-Lama program cooperatives.  Under this program the purchaser paid a small initial price and, upon death, the owner’s estate was only entitled to receive back the value of the owner’s initial investment.

When a person dies without a Last Will and Testament he is said to have died intestate.  In these cases there are two statutes in New York that must be referred to for primary consideration.  Estates, Powers and Trusts Law (EPTL) section 4-1.1 entitled “Descent and distribution of a decedent’s estate”, lists the priority of the decedent’s distributees (next of kin) who are entitled to inherit the estate.  As can be expected, a decedent’s spouse and children have the top priority followed by a decedent’s parents and then brothers and sisters.   New York estate lawyers are familiar with the schedule of persons who have inheritance rights.

The other important statute is Surrogate’s Court Procedure Act (SCPA) section 1001 entitled “Order of priority for granting letters of administration”.   This provision lists the persons who have the right to be appointed as the estate administrator.  Again, as expected, a surviving spouse and children receive top priority.  The New York Probate Lawyer Blog has published numerous articles concerning estate administration proceedings and EPTL § 4-1.1 and SCPA §1001.

One of the common issues that arise and result in estate litigation in the Surrogate’s Court is when more than one person wants to act as the Administrator and there is a dispute as to who should be appointed.  This can happen when the decedent is survived by brothers and sisters and there is more than one person who has an equal right to the appointment.   Typically, one of the individuals will file a Petition for Letters of Administration in the Surrogate’s Court and another distributee will file Objections to the appointment and a Cross-Petition for the opposing party to be appointed.  While SCPA §1001 allows the Court to issue letters of administration to more than one person, this may not be possible if the parties do not get along.  Also, the Courts have recognized that the appointment should be given a distributee who has the largest share of the estate or is preferred by a majority of the other distributees.

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