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Articles Posted in Estate Litigation

original_1074565532-300x107Following a person’s death, the settlement of an estate, and any testamentary trusts which may be involved, typically occurs through proceedings in the Surrogate’s Court.  The New York Probate Lawyer Blog has published numerous articles concerning the probate and administration of estates.  As can be seen from a review of these publications, the types of estate litigation which can occur appears almost endless.

Just to review a few examples, leading the list as far as common recognition is the Will Contest.  In these cases, typically heirs of the decedent who have not received what they believe is appropriate under a Will offered for probate file objections to the Will.  These Will Objections usually focus on lack of due execution, undue influence and lack of testamentary capacity.  The contest of a Will is a long and complicated process which may take years and outcomes are never certain.  If the contestants put forward a viable case, it may very well result in a settlement.

Another very prevalent source of Surrogate’s Court litigation involves determining a decedent’s next of kin.  Kinship proceedings appear in both intestate administration matters and probate.  Both types of proceedings require that the decedent’s next of kin or distributees be accurately and fully identified and brought into the case to assert their rights.  Determining next of kin can be difficult and often requires the services of expert genealogists.

shutterstock_1010278675-300x200A very common issue that arises in estate litigation concerns pre-death transfers of assets.  When a person prepares a Last Will and Testament, this document only controls assets which are owned by a decedent at the time of death.  If an asset is transferred or re-titled into the name of another person prior to death, it is not part of the decedent’s estate whether he dies with a Will or intestate.  While property owned by a decedent at death may be intended for post-death distribution to certain individuals, a pre-death transfer very often changes or circumvents such distributions.  As a result, potential post-death beneficiaries often object to having their inheritance side-tracked by a lifetime transfer which occurs shortly before a decedent’s demise.  The New York Probate Lawyer Blog discusses many types of Surrogate’s cases regarding property transfers.

This scenario is precisely what occurred in a recent Queens estate case entitled Matter of Varrone, decided by Queens Surrogate Peter Kelly on June 17, 2021.

In Varrone, the decedent died leaving five children.  A number of years before her death, the decedent, through a series of deeds, transferred her home to just one of her sons, John.  She also prepared a Last Will leaving her estate to John.  Following the decedent’s death, another son, Charles, commenced estate litigation and sought to void the pre-death transfer of the home to John.

shutterstock_635914376-300x144The estate laws in New York are comprised of a variety of statutes which set forth the right of individuals regarding estate inheritance.  Some of these more well-known rules relate to a decedent’s surviving spouse.  For example, as estate lawyers are aware, a surviving spouse cannot be completely disinherited.  Estates, Powers & Trusts Law Section 5-1.1A entitled “Right of election by surviving spouse” mandates that a spouse is entitled to receive essentially one-third (1/3) of a decedent’s net estate.  An interesting aspect of the statute is that it includes assets referred to as testamentary substitutes in the calculation.  Such assets are in the form of joint ownership or pay on death items which are outside of the probate or intestate administration estate.

While a spouse cannot be disinherited, another estate statute allows a spouse to be disqualified entirely from receiving any estate interest.  EPTL Section 5-1.2 entitled “Disqualification as surviving spouse” mandates that a spouse can lose inheritance if, among other provisions, the surviving spouse abandoned the decedent.  It should be recognized that abandonment is not easily proved and that a mere consensual separation of spouses, even if for many years, typically would not result in a disqualification.  The New York Probate Lawyer Blog has posted numerous articles regarding spousal rights and estate inheritance.  Executors and Administrators should be aware of these provisions.

A spouse is not the only family member who may lose rights through disqualification.  EPTL Section 4-1.4 entitled “Disqualification of parent to take intestate share” provides details as to the loss of a parent’s portion of an estate.  It should be remembered that under the laws of intestacy provided by EPTL 4-1.1 (“Descent and distribution of a decedent’s estate”), a parent inherits an estate where there is no surviving spouse or children or their descendants.  The statute states that if a parent does not provide for a child, i.e., support the child, or abandons the child while the child is under age 21, then the parent forfeits the inheritance.  The statute is focused on the intentional actions of a parent rather than a parent where, through no fault, cannot provide support.

shutterstock_1123004039-300x199After the death of an individual, the usual course is to proceed to have a fiduciary appointed to represent the decedent’s estate.  This is necessary in order to have someone who has the legal authority to collect the decedent’s assets, pay estate expenses and obligations and ultimately, distribute the net estate to beneficiaries.

In some cases the individual would have left a Last Will and Testament, which must be probated.  This results in the appointment of an executor.  If there is no Will, a proceeding needs to be commenced to have an administrator appointed.  Whether an executor or administrator is given authority by the Surrogate’s Court, someone receives the right to act on behalf of the estate.

It is not always known that a decedent’s estate, at least in New York, is not recognized as a separate legal entity.  The nature of a decedent’s post-death proceedings flow from the existence and authority given to the appointed fiduciaries.  Without the appointment of a representative for the estate, there is no one to act for the decedent and no one against which actions can be taken regarding the decedent’s affairs.

1216424_supreme_court_new_yorkIt is not unusual that after an executor or administrator is appointed by the Surrogate’s Court that he or she finds out there is estate litigation to contend with.  For instance, the decedent may have left numerous debts which are unpaid and the creditors may decide to bring lawsuits to collect what is claimed to be due.

In other cases, a decedent may have been involved in a business or real estate transaction in which complex issues regarding claims or estate assets may be involved.  Problems arise when lawsuits are initiated or have been pending in Courts other than the Surrogate’s Court.  While creditors are allowed to file claims against an estate in the Surrogate’s Court, there are many instances where lawsuits might be instituted in other Courts, such as the New York State Supreme Court.

The problems faced by an estate fiduciary is that a law action that is pending in a Court different than the Surrogate’s Court may involve issues directly related to the administration of a decedent’s estate.  Moreover, if there are a number of related lawsuits going on in different Courts, there may be overlapping and duplicative Court proceedings such as discovery or motions or even trials and hearings.

shutterstock_96626983-300x300The procedure and terminology in a case involving a New York estate can be perplexing to those unfamiliar with this area of the law.  Surrogate’s Court matters typically involve statutes that are part of the Surrogate’s Court Procedure Act (SCPA) and the Estates, Powers and Trusts Law (EPTL).

The Surrogate’s Court is the forum in which matters such as the probate of a Last Will and Testament or the administration of an intestate estate are presented.  This kind of a case is a separate proceeding.  There are numerous additional types of proceedings, most of which concern the affairs of a decedent.  For example, there are accounting proceedings, kinship proceedings, turn-over proceedings and proceedings to remove an executor or administrator from office.  Since each proceeding is like a separate lawsuit, it is necessary for the Court to be certain that jurisdiction is obtained over all of the interested parties.  In this manner, the Court is assured that when it makes a decision in the case, its ruling will bind all of the interested parties and all of the interested parties will be given the opportunity to be heard and to protect their interests.

In each proceeding, the initiating party must provide the Court with full information regarding the identity and address of all interested parties.  If any of his information is unknown, the Court must be advised as to the missing information and the efforts made to obtain these facts.

The executors and administrators of a New York estate have a fiduciary responsibility to collect and protect estate assets.  In the event these fiduciaries fail to act in a responsible manner, the administrator or executor’s malfeasance would constitute a breach of fiduciary duty.

When a situation arises where it appears a third party is withholding assets that belong to a decedent’s estate, it is the responsibility of the fiduciary to pursue the recovery of the property or the value thereof.  Fortunately, the Surrogate’s Court Procedure Act provides a statutory procedure to obtain recovery of the property of an estate.  The rules and procedures are contained in SCPA Section 2103 entitled “Proceeding by fiduciary to discover property withheld or obtain information.”  This section of the law, along with SCPA Section 2104, entitled “Inquiry; trial and decree,” give the estate representatives broad discovery to ferret out information about possible estate assets and to prosecute a hearing or trial for return of the property.  The New York Probate Lawyer Blog has discussed these discovery and turnover proceedings in many posts over the years.

The Surrogate’s Court routinely has these matters appear on the Court calendars.  I have represented many clients in such proceedings.  A recent Albany estate case provides yet another insight into such matters.  In Matter of Mahoney, decided on August 8, 2018 by Albany Surrogate Stacy Petit, the executors of an estate sought to recover claimed estate assets including bank funds which the decedent had transferred to her long-time friend while she was still alive.  An interesting part of the case was that the bank transfer occurred with telephone authorization by the decedent.  While the executors argued that it was not common for the decedent to transfer funds by telephone authorization, the Court found that the overall evidence did not show such transaction would not have taken place.  Particularly, it seems the friend needed the funds sent quickly to complete a purchase.  After reviewing all of the facts, the Court rejected the executor’s claims and found that the bank funds were not assets of the decedent since they were properly transferred prior to her death.

shutterstock_1010278675-300x200In a recent post in the New York Probate Lawyer Blog, we discussed the necessity of reviewing various documents that may have an impact on a person’s estate planning or the administration of his estate.  Such papers would include divorce or matrimonial agreements and business papers.

A recent Manhattan estate case decided by Manhattan Surrogate Nora Anderson on July 6, 2020 provides an excellent example of the need to examine such papers and agreements.  In Estate of Kaufman, the decedent left a Last Will and Testament in which his estate was disposed of between a nephew and another relative.

The decedent was survived by his wife but did not provide for her in his Will.  Prior to his death, the decedent was engaged in a divorce action with the wife.  While the divorce was not finalized before his death, the couple had signed a Stipulation in which the parties divided their marital assets.  The agreement also contained a comprehensive provision by which each waived their rights to share in the other’s estate.

shutterstock_635914376-300x144The forum for proceedings regarding a decedent’s estate is typically the Surrogate’s Court.  Probate proceedings and requests for intestate administration are filed in the Surrogate’s Court in the county where the decedent lived.  For example, if the person lived in Manhattan, the estate proceedings would be filed in the New York County Surrogate’s Court.  This would be so even if the individual happened to die in a different location, say on vacation in another state or country.  The New York Probate Lawyer Blog should be referred to for numerous articles regarding estate proceedings.

Sometimes a litigant may want to commence a legal action regarding an estate in Federal Court rather than the local New York Surrogate’s Court.  However, initiating estate cases in Federal Court may be prohibited.  This is due to a well-known Federal Court rule called the Probate Exception.

In order to utilize the Federal Courts, there needs to be a basis for the Federal Court to have jurisdiction.  Basically, there must be a Federal question presented or diversity jurisdiction.  However, even where diversity jurisdiction may exist, the Federal Probate Exception may preclude Federal Court involvement.  This is what occurred in a recent case decided by Federal District Court Judge Kiyo Matsumoto on May 29, 2020 entitled McKie v. Estate of Dickinson.

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Estate planning and creating a Last Will and Testament is important.  However, during the planning process, attention must be given to the eventual probating of the Will.  When a Will is admitted to probate by the Surrogate’s Court, the effect is to validate the terms and provisions in the document.  At that time the executor is granted letters testamentary and can begin the estate settlement process.

The New York estate laws and procedures require that notice of the probate case be provided to the decedent’s heirs at law who are known as distributees.  These persons have a right to object to the probate of the Will.  The New York Probate Lawyer Blog contains many posts with information about probate and many other estate and guardianship issues.

A Will contest is a proceeding that involves extensive estate litigation.  Similar to most types of controversies, the relevant law allows for extensive pre-trial discovery.  Simply put, discovery allows each party to obtain documents and testimony from various sources for the purpose of discovering information and evidence to be potentially presented at a trial or other Court hearing.

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