New York Probate Court

April 6, 2011

New York Probate Procedure Is Affected By Recognition of Same-Sex Marriage

The New York Probate Blog has discussed on many occasions the probate procedure in New York. Probate is the legal process by which a Will is validated by the Surrogate’s Court. The procedure to probate a Will encompasses many facets. Initially, a Probate Petition is prepared and filed with the Court.

The Probate Petition contains basic information regarding the petitioner who is usually the proposed Executor. The Petition is usually prepared with the guidance of an experienced New York Trusts and Estate attorney. Details regarding the decedent, the date of the purported Last Will, the names of the attesting witnesses to the Will and the estimated value of the probate estate are also included. An essential section of the petition requires that the names and addresses of the decedent’s distributees, or next of kin, be provided. The reason for requiring this data is because the distributees have a right to receive official notice of the probate proceeding since they have an interest in contesting the Will. In the event the decedent died without a Will or the purported Last Will is deemed to be invalid, the distributees would inherit the estate according to the laws of intestacy. Therefore, a proper kinship determination is essential to the probate process.

In a recent New York decision, H. Kenneth Ranftle v. Craig Leiby, the New York Appellate Division, First Department, decided on February 25, 2011, that a same-sex Canadian marriage between the decedent and his partner would be recognized by the New York Court. Thus, in this Manhattan Probate case, the decedent’s sole distributee was determined by the Court to be his same-sex “spouse”. The decedent’s siblings were found not to be distributees since the New York Statute, EPTL 4-1.1, gives priority to a spouse. The siblings were precluded from challenging the decedent’s Will.

I have helped many clients prepare probate petitions. Obtaining information regarding distributees and giving them the proper Court mandated notice is a paramount objective. The accurate completion of the probate petition greatly helps speed up a successful Will probate.

March 22, 2011

Transfer-on-Death Registration One Option for Planning New York Estate

by Jules M. Haas

As part of our ongoing series on the advantages and disadvantages of avoiding probate in New York, our New York City estate planning attorney publishes this post on naming beneficiaries for stocks and bonds.

Most recently we discussed on our New York Probate Lawyer Blog the importance of naming beneficiaries to retirement accounts. Unfortunately, it not unusual for complications to arise — including instances where the name of an ex-spouse is left on an account — particularly in cases of sudden death during middle age.Avoiding probate has its advantages — as we have discussed, keeping an estate settlement out of court can speed the process and keep it private. Whereas, a probated estate will be subjected to the court’s time frame and the public process inherent in most court cases. However, avoiding probate does not mean you will not need a probate attorney; indeed, an estate planning lawyer may be even more critical in cases where a person desires to structure an estate capable of bypassing the safeguards of the court process.

Like naming beneficiaries on retirement accounts, naming beneficiaries of stocks and bonds is another simple way to transfer assets outside of probate court. The advent of IRAs, 401(k) plans and self-directed brokerage accounts has given rise to laws in 48 states (Louisiana and Texas are the laggards) that deal with transfer-on-death registration. Much like the payable-on-death bank accounts we previously discussed, transfer-on-death registration permits you to own stocks in what is known as “beneficiary form,” which permits their transfer to a named beneficiary at the time of your death.

One potential drawback is that your broker may not permit you to name an alternate beneficiary. In other cases, your broker may not offer the service. Joint stock accounts can have T.O.D. benefits but the co-owner must have rights of survivorship. What that means is that the account will not transfer to the named beneficiary until both account holders are deceased.

There are also rights of spouses under state law, which cannot be bypassed using T.O.D. And complications apply to naming a child under 18 as beneficiary — a guardian and an adult money manager may be needed to be appointed to make sure a minor has sufficient assistance in managing the funds.

In cases where a beneficiary dies before you do, or there is otherwise an absence of named beneficiary, the stocks would typically be distributed under your Will’s “residuary clause,” which names a beneficiary to inherit everything not specifically mentioned in the Will.

Other challenges exist in using T.O.D. registration. And your estate planner is best suited to assist you in determining whether such a transfer is right for you. Instances in which a bond is not easily divisible, or the need exists to name more than one beneficiary, are examples of instances where other arrangements may best serve an estate.

March 15, 2011

New York Executors Have Authority to Act on Behalf of the Estate

by Jules M. Haas

An Executor of a New York estate, or other fiduciary such as an Administrator, is the party empowered by law to act on behalf of the estate. The underlying purpose of a Surrogate’s Court probate or administration proceeding is to have the Court officially appoint a person or institution that has the legal authority to handle the decedent’s affairs. Similarly, a Trustee is empowered to represent a Trust.

There are many circumstances in which the authority of an Executor or other fiduciary may arise. The recent case of Friedman v. Clearview Gardens, concerned issues of an Executor’s powers and arose in a landlord-tenant eviction proceeding involving a cooperative apartment.

In Friedman, decided by the Hon. Charles Markey on February 3, 2011, (Supreme Court, Queens County), Ron Friedman (“Ron”) brought a lawsuit against the cooperative corporation essentially to stop an eviction proceeding and to have the cooperative corporation put the coop stock into his name. Although Ron had lived in the apartment for over 50 years, the coop stock ownership was in the name of Ron’s mother who had died in 2006. Ron’s brother, Daniel, was named as the Executor of the mother’s estate by the Queens County Surrogate’s Court.

The Court ruled that Daniel, as Executor, and not Ron, had the legal authority to sue the cooperative corporation. Moreover, the Court found that a power of attorney that Daniel had given to Ron was ineffective since an Executor is not allowed to delegate his or her authority.

The Friedman case demonstrates that a Court appointed fiduciary is necessary to control and oversee the assets and other affairs relating to the settlement of a decedent’s estate.

I have represented many Executors and other fiduciaries in various matters, including landlord-tenant proceedings, that involve a decedent’s interests. A decedent’s estate may need to evict a tenant from estate property if it must be sold or if the tenant is unwanted. Similarly, an estate or trust may require protection from an eviction to protect the decedent’s rights property.

March 7, 2011

The New York Probate Process Involves Numerous Documents

by Jules M. Haas

The Probate of a Last Will in New York can appear to be a complicated and mysterious procedure. While the rules and procedures of the Surrogate’s Court are complex, certain fundamental requirements for Probate are fairly easy to set forth.

Among the essential aspects to a Probate proceeding is providing the parties interested in the proceeding with proper notice that the Court case has been commenced. In particular, the decedent’s “distributees” or closest next of kin are required to be served with a “Citation”. A “Citation” is like a summons in a regular civil action. The Citation will advise the parties who receive it as to the Court date and that they need to appear if they desire to object to the Probate of the Will. The necessity of having to serve a Citation and wait for a Court date, which may not be scheduled for a month or more after the Will is filed with the Court, results in a delay in the administration of the decedent’s estate.

In most estates where close family members, such as spouse or children, have no objection to the Probate of the Will, a form entitled “Waiver of Issuance and Service of Process and Consent to Probate” can be signed by the interested party. This form once signed and notarized, dispenses with the need to serve a Citation on such person. In fact, if all the necessary parties sign such a form, there is no need to serve a Citation at all and the Probate process and estate administration can be expedited.

Surrogate’s Court Procedure Act Section 401(4) provides, in part, that the Waiver Form “shall state the date of the will to which it relates and that a copy has been furnished or examined.”

In most instances when a client has requested that I represent them in Probate proceedings, efforts are made to obtain signed Waiver forms from all necessary parties as quickly as possible. While there are many aspects to and requirements for Probate, obtaining Waivers is always a first essential step, where possible.

February 9, 2011

Complications May Arise From Estate Settlement Outside New York Probate

by Jules M. Haas

As we discuss the pros and cons of avoiding probate court that certainly does not mean you will not need the help of a probate lawyer in New York City.

As part of our ongoing series on estate settling options, we reported on our New York Probate Lawyer Blog that avoiding probate in New York is not for everyone. However, there are certain advantages to avoiding probate in New York.An article in The New York Times also tackled the issue.

Probate is the system used to determine the validity of a Will before an estate is distributed to heirs. It is a public process, and can be time consuming. Passing assets outside of probate keeps the process private.

Establishing a Living Trust in New York is the most common method of avoiding probate. A Living Trust holds assets for your use during your lifetime and then distributes them to your chosen heirs after you pass. However, such trusts only avoid probate to the extent assets are placed in the trust.

Non-trust assets must still go through the probate process. Other assets that will avoid probate include assets that have a named beneficiary such as retirement assets, life insurance, savings bonds and jointly held real estate or bank accounts. This can also cause problems — as in cases where one child is named in a joint account for the purposes of taking care of an aging parent. Money in that account will automatically pass to the surviving account holder, whether or not that was the intention.

Checking the beneficiaries on accounts and life insurance policies is an important consideration. Seeking the advice of a New York estate lawyer can be a great investment when it comes to ensuring that your affairs are in order. The peace of mind can be priceless.

February 7, 2011

Payable-on-Death Accounts one Option for Distributing Estate Funds in New York

by Jules M. Haas

Consulting a New York City probate attorney is always the best option when establishing estate plans, executing a Will or deciding upon the best course of action for distributing your estate after your passing.

For some, probate court is a good option. Others may choose estate planning options that permit them to bypass probate court. This is the third blog in our series. Recently we wrote avoiding probate court is not for everyone and about the many advantages to avoiding probate. Here we are going to look at some common issues with bank accounts. One option is to create a Totten Trust, tentative trust or informal trust. These are payable-on-death accounts. Adding a payable-on-death designation can be done for many types of accounts, including certificates of deposit, checking and savings. By listing the beneficiary on the signature card, you have established where the assets go at the time of your passing.

This is not the same as a joint account. A joint account frequently comes with “right of survivorship.” In these cases, a POD (Payable On Death) designation would only apply after the death of the second account holder.

Beneficiary issues for bank account inheritance in New York:

-Children: While you can name a minor child as POD beneficiary, you might want to explore appointing an adult to hold the money on a child’s behalf. Or make other arrangements to provide some restrictions and guidance. Appointing a guardian for the funds can be easily and inexpensively done through the Uniform Transfer to Minors Act. In New York, such custodianship would be good until a minor child turns 21.

-Multiple Beneficiaries: Can be designated on the appropriate bank documents. However, you cannot name an alternate payee.

-Your Spouse: May have rights to the funds in the account and a POD should not be used as an attempt to exclude them from collecting.

-Creditors: You can’t use a POD to empty an account and short-change creditors.

You may also run into issues by trying to use a Will to change a POD designation. In cases where you change your mind, you can simply close the account or you can go to the bank and change the paperwork.

And, like with most types of inheritance, you may owe New York estates taxes and federal estate taxes on the proceeds.

January 27, 2011

Avoiding Probate Court Process In New York Not For Everyone

by Jules M. Haas

While many seek the advice of a New York City probate lawyer to establish a Will, trusts, or other estate plans, far too many will die intestate, without a Will or other directions for the dispersal of their estate upon their death.

As we wrote recently on our New York Probate Lawyer Blog, trusts can be made to keep your estate out of the probate process, which can be time consuming and unnecessarily public. Yet there are some things that cannot be accomplished by avoiding probate in New York. Avoiding Taxes: Certainly comprehensive estate planning in New York may save thousands in taxes. But the mere fact that an estate avoids probate does not mean that it avoids tax obligations. State and federal estate taxes, capital gains taxes and real estate taxes are just a few of the tax obligations that estates frequently face.

Rights of immediate family: Avoiding the probate process, in general, does not change the fact that your spouse has a right to inherit. A spouse who does not receive a “statutory share” may go to court to claim property you have put in trust. In most cases, you are not obligated to leave your children an inheritance.

Creditors’ Rights: Bypassing probate may not relieve you of your obligation to creditors or their right to collect upon your death. If you do not leave enough assets outside of trust to pay your debts and taxes, those assets may be claimed by creditors after your death.

Creditors have strict time limits for making a probate claim. This is one area where going through probate court has its advantages. A creditor that does not make a claim within the appropriate time limit, may be barred from attempting to collect.

Understanding your rights to probate — as well as the ways to avoid the probate process — can allow you to make informed decisions as part of your estate planning in 2011 and beyond.

January 25, 2011

Many Advantages To Avoiding Probate Court In New York

by Jules M. Haas

There can be many benefits to avoiding the probate court process in the settling of an estate, including more privacy. Contacting an estate planning lawyer in New York City is a good first step toward putting your affairs in order as we begin 2011.

This is the first of several posts to our New York Probate Lawyer Blog that will examine ways to avoid the probate court process and the possible benefits and consequences of doing so.In general, if a decedent has no Will, known as an intestate estate, or if his or her estate is governed by a Will, the estate will go through the probate court process for dispersal to named heirs or living relatives. Some small estates, valued at less than $30,000, may avoid the probate court process.

New York does not follow the uniform probate code, as is in place in some other states, which can make the process longer and more costly in some instances. Establishing a trust in New York or taking other steps to avoid probate, may be to your advantage in many instances.

Other common challenges inherent in the probate process include:

-Identifying and contacting relatives: In cases where spouse and children are present this is not much of an issue. But in cases where a decedent passes away with only distant relatives, tracking down relatives can be an unnecessary headache.

-Lack of privacy: Probate court is a public forum and a family’s private finances and other information will become public for all to see.

By creating trust funds and taking other steps to avoid the probate court process in New York, you can ensure that your heirs receive the inheritance privately, with as little cost, hassle and wait as possible. Probate court does a lot of things right — including ensuring the proper distribution of your assets to your chosen heirs — but the same may be accomplished in a private, expedited manner with a little forethought and some basic estate planning.

December 7, 2010

New York Estate Fiduciary Accountings Involve Issues Regarding Estate Administration

by Jules M. Haas

New York Executors and Administrators are appointed by the Surrogate’s Court to administer a decedent’s estate. Typically, there are many aspects to estate settlement including the identification and collection of a decedent’s assets, the payment of debts and estate expenses and the payment of income and estate taxes. The final phase of estate administration requires the distribution of the decedent’s net estate to beneficiaries either according to the terms of the decedent’s Last Will or pursuant to the laws of intestacy.

In this final phase the estate fiduciary is required to provide an accounting of his or her activities so that the beneficiaries can see that the distributions to be made to them are accurate and are in accordance with the terms of the decedent’s Last Will and statutory rules. In estate accounting proceedings a beneficiary can examine and object to the conduct of the Executor or Administrator that occurred during the course of estate settlement. Beneficiaries can also dispute proposed distributions based upon differing interpretations or construction of the Last Will or statutory language.

A typical contested Accounting proceeding occurred in Matter of Marianne C. Gourary reported in the New York Law Journal on November 16, 2010. Matter of Gourary involved a 17 million dollar estate where the decedent’s wife, Marianne, was the executor and objections to her accounting were filed by their son, John. In deciding motions for summary judgment, Surrogate Kristin Booth Glen of the New York County Surrogate’s Court faced a number of issues.

One issue involved a dispute regarding the proper distribution of the decedent’s collection of rare books. The parties disputed which provision of the Last Will was intended to dispose of this book collection. The Court found that this dispute should be resolved after a trial.

Another issue involved John’s objection to Marianne’s use of estate funds for secretarial services. The Court found that Marianne’s payment for these services from estate funds was improper and required that she reimburse the estate from her executor’s commissions.

As can be seen from Matter of Gourary, Executor and Administrator accounting proceedings can be contentious and complex and can involve many diverse issues. The actual accountings are often lengthy and must be prepared in specific financial schedules as required by the New York Surrogate’s Court Procedure Act and Court guidelines.

December 3, 2010

Knox Saga Illustrates Importance of Choosing a Trustee For New York Trusts

by Jules M. Haas

In what is being described as possibly the largest probate court award in New York history, HSBC Bank USA has been ordered to pay more than $25 million to seven trusts of the Seymour Knox Family for “negligent and Imprudent” handling of the trust funds dating back to the mid-1990s.

The Buffalo News reported the suit was launched by the bank in 2006 when it requested to be discharged as manager of the Knox trusts.

This case illustrates the risks associated with institutional trust administration. A New York City probate lawyer can assist in establishing a trust, which can have many advantages, including tax benefits and privacy.

Choosing a Trustee for a New York trust is an important step, which can greatly impact the ability of a trust to protect an estate’s wealth for future generations. A New York trust lawyer can best advise you on establishing a proper system of checks and balances.

In this case, the bank may also be ordered to reimburse the family for stock trading commissions, attorney fees and court expenses. A guardian ad litem appointed to represent the Knox children said the award rights decades of wrongs and replenishes a trust that deteriorated over time as a result of the bank’s actions as a corporate trustee.

The Guardian blamed the trust’s deterioration on inattention and bad decision making on the part of the bank.

By law, the bank had to petition the court for approval to be relieved of its duties as a fiduciary. At that time, attorneys for the families reviewed the status of the trusts and found numerous red flags. The Knox family is a legendary business family in the Buffalo area, perhaps best known statewide for bringing the Buffalo Sabres into the National Hockey League.