Estate Planning

October 9, 2013

New York Kinship Issues are Always Important to Estate Administration and Estate Planning

The determination of kinship is important for all New York estate matters. The New York Probate Lawyer Blog has had many posts discussing this issue.

Firstly, an Estate Planning Lawyer typically asks a client to provide information regarding next of kin. This information serves many useful purposes. It can indicate whether a person’s estate might be the subject of a Will Contest or Will Dispute if a testator is leaving a large portion of an estate to individuals who are not close relatives. If this is the case, the estate planning attorney may suggest alternative methods of asset distribution such as lifetime gifts or a living trust. These vehicles would avoid the probate and Surrogate’s Court process which provides next of kin (i.e. “distributees”), with an automatic right to contest a person’s Last Will.

Kinship information is important when a Last Will is to be filed for probate. An Estate Lawyer needs to prepare a Probate Petition that includes all information such as names and address of a decedent’s distributees. These distributees are then provided with a notice issued by the Court called a Citation as to the probate proceedings.

When a person dies without a Will, the estate is subject to intestate administration. The estate beneficiaries are the persons determined under the New York statutes. Estates, Powers and Trusts Law Section (“EPTL”) 4-1.1 provides for the priority of the heirs entitled to inherit.

In many cases, the next of kin of a decedent are unknown or are distant in relation such as cousins. It may be that the county Public Administrator is needed to administer such estates and that a Kinship Hearing is required by the Surrogate’s Court to establish the identity of the persons entitled to the inheritance. As can be seen, it is important to have complete information regarding kinship for effective estate planning and estate administration. Although a person may prepare a Last Will leaving his or her assets to a close friend or other non-heir beneficiary, the probate of the Will may be delayed and unduly costly due to the search for decedent’s heirs who were not identified or considered when the estate plan was created. Of course, when a person does not prepare a Last Will, the likelihood of complications regarding the determination and proof of kinship increases dramatically.

A recent Ohio case, although not directly involving a kinship estate problem, points to the issues faced when a person needs to show familial relationships such as the whereabouts or status of a potential heir. As reported by Ryan Dunn in The Courier.com dated October 8, 2013, a fellow named Eugene Miller was declared legally dead by the Hancock County Probate Court in 1994, which was eight years after he disappeared. Mr. Miller recently reappeared and claimed to have just “took off” due to alcoholism and loss of his job. He then petitioned the Court to reverse its ruling that he was dead. The Court, however, refused to reverse its ruling because the three (3) year limit to change the ruling had passed. Mr. Miller was told by the Court that he was still considered to be legally dead.

While Mr. Miller’s predicament seems somewhat unique, it points to the uncertainties and difficulties that can be presented when attempting to show kinship and proving that an ancestor is deceased or that he was not survived by any living issue. EPTL Section 2-1.7 entitled “Presumption of Death From Absense; effect of exposure to specific peril” provides a procedure to have an absentee declared to be dead. Also, New York Surrogate’s Court Procedure Act 2225 entitled “Determination of distributees, devisees, legatees, beneficiaries and distributive and beneficial shares” provides a procedure to have a possible estate beneficiary declared presumatively deceased.

The estate planning and administration process is quite complex and the need to understand and determine kinship is essential.

September 25, 2013

New York Wills Should Be Written to Avoid Ambiguity

by Jules M. Haas

New York estate planning lawyers are aware of the need to prepare estate planning documents with clear and unambiguous language. There are many types of papers that require clarity of language. These include Last Wills, Living Trusts, Living Wills and Health Care Proxies.

The use of specific provisions contained in documents such as a Last Will and Living Trust is most critical since these papers reflect a person’s directions and intent regarding the disposition of assets. There may be various provisions in a Will or Trust that may provide for a gift of a certain sum of money to a named individual. There may also be more complex provisions that provide for disposition in a trust with various conditions or alternatives in the event individuals become deceased. Dispositions, especially to a surviving spouse may have certain tax consequences and there may be specific Will clauses that allocate the burden of paying estate taxes against particular bequests.

The use of definitive and non-confusing language serves to provide maximum effect to a testator’s or creator’s intent and prevents post-death confusion and disputes regarding the meaning of the language contained in the document.

The New York Surrogate’s Courts have been the forum of many cases where the wording in a Will or Trust has been the subject of Estate Litigation. Two recent cases provide examples of such estate disputes and the manner in which a Court might view such issues. In general, where language in a document is unclear, a “construction proceeding” is needed to resolve the issue. Recently, Manhattan Surrogate Nora Anderson was presented with a petition for a Will construction in Will of Edwin C. Scheurer. In a decision dated September 16, 2013 and reported in the New York Law Journal on September 23, 2013, Surrogate Anderson found that there was no ambiguity in the Will provisions that eliminated a bequest to one of the decedent’s grandchildren. Since the Will language was not ambiguous, the Court refused to allow any extrinsic or outside evidence to be used to interpret the testator’s intent.

A different result was reached, however, in In Re Estate of Phillips, 957 N.Y.S. 2d 778 (4th Dept. 2012), where the Appellate Division determined that the language in the Will was unclear and required that extrinsic evidence be used to determine the testator’s intent. Phillips is instructive since it presents a situation that at first glance would not cause a Surrogate’s Court Litigation. The Will in Phillips contained a provision whereby the testator gave his residence “and the plot of land appurtenant thereto” to his live-in girlfriend. A dispute arose as to whether the language “and the plot of land appurtenant thereto” referred to the land upon which the residence was built or to another plot of land that was adjacent to the residence and the land upon which it was situated. The Court found the language to be ambiguous and referred the case back to the Surrogate for further proceedings to consider the surrounding evidence of the decedent’s intent.

Estate planning in New York requires the creation of a number of different documents. While it is important to ascertain the intention and desire of the person who is creating the Will or Trust, it is equally necessary to express all intentions and directions in clear and unambiguous language to avoid Will Disputes and dissention between beneficiaries.

September 18, 2013

New York Guardianship Can Be Avoided by Using Advance Directives

by Jules M. Haas

A New York Guardianship proceeding under Article 81 of the Mental Hygiene Law (“MHL”) can be a very complex and sometimes lengthy process. The New York Probate Lawyer Blog has discussed in many posts the Guardianship process. The essence of the proceeding is a determination as to whether the alleged incapacitated person (“AIP”) is “incapacitated”. As provided in MHL 81.02 a finding of incapacity requires clear and convincing evidence that the AIP will be harmed because he cannot provide for his personal or property management needs and cannot adequately appreciate and understand the nature and consequence of his disability.

The Guardianship Court will be presented with a Petition and a Court Evaluator usually will provide the Court with a report and recommendations. A hearing will be held at which time testimony from parties and witnesses will be given and other evidence introduced. A decision and judgment issued by the Court finally determines whether a Guardian is appointed, and if so, the Court selects the Guardian and delineates the Guardianship Powers.

It is preferable, however, and if possible, for a person to prepare and finalize documents identified as advance directives that might obviate the need for a Guardianship. A Health Care Proxy is a perfect example as to advance planning whereby a person is named as an agent to make health care decisions if the principal or creator of the proxy is unable to do so. Similarly, a Power of Attorney allows a person to select other individuals to make property management decisions regarding many specified items such as real estate or business transactions or tax matters. These two documents, a Health Care Proxy and Power of Attorney, might avoid a long and costly Guardianship court case.

Another document that a New York Estate Planning Lawyer can assist with is a Living Trust. These trusts allow the creator to place all assets under the trust while maintaining full control as the Trustee over their disposition. However, provisions in the Trust can provide for a substitute Trustee if the creator becomes disabled or incapacitated. A Living Trust can also act as a substitute for a Last Will and typically provides very similar provisions for the disposition of the trust promptly upon the death of the creator.

While advance directives can be very helpful and may avoid the Guardianship process, all such documents may still be the subject of controversy and court proceedings. Just recently, Dutchess County Supreme Court Justice James D. Pagones decided a case entitled Matter of IMRE B.R. In IMRE a person had executed a power of attorney and Merrill Lynch refused to accept or honor the power. Merrill Lynch claimed that the principal might have lacked capacity to sign the power. A petition was then brought under the New York General Obligations Law Sec. 5-1510(2)(i) to compel Merrill to accept the power of attorney. After reviewing the allegations, the Court granted the petition to compel.

Estate and lifetime planning requires a consideration of a persons assets, desires and intentions and the effect these decisions may have on intended beneficiaries. The implementation of advance directives can provide an efficient and expeditious way to deal with circumstances such as incapacity and even a short-term disability. By expending the time and effort to provide these papers, the more cumbersome and lengthy Guardianship process may be avoided.

September 4, 2013

Estates Taxes Are Always An Important Aspect of New York Estate Administration

by Jules M. Haas

A New York Estate is subject to potential estate taxes. The tax is imposed under both Federal and New York State laws. The New York Probate Lawyer Blog has previously talked about estate taxes. It is the duty of an estate fiduciary such as an Administrator or Executor to determine whether a decedent’s estate must pay any estate tax and to actually pay the tax.

Both the Federal and New York estate tax is due to be filed and paid 9 months following a decedent’s date of death. An automatic extension of 6 months is available to file the tax return. The information required to be reported is a detailed list of all of the assets, debts, expenses and other financial data that provide an economic snap-shot of an estate.

Estate assets are typically valued as of the decedent’s date of death. This gross estate includes all items owned or controlled by the decedent or in which the decedent had an interest as of his death. Such assets include bank accounts, real estate, stocks, bonds and other items having value such as copyrights, trademarks and membership interests in businesses like a partnership or limited liability company.

During the course of estate settlement, it may be easy to obtain date of death values for assets such as bank accounts, real estate, stocks and bonds. Other items such as business interests may be difficult to value and subject to dispute. Upon the review or audit of an estate tax return, the Federal or State tax authorities may contest the value of an asset or deductible expense or liability.

An example of such estate tax dispute is presently occurring with the estate of the late pop star Michael Jackson. As reported by Patrick Temple-West in Reuters.com on August 23, 2013, the IRS claims that the Jackson estate owes Federal tax and penalties of $702 million. In the article “US Agency says Michael Jackson estate owes $702 million in taxes“, it is reported that the estate claimed in its tax filing, among other things, the image and likeness of Jackson had a value of only $2,105 while the IRS placed its value at $434 million.

Similar tax disputes can arise concerning the value of estate tax deductions such as liabilities, debts or expenses incurred in estate administration. As can be seen, potential estate taxes should be a major consideration in estate planning. This is particularly so when a large estate tax liability is expected and there are limited liquid assets available to pay the tax bill. Since the taxes need to be paid within 9 months after a death, there may be very little time to sell such items such as real estate or a cooperative apartment in order to obtain the funds to pay the tax. In many instances the use of life insurance or other pre-death financial planning can help solve this post-death liquidity dilemma.

At the present time, the Federal estate tax exemption is $5,250,000 and the New York exemption is $1,000,000. Also, both jurisdictions allow an unlimited marital deduction. However, the challenge presented in an estate plan is to limit the tax liability when a potentially taxable estate is to be ultimately paid to a non-spouse. In such situations the taxable amounts cannot be protected by the marital deduction.

It is essential that a New York Estate Planning attorney be provided with information regarding a person’s asset values and possible estate tax deductions. In this manner the appropriate tax plan and beneficiary designations can be formulated in documents such as a Last Will or Living Trust.

July 31, 2013

New York Executors, Administrators and Trustees are Entitled to be Paid Commissions

by Jules M. Haas

New York Estate Lawyers regularly prepare Last Wills and Trusts for their clients. One item that is typically discussed is the amount of commissions or fees that an Executor, Administrator or Trustee may be paid. The primary source for the allowance and calculation of fiduciary commissions is Article 23 of the New York Surrogate’s Court Procedure Act (“SCPA”).

Section 2307 of the SCPA entitled “Commissions of fiduciaries other than trustees” relates primarily to Executors and Administrators. While the section and the implementation of its rules is rather complex, the simple formulas established are that commissions are paid at the rate of 5% of the first $100,000; 4% for the next $200,000; 3% for the next $700,000; 2½% for the next $4,000,000; and 2% for all sums above $5,000,000. Other parts of the statute provide that the fiduciary is allowed to be reimbursed for the reasonable and necessary expenses that he pays. Also, if the fiduciary collects rents and manages real property, he is entitled to receive an additional 5% of the gross rents he collects. If the value of the estate is more than $300,000 and there are multiple co-fiduciaries, each fiduciary (up to 3 in number) can receive a full commission.

Clearly, the amount of commissions that a single or multiple fiduciaries can receive can have an impact on the funds that are ultimately paid to the beneficiaries. Therefore, when creating an estate plan, it is important to consider the effect the payment of commissions may have. Not only is there the financial consideration whereby the net estate available for the beneficiaries is reduced, commissions may result in unknowingly benefiting one beneficiary over another. For example, if a decedent wants to name only one of his children as an Executor, the child who acts as Executor may end up with a larger share of the estate due to the up-front payment to him of commissions. This result may be unintended if the Executor child was only named for convenience because he or she lived in New York while the other children resided elsewhere.

SCPA 2309 entitled “Commissions of Trustees under wills of persons dying, or lifetime trusts established, after August 31, 1956” provides the basic guidelines for the payment of Trustees commissions. When selecting any fiduciary such as an Executor or Trustee, there are many considerations to be taken into account. In addition to the estimated amount and possible financial impact of commissions, the creator of a Will or Trust must have the utmost confidence that the fiduciary will perform his duties properly and carryout the intentions of the creator. As can be seen from many previous posts in the New York Probate Lawyer Blog, fiduciaries have many responsibilities and can face many complex and intricate problems such as Estate Tax issues and Estate claims. While fiduciary commissions may be well earned compensation, it is still important to consider and plan an estate and trust bearing in mind the commissions that may be paid.

An additional factor that may be important to consider when reviewing potential commissions is that the payment of fiduciary commissions is typically a deductible expense for Estate Taxes. Also, fiduciary commissions are usually taxable as income to the fiduciary whereas beneficiary distributions from an estate are commonly received income tax free. Therefore, a fiduciary may be better off from an income tax standpoint to receive his beneficial share in full rather than receive an upfront payment of a taxable commission which would reduce his non-taxable beneficiary payment.

July 24, 2013

New York Estate Planning Documents Prevent Confusion Concerning Transfer of Assets

by Jules M. Haas

The New York Probate Lawyer Blog has posted many articles concerning the need for thoughtful and specific estate planning. The many documents that can be used for advanced directives and post-death plans include a Living Trust, Health Care Proxy, Last Will, Living Will and Power of Attorney.

The failure of a person to provide any documented directions or intentions can result in the disposition of assets to unintended beneficiaries through intestacy and disputes regarding a person’s care and property management in the case of incapacity. Even when estate planning documents are put into place, Will provisions that are ambiguous or confusing can result in estate litigation in the form of a Will construction proceeding.

In addition, there are many instances where, despite the preparation and execution of planning documents, disgruntled heirs, relatives and other individuals may claim that the decedent had promised or agreed to provide for them notwithstanding the absence of such provisions in a Will or a Trust. An interesting example of such a situation was presented to the Nassau Surrogate’s Court in Will of Irving Lublin , decided on June 26, 2013 and reported in the New York Law Journal on July 22, 2013. In Lublin Nassau Surrogate Edward McCarty III was presented with a Last Will that left the decedent’s entire estate to the decedent’s wife and son. The decedent’s daughter commenced a lawsuit claiming that her grandfather had an oral agreement with the decedent by which the grandfather agreed to transfer the family business to the decedent and the decedent’s wife. In return the decedent allegedly agreed that he would care for the aggrieved daughter and ensure that she received her share of the business. The daughter now claimed that the business was wrongfully transferred to the decedent’s son.

After reviewing the evidence the Court determined that the alleged oral agreement was too vague to be enforceable. The Court also refused to impose a constructive trust due to the lack of specificity regarding the agreement.

Lublin presents an example of a common situation where individuals have an expectation based upon lifetime promises or understandings with a decedent, and end up being disappointed when those expectations are not adequately expressed in valid and enforceable documents. From an estate planning point of view, if the creator of a Trust or Will desires to benefit a person with a bequest or other property disposition, the Trust or Will should contain very specific provisions regarding the proposed transfer. Similarly, it is always best for a person not to state or infer promises that are not intended to be memorialized in an enforceable document. Such pronouncements can only create expectations for individuals who end up being hurt or dissatisfied upon learning that there have been no written provisions made for their benefit. These circumstances invariably lead to litigation in an estate and unnecessary complications for estate administration.

July 3, 2013

Estate Property Rights May Seem to Never Expire

by Jules M. Haas

The New York Estate Settlement process begins upon the death of an individual. Clearly, a person’s demise signals what seems to be an end to that person’s affairs and the settlement or winding up of matters and the distribution of estate assets. However, as shown in many posts in the New York Probate Lawyer Blog, a person’s death may initiate and involve events and issues that can continue for years or even decades.

Many aspects of the administration of a New York Estate can seem never-ending. For example, Estate Litigation involving Will Contests can delay the finalization of an estate for many years and involve proceedings in the Surrogate’s Courts. Many other disputes concern the ownership of a decedent’s assets. These controversies can take many different forms. A recent case decided by Kings County Surrogate Margarita Lopez-Torres on May 23, 2013 entitled Matter of Hasan related to the ownership of certain real property. In Hasan, the decedent had been a co-owner of property as a tenant-in-common. Thus, the decedent’s interest in the real estate passed to his heirs at law subject to necessary estate administration rather than to a co-owner as would have occurred if the property was held jointly with rights of survivorship. As discussed in the decision, after the decedent’s death, various deeds were executed transferring the decedent’s interest in the property without proper authority. After much litigation before the Surrogate, the Court declared these deeds null and void.

Other estate asset rights may result in the perpetuation of estate matters. These rights may involve interests in a business, copyrights, trademarks and rights of publicity. As reported by Eriq Gardner in the Hollywood Reporter, Esq., on June 4, 2013, the heirs of the late film star Lon Chaney, Jr. commenced a lawsuit against Universal Studios. The lawsuit seeks damages for the improper exploitation of Mr. Chaney’s likeness. The film star died in 1973 and was famous for his role in many horror movies of the 1930’s and 1940’s such as the Wolf Man.

In another recent lawsuit, the Andy Warhol Foundation had claimed that artwork from a Warhol album cover from 1967 was protected by copyright and trademark laws and was being improperly exploited. As reported by Eriq Gardner in the Hollywood Reporter, Esq., on May 29, 2013, the parties had recently settled this Federal lawsuit.

As can be seen from the cases discussed and many other posts in this Blog, the settlement of a person’s affairs can be many times more complicated after they die than when they were alive. New York Estate Planning may be very helpful in avoiding some of the most complicated post-death issues. It is imperative that a full exploration and understanding of a person’s assets takes place when preparing an estate plan. Appropriate steps can then be implemented to provide for proper administration of property rights after death and to cure any defects or clarify any documents such as deeds, or copyright and trademark filings, so that disputes can be avoided.

June 26, 2013

A New York Living Trust Can Provide Benefits to an Estate Plan

by Jules M. Haas

Living Trusts in New York present a number of beneficial options for a person’s Estate Planning. The basic planning and Advanced Directive documents begin with a Last Will, Health Care Proxy and Living Will and Power of Attorney. However, these papers may not meet all of the needs in a particular situation.

For example, a Last Will can provide for the disposition of a person’s assets in many different ways through provisions for bequests of stated monetary sums, or the specific devise of particular real estate, or a gift of a percentage of the estate. Also, a Last Will can create testamentary trusts to take advantage of estate tax planning methods or provide protection for minor children or beneficiaries who are incapacitated. However, in order for a Last Will to become validated and effective it must be filed with the Surrogate’s Court and admitted to probate. The Probate Process is typically not a barrier to a smooth estate settlement particularly where all of the interested parties involved are close family members and there is no antagonism between the parties. Unfortunately, there are many situations where conflict and complexity may hinder or interfere with probate.

A Living Trust may be used to avoid some of the Probate issues and other lifetime problems which are identified below. These items include the following:

(a) Identification of distributees (next of kin) – when a Will is offered for probate the New York estate laws and rules provides that the Court be given specific details regarding a person’s next of kin. Determining this information may be difficult particularly in situations where the decedent has not had contact with any family members for decades and may have been born outside of the United States. I recall one situation where a person who was preparing their estate plan had been brought up in foster care and had no knowledge as to his biological family. The administration of a Living Trust does not require the identification of next of kin. Upon the death of a decedent the Trustee of the trust is typically authorized to distribute the trust assets to the trust beneficiaries without any Court proceedings or any search for, or notice to, the decedent’s living heirs. The provisions for distributions under the Trust would be exactly the same as set forth in the Last Will.

(b) Avoidance of Will Contests – since the administration and distribution of trust assets does not require identifying or notifying next of kin or the commencement of a Surrogate’s Court Probate Proceeding, it is less likely that a disgruntled heir will challenge the validity of a decedent’s trust or estate plan. It is rather easy for an unhappy disinherited individual who received a notice of the Probate Proceeding to file Objections to Probate with the Court. While the validity of a Living Trust can be challenged, the person who wishes to do so must take an affirmative step and prepare Court papers and commence a new Court lawsuit to discredit the validity of the trust. Thus, a Living Trust may avoid the Contest of a Will.

(c) Management of Assets in the event of disability or incapacity – A Living Trust allows the Trustee to manage assets both before and after the death of the trust creator. A Living Trust is created during the lifetime of the creator and assets are transferred into the trust at that time. While the creator is usually the trustee of the trust, trust provisions can provide for a substitute trustee in the event the creator becomes disabled or incapacitated. This type of provision allows for a more comprehensive method to handle a person’s assets in the event of a disability. While a power of attorney can also be used to accomplish this task, the trust provides a more centralized and structured approach and reduces the problems associated with having a bank or other financial institution raise questions regarding the power of attorney. While banks and other financial institutions are now required to accept and follow the instructions of an appointed agent under a power of attorney [New York General Objection Law Section 5-1504 (2) and 5-1510(2)(i)], there are occasions where difficulties still arise. Additionally, by creating a lifetime advanced directive for asset management in the case of disability, on Article 81 Guardianship Proceeding may be avoided.

New York Estate Attorneys are familiar with the various benefits that provisions in a Living Trust can provide. Since each individual’s needs and intentions are different it is important to explore the possible advantages provided by including this type of trust in an estate plan. Not every situation calls for a trust, but when necessary, a Living Trust can expedite estate administration and avoid the time and expense of lengthy Court proceedings.

June 19, 2013

New York Beneficiary Designations Are Always an Important Aspect of Estate Planning

by Jules M. Haas

Many situations have arisen over the years regarding the validity and effect of a beneficiary designation or clause that has been provided by a decedent.

The naming of a beneficiary of an asset or property can appear in a variety of forms. A person who prepares a Last Will includes provisions in the document naming various beneficiaries. These beneficiaries may receive a bequest of a specific amount of money or a more general gift of a share of an estate. Many other beneficiary designations occur outside of a Last Will. A person can designate a beneficiary of a life insurance policy or a retirement fund such as an Individual Retirement Account or 401K plan. Additionally, bank accounts can have a designated beneficiary. Such accounts are commonly known as In Trust For or ITF accounts, or Totten Trusts. A person who is named a beneficiary on this type of account typically has no right to receive any of the account funds until the death of the account owner.

In previous blog posts, the New York Probate Lawyer Blog has discussed the many problems that can arise when proper attention is not paid to these various beneficiary designations. For example, the beneficiary designations on a retirement account results in that account being paid to a named person. Such payment may conflict with the decedent’s intentions in a Last Will that disposed of an estate to an entirely different person. Also, intervening events such as the death of a named beneficiary or a divorce or a change in relationship may cause designations to become stale and not reflect the true desires of the decedent. Such a situation recently reached the United States Supreme Court in a case entitled Hillman v. Maretta. In Hillman a decedent had named his spouse as the beneficiary of his Federal Group Life Insurance. After getting a divorce, the decedent did not change the beneficiary designation to eliminate the former spouse. When the decedent died, the former spouse filed a claim for the insurance proceeds. The Hillman case involved the law of the State of Virginia which had a statute that provides that any death benefit to a former spouse is deemed revoked. Unfortunately, under our Federal system of laws, Federal law pre-empts State law and the revocation aspect of the Virginia law could not change the Federal insurance provision which provided for payment of the insurance proceeds to the ex-spouse.

However, Virginia had an additional provision in its law which provided that in the event of pre-emption, a lawsuit could be brought in Virginia by the rightful beneficiary against the ex-spouse to turn over the insurance proceeds. In Hillman the Supreme Court was asked to determine whether this provision allowing for the lawsuit, was also subject to Federal pre-emption. The Court found that the statute was pre-empted by Federal law and that this sort of end around the Federal directive was not available to defeat the ex-spouse’s right to receive the insurance proceeds. It is noted that New York has a statute that also revokes dispositions in the event of a divorce in Estates, Powers and Trusts Law Section 5-1.4.

The Hillman case is a red flag for all persons when preparing their New York Estate Plan. All assets need to be reviewed so that a complete analysis can be made as to the ownership of the asset and the name of any beneficiary who may have been named as a recipient. This complete review is required in order to avoid Estate Litigation and to facilitate Estate Settlement so that a decedent’s intentions and desires are fulfilled.

June 5, 2013

Trust and Estate Disputes Often Involve a Variety of Issues

by Jules M. Haas

Controversies arising in Estate Planning, Estate Litigation and Estate Settlement involve a vast variety of issues. New York Estate Lawyers know that the many different problems that are found in the area of Trusts and Estates are as diverse and complex as the individuals whose lives are impacted by them. In today’s blog post, I will take the opportunity to discuss some recent examples of controversies with the goal of providing some insight into the different issues and problems each portrays.

The New York Probate Lawyer Blog has discussed in prior posts that a New York Executor or Administrator has an obligation to discover and to collect the assets of a decedent. This “marshaling” of estate property is one of a fiduciary’s jobs when engaging in the settlement of an estate. An interesting approach was taken by one estate administrator who sued Wells Fargo Bank for wrongful death, elder abuse and other grounds for causing a decedent’s death. In an article by Matt Reynolds in AlterNet dated May 14, 2013, it was reported that Wells Fargo’s alleged improper foreclosure action resulted in the decedent’s death after he collapsed in the courtroom in an attempt to oppose the bank’s action. The estate Administrator then sued the bank claiming that it should pay damages for commencing a negligent and wrongful and malicious foreclosure action.

As can be seen from the Wells Fargo case, the assets or potential assets of a decedent are not always readily apparent. While it may be rather easy to discover and collect some estate property such as bank accounts, a fiduciary should investigate and consider all potential sources that might benefit the estate and its beneficiaries.

Another recent news story reported that a World War II veteran was attempting to prevent his daughter from evicting him from his home. As reported by Debra Cassens Weiss in the ABA Journal on May 16, 2013, the veteran had given his daughter a Power of Attorney whereupon the daughter transferred the vet’s house to herself and her husband. Despite claims of undue influence, the vet’s attempt to void the transfer was denied and now the daughter was seeking to evict him from the home.

The giving and use of a Power of Attorney should be carefully considered by both the Principal and the Agent or Attorney-in-Fact. While a Power of Attorney can be useful in estate planning and in avoiding Guardianship Proceedings, the person who is given the authority must be someone that can be trusted and relied upon without any doubt. Also, the person receiving the power has a fiduciary duty to act responsibly and any transfer of property by the Attorney-in-Fact to himself is considered improper.

Professional advice from a New York Estate Planning Lawyer can be very helpful in considering and preparing a New York Power of Attorney.