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.