Articles Posted in Trusts and Estates

The New York Probate Lawyer Blog has discussed in numerous posts that determining the identity of a decedent’s distributees (i.e., next of kin) is very important.

It was recently reported in an article by Jacqui Goddard in The Telegraph on December 27, 2012, entitled “Louis Armstrong’s secret daughter revealed, 42 years after his death” that the jazz legend, Louis Armstrong, had a daughter whose identity was kept secret until 42 years after his death. Although Armstrong died in 1971, his daughter just recently stepped forward claiming she was his natural born child. Interestingly, the article states that Armstrong’s fourth wife had signed a Probate Court affidavit asserting that he had no biological children.

In New York when a Last Will is filed with the Court for probate, the Probate Petition requires that all of the decedent’s next of kin be named and that their addresses be provided. A New York Estate Lawyer typically prepares the Probate forms and Probate papers that must be filed wit the Surrogate’s Court. In many instances the Court asks for additional information regarding kinship. Sometimes when there is only one heir, the Court will ask for a kinship affidavit. Also, when the heirs or distributees are somewhat distant, such as nieces and nephews or grand nieces or nephews, more detailed information is needed. These kinship affidavits provide the Court with full information and documentation regarding the decedent’s family tree.

Problems arise when a decedent’s next of kin are either unknown or cannot be located. The use of professional geneologists and kinship hearings may be required. In the case of Louis Armstrong, it appears that his estate affairs were settled many decades ago. However, in somewhat similar cases where a person claims to be the child of a decedent that the child’s status is disputed, the alleged or purported relationship must be disclosed in the Probate Petition and all interested parties must be given an opportunity to have a hearing regarding the alleged child’s rights. Such rights include the opportunity to Contest a Will or inherit an intestate share. Usually an official Surrogate’s Court notice called a Citation will be served on the interested parties to advise them about the Court proceedings.

It is not always easy to determine or locate a person’s heirs. Individuals may have heirs as the result of multiple siblings or marriages or adoptions and these individuals may be dispersed throughout many counties. Nevertheless, kinship identification is an essential aspect of estate administration and estate settlement.

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The various rights afforded to persons by the New York estate laws generally require that a person be related by blood to a decedent. New York Estates, Powers and Trusts Law (EPTL) Section 4-1.1 provides the relationship of individuals who can inherit an estate of a decedent who died without a Last Will. The priority established in this statute begins with a surviving spouse and issue and continues through the family tree to great-grandchildren of grandparents. Section (b) of the law provides that the “decedent’s relatives of the half blood shall be treated as if they were relatives of the whole blood.” Thus, half sisters and half brothers, for example, achieve inheritance rights. The statute further recognizes rights of adopted persons. Such familial relationships also afford a person certain rights to contest a Last Will.

However, absent an adoption, a child of a natural parent who has remarried has no rights with regard to the estate of the step-parent. This situation can present many problems, particularly in the case where the child is young. For example, if the child’s natural parent dies, the deceased parent’s estate or a large portion of it may pass to the surviving spouse if there is no Last Will or the Last Will does not provide for the child. Once the surviving spouse has received the estate property, the surviving child has no rights or expectation regarding the estate of the step-parent since there is no blood-relation between them. If the step-parent dies without a Last Will all of the step-parent’s estate, which includes the assets derived from the step-child’s deceased natural parent, may go to the step-parent’s blood relatives. Unfortunately, the step-child would be excluded under the law from participating as a distributee or next of kin of the step-parent.

This problem was recently recognized in Australia where laws have been changed to protect the interests of step-children. An article by Amanda Banks appearing in the West Australian dated December 3, 2012, entitled “Stepchildren get will rights” discusses this topic.

The best remedy for disinheritance of a step-child is for the child’s natural parent to prepare a comprehensive estate plan which includes a Last Will, Living Will, Health Care Proxy and even a Living Trust. The provisions of these documents can provide for estate assets to go to a child and also that the child be appointed as an Executor or Health Care Agent. If the child is a minor, a trust can be created with an independent trustee to protect the property that is given to the child. While disinheriting a child is allowed under New York, the unintended disinheritance of a child in a second marriage situation can have devastating life-long financial consequences.

Many individuals believe that estate planning is only for those that are wealthy and want to limit estate tax liability. In fact, there are many family situations where there are second marriages, adopted children, unknown heirs or other family concerns unassociated with tax issues which require extensive estate planning and foresight.

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The New York Probate Lawyer Blog has discussed many of the proceedings that can arise in the Surrogate’s Court such as the Manhattan Surrogate’s Court and Nassau Surrogate’s Court. Each of the counties in New York State has its own Surrogate’s Court.

The various proceedings include Probate Proceedings, Intestate Administration Proceedings, Accounting Proceedings, Kinship Proceedings, and various other Miscellaneous Proceedings such as proceedings to revoke the appointment of a fiduciary.

In order for the Court to determine the issues in the cases that are filed, the Court must be certain that all parties interested in the case have received a proper notice and have had an opportunity to appear before the Court and protect their interests. Very often, the Notice that a party receives is a Citation or an Order and Show Cause. These Notices must be properly served on a party and provide information as to the date, time and place of the Court hearing.

It is not uncommon in many cases that one of the parties may not be legally capable to protect their interests or appear in Court. An infant (i.e., someone under age 18) or a person who is incapacitated cannot act for his or her own welfare. When these situations arise, there are a number of avenues that can be followed so that the incompetent party can participate in the Court proceeding.

With regard to an infant, he or she may appear by a Court appointed guardian of his or her property. See Surrogate’s Court Procedure Act (SCPA) Section 402. This section also provides that an incapacitated person may appear by a Court appointed guardian. Article 81 of the Mental Hygiene Law provides an extensive procedure for the appointment of a Guardian of the person and property for an incapacitated person.

When an infant or other disabled person has not had a Guardian appointed to represent them or when the Court feels that such Guardian cannot adequately represent them, the Court can appoint a Guardian ad Litem. SCPA 403 provides for the appointment of a Guardian ad Litem selected by the Court but also provides a procedure whereby the Guardian ad Litem can be nominated by an infant over 14 years old or his parent or guardian. Of course, such nomination is subject to approval and appointment by the Court.

In a recent case entitled a Will of Nanaline Duke, decided by Manhattan Surrogate Nora Anderson on November 28, 2012 and reported in the New York Law Journal on December 10, 2012, the Court allowed the family members to nominate the Guardian ad Litem.

Typically, the Guardian ad Litem will act as the representative of the person under disability and protect his or her interest in the Court case. SCPA 405 provides the procedure for the Guardian ad Litem to be paid for services rendered.

Estate Litigation involves many complex issues and procedures. As a New York Estate Lawyer I have represented many clients where the Court has appointed a Guardian ad Litem to represent a party’s interest. I have also acted as the attorney for Guardians who are acting on behalf of incapacitated individuals. For example, in a situation where a decedent dies intestate and his or her sole heir is incapacitated, I have petitioned the Court to appoint the sole heir as an Article 81 Guardian who then had the authority to act as the Administrator of the decedent’s estate.

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The relationship of marriage is among the most basic considerations in Estate planning and Estate administration.

The most common form of an estate plan is typically one where one spouse creates a Last Will that leaves an entire estate to the other spouse. The New York Estates, Powers and Trusts Law (“EPTL”) provides in section 5-1.1.A that one spouse cannot disinherit the other spouse. This section entitled “Right of election by surviving spouse”, essentially directs that a disinherited spouse is entitled to elect to receive an amount that is the greater of $50,000 or one-third of the decedent’s net estate.

Many other laws are intertwined with the status of married persons for estate purposes. The Federal estate tax and New York estate tax both allow unlimited deductions for assets that pass from one spouse to the other. Additionally, on the Federal level, there is “portability” or transfer of the unused portion of the estate tax exemption between spouses.

Thus, whether a decedent is married at the time of death can have a tremendous impact on a person claiming to be a surviving spouse and also on other possible beneficiaries such as children. The status of marriage and spousal rights can be challenged in Surrogate’s Court proceedings related to an estate. One such challenge may derive from EPTL 5-1.4 which provides that a divorce or other dissolution of a marriage may revoke a disposition in a Last Will or other beneficiary designation. If there has been a divorce, provisions benefiting a spouse that are found in a decedent’s Last Will which was executed prior to the divorce may be a nullity. Also, EPTL section 5-1.2 entitled, “Disqualification as surviving spouse”, sets forth that a surviving spouse may be disqualified if he or she “abandoned” the decedent.

It is usually not easy to demonstrate that a surviving spouse abandoned the deceased spouse. Numerous factors must be proved including that the abandonment was not consented to by the decedent. In a recent case entitled Estate of Hama, decided by Surrogate Kristen Booth Glen, a Manhattan Surrogate, and reported in the New York Law Journal on December 3, 2012, the Court declined to find an abandonment because the decedent had consented to the reconciliation of the surviving spouse with a prior paramour.

As a New York Estate Planning and Probate attorney, I routinely gather information from a client concerning the client’s current marital status and whether there have been any prior marriages that have ended in a divorce. In situations of divorce it is not uncommon that a person may have signed a Divorce Settlement Agreement or received a Divorce Judgment that creates obligations to maintain life insurance or make other monetary payments that would be obligations of an estate after death.

The variety of Surrogate’s Court proceedings where marital status or post-death claims can arise include Probate Proceedings, Administration Proceedings, Kinship Proceedings and Accounting Proceedings. It is essential that in all of these proceedings, as well as in developing an accurate and comprehensive estate plan, a person’s relationships must be determined and fully documented. This is especially important where marital status or spousal rights are in doubt or subject to question.

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The New York Probate Lawyer Blog has posted many items concerning Estate Litigation. Litigation in New York Estates in common in the context of a Will Contest where a distributee (next of kin) such as a child is either completely excluded from the Will or left a bequest that is less than expected. Other typical situations are where a Will disposes of an estate to unrelated third parties such as a caretaker or friend. Allegations concerning undue influence, lack of testamentary capacity or duress usually result from such occurrences. Where a Will is contested, the focus is not only on the decedent but also on the witnesses to the Will and the attorney draftsperson who can testify and shed light on the circumstances surrounding the creation of the estate plan and the Will execution process.

However, not all estate disputes concern bequests that emanate from a Will after death. Many times controversy surrounds inter vivos or lifetime gifts that are made by a decedent. Such gifts can be subject to attack based upon similar grounds of lack of capacity. Often, the lifetime gifts appear inconsistent with, and actually can destroy, an estate plan that the decedent set forth in a Last Will or Living Trust document.

Gift litigation can take place in different forms. Sometimes, prior to a person’s death, an Article 81 Guardianship proceeding may be commenced due to a person’s incapacity. Section 81.29 of the New York Mental Hygiene Law gives the Court the power to revoke transfers that were made by an incapacitated person. In situations that come to light after a decedent’s death, an estate fiduciary, such as Executor or Administrator, can seek to recover assets for the estate where the life-time transfer appears to be improper. Proceedings for the turn-over of assets are provided in New York Surrogate’s Court Procedure Act Section 2103.

An estate fiduciary has the responsibility to attempt to marshal and collect all of the assets that rightfully belong to the decedent. Demonstrating that a person lacked the capacity to make a certain lifetime gift is not easy. An example of the difficulty in prevailing with such a claim is shown in the recent case of Estate of Magda Cordell McHale, decided by Surrogate Barbara Howe of Erie County on September 28, 2012 and reported in the New York Law Journal on October 9, 2012.

In McHale, a beneficiary under the decedent’s Last Will objected to the fiduciary accounting due to the failure to include certain charitable gifts the decedent made shortly before her death. After a hearing the Court concluded that the decedent had both the “intent” and “capacity” to make the pre-death gift.

Cases such as McHale present many difficult issues involving estate settlement and fiduciary responsibility. I have represented individual family members who have felt that such pre-death gifts were the result of undue influence. I have similarly defended individuals who have received pre-death gifts where assertions have been made that such gifts were the result of undue influence. In all cases, it is important to review the history of the decedent, the expressions of intent that may have been made and the relationships been the various parties in order to have a full and clear picture about the proprietary of the disputed transfer.

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Estate litigation occurs on a daily basis in Manhattan, Brooklyn, Nassau and other New York Surrogate’s Courts in counties across the state. The variety of the issues that are the subject of dispute often appear to be endless and usually present rather interesting problems. New York estate lawyers confront many complex issues and provide assistance to their clients in attempting to resolve these matters that can disrupt and delay estate settlement.

Estate court cases occur throughout the United States and it is helpful to review a few current controversies since the situations presented can easily relate to a New York decedent.

In one recent incident a Missouri attorney has been accused of murdering her father in a very unusual manner. As reported in an article by Martha Neil posted on October 2, 2012 in the ABA, the attorney apparently shot her father, but after he survived being shot, the attorney used a forged health care proxy to have life saving treatment for him discontinued.

Under Section 2981 of the New York Public Health Law a person can appoint a health care agent by preparing a Health Care Proxy. The statute, along with companion statutory provisions, contains many specific provisions regarding the process to create the proxy. For example, it must be “signed and dated by the adult in the presence of two adult witnesses who shall also sign the proxy.” PHL sec 2981 2(a).

It should be recognized that a Health Care Proxy relates to health care decisions. In New York an individual can also appoint an agent to make financial or property decisions. However, to do so a different document called a Power of Attorney must be prepared and executed in accordance with the statutory rules beginning at New York General Obligations Law section 5-1501.

New York estate planning lawyers typically discuss with clients the benefits of having a Health Care Proxy and Power of Attorney as part of their estate and financial planning papers. As can be seen from the case of the Missouri attorney and her father, it is also important to select as an agent a person that can be trusted and will act in the principal’s best interest.

A different set of circumstances was recently reported regarding a father who sued his daughter when she questioned his handling of her trust. As reported by Barbara Ross and Bill Hutchinson in an article in the New York Daily News on October 23, 2012 a Manhattan attorney sued his daughter for libel after she filed a request with the Manhattan Surrogate’s Court to have him provide an accounting of her trust.

New York estate and Surrogate’s Court laws provide that all fiduciaries, whether they are Executors, Administrators or Trustees, are obligated to provide an accounting of their activities. The Court can require a fiduciary to account and a beneficiary can request that the fiduciary be compelled to account. Surrogate’s Court accounting proceedings can be very complicated since the fiduciary may have had many financial transactions over many years and the advice of estate attorneys and also accountants is generally very helpful.

I have represented many clients in connection with fiduciary accounting proceedings including individuals who are preparing and filing accounting papers and beneficiaries who are reviewing the accountings. When an interested party disapproves of the actions of the fiduciary, the common procedure is to file objections to the accounting with the Court and the interested party may fully investigate all financial transactions and present the objections to the Court at a hearing.

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New York Estate Planning Lawyers encounter many different issues that can have an effect on an estate plan and a decedent’s estate. Post death concerns are often resolved in proceedings in the Manhattan Surrogate’s Court, Queens Surrogate’s Court or the Surrogate’s Court in New York’s many other counties. It is astounding, even to Long Island Estate attorneys and other probate lawyers, as to the many peculiar problems faced by estate fiduciaries.

For example, in a recent case decided by Manhattan Surrogate Nora Anderson on October 19, 2012 and reported in the New York Law Journal on October 16, 2012 entitled Matter of Ray, the Court was asked to declare a potential heir as deceased due to the heir’s long absence. New York Estates Powers and Trusts Law (EPTL) Section 2-1.7 allows a Court to provide a presumption that a person is deceased after a three year absence. Based upon the demonstration of a diligent search and the potential heir’s long absence and other evidence, the Court ruled that the potential heir was presumed to have died and the sole surviving heir was then able to administer the decedent’s estate.

In another recent case decided by Manhattan Surrogate Kristen Booth Glenn on October 18, 2012 and reported in the New York Law Journal on October 26, 2012, entitled Accounting by Matseoane, the Court dismissed objections to an Administrator’s accounting that were filed by a creditor of the decedent. The problem is this proceeding was that the creditor’s alleged claim against the decedent’s estate had been discharged by the decedent during her lifetime in a Chapter 7 bankruptcy. Not only did the Court dismiss the claim, it found that the creditor and the creditor’s attorney acted improperly and were subject to Court sanctions.

As a New York Trust and Estates attorney, I am aware that having a properly planned estate can avoid many of the problems that arise during estate administration. The fundamental implementation of a Last Will may avoid issues regarding intestate succession and proof of kinship. However, it is not surprising that the lack of attention to proper planning can result in problems regarding estate settlement. However, even individuals with large estates and the monetary resources to obtain counseling regarding probate and succession issues often fail to properly plan their post death dispositions. A recent article appearing in Forbes by Erik Carter on October 17, 2012 entitled “What We Can Learn From Celebrity Estate planning Gone Wrong”, chronicles some of the mistakes made by the rich and famous. For example, the article reports about the late classic folk and rock star Sonny Bono who failed to prepare a Last Will but fathered an out-of-wedlock child who claimed a share of his estate. Even the late former Supreme Court Justice Warren Berger cost his estate hundreds of thousands of dollars due to poor planning.

Estate Administration and Estate Planning requires time and thought and the assistance of professionals such as attorneys, accountants and financial advisors. An individual who neglects to create a proper plan with consideration for post death issues runs the risk that their family and beneficiaries will suffer the consequence of unnecessary cost and delay in wrapping up post-death affairs.

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There have been numerous posts in the New York Probate Lawyer Blog discussing many aspects of the importance of good estate planning. First and foremost, preparing and signing a Last Will allows a person to provide specific direction as to the disposition of property upon death. Absent the execution of a valid Will, a person is deemed to have died intestate and all estate property that does not pass by operation of law (i.e. joint assets) is distributed to the decedent’s next of kin in accordance with State laws. Thus, long lost relatives with whom the decedent had little or no lifetime contact may become estate beneficiaries. For example, the Las Vegas Sun recently reported in a story by Cy Ryan on September 16, 2012 about a recluse who died leaving $7 million dollars worth of gold bars and coins stored in boxes in his house. It now appears that since the decedent did not have a Will, a first cousin who had not even talked to the decedent for a year, may inherit the estate.

Not only does preparing a Will allow a person to specifically name beneficiaries, a complete estate plan that includes a pre-nuptial agreement and a trust can fine tune the manner by which the decedent’s property is disposed of. A good example of such planning was seen recently with the death of actor, Dennis Hopper. As reported at on September 17, 2012, Mr. Hopper had entered into a pre-nuptial agreement that prevented his estranged wife from receiving any benefits under his Will. As discussed in my prior Blog posts, ordinarily in New York a spouse cannot be disinherited and New York Estates, Powers and Trusts Law section 5-1.1-A provides that a spouse can elect to receive a share of an estate. However, a valid pre-nuptial agreement can provide that a spouse waives the right to receive the statutory share and instead elect to receive only the amounts provided for in the agreement.

The TMZ article also reports that Mr. Hopper left his 9 year old daughter $2.25 million in a trust and that his wife had no control over the trust. It is very common for parents to leave their minor children assets in a testamentary trust, which is a trust created inside of their Will. The trustees that are also named in the Will can be anyone the testator selects, whether a relative, a friend or even a bank or trust company. The trustee does not need to be the child’s other parent. The surviving parent or legal guardian of the child has no authority to control the named trustee.

New York Estate Planning attorneys work closely with their clients to understand their needs and intentions and to develop an estate plan that can reflect their wishes. Mr. Hopper’s advisors apparently were successful in creating a plan whereby his estranged wife was excluded from obtaining or controlling any part of his estate or the manner in which it would be administered for the benefit of his young daughter.

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Proceedings in the New York Surrogate’s Court, like most Court matters, require that all of the interested parties be given proper notice of the Court action.

In addition to the fundamental fairness that results from proper notice, the Court’s ultimate rulings and Orders generally can have no effect over persons who were not made parties to the proceeding.

The Surrogate’s Court can hear many different types of cases. The most common of these matters is the Probate of a Will or the Intestate Administration of a decedent’s estate. In Probate and Administration proceedings it is mandated that the Court be advised as to identity and location of the decedent’s distributees or next of kin. This information is provided to the Court in the Probate Petition or Petition for Letters of Administration. In most instances distributees are easy to determine since the decedent is survived by a spouse and/or children. However, there are many situations where the closest living relative may be a distant cousin and members of this class of relatives may have had no contact with the decedent for years or decades.

Additionally, locating cousins requires finding relatives that are descendents of the decedent’s grandparents on both the maternal and paternal sides of the family. It is common that when distributees are distant cousins the estate will have to be administered by a public official called a Public Administrator. When the Public Administrator completes the estate administration or estate settlement, an Accounting Proceeding is filed with the Court. It is at this point that the persons claiming to be distributees, such as the cousins, must prove their status in a Kinship Hearing.

When a client confers with me about an estate plan or preparing a Last Will, one of the important items of information I ask for is a family tree or kinship data. Based upon the information provided, a person’s estate plan can be structured by the use of a Living Trust or other plan to avoid post-death complications where kinship data is missing or hard to obtain. It is always a benefit to confer with a qualified New York Estate and Trust lawyer to discuss issues regarding beneficiary designations and planning strategies.

The final estate administration and intentions of a person can be disrupted where Court proceedings are complicated or delayed because all of the parties that need to be notified cannot be determined or located.

Determining the identity of a person’s next of kin can sometimes even involve the use of genetic or DNA testing. A recent article in Arts Beat on September 25, 2012 by Dave Itzkoff reported that a judge had recently ordered DNA testing for a man who claimed to be the brother of Sherman Hemsley, who had starred in the “Jefferson’s” television sitcom.

DNA testing is also authorized under Estates, Powers and Trusts Law Section 4-1.2 where a person claims to be the heir of a father who was not married to his mother. Needless to say, the determination of a person’s next of kin and the protection of the rights of estate beneficiaries can be very complex and consultation with experienced estate attorneys and even a genealogist is highly recommended.

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Executors, Trustees and Administrators in New York are commonly referred to as fiduciaries. Fiduciaries are the representatives of a trust or estate that are authorized by their appointment to act on behalf of the trust or estate.

The New York Probate Lawyer Blog has had many posts discussing actions of fiduciaries such as collecting assets, paying bills and taxes and making distributions of property. Whenever a Queens Executor or Manhattan Trustee or a fiduciary in any New York county performs his or her duties, they are required to follow and adhere to certain statutes and guidelines. New York Estates, Powers and Trusts Law (EPTL) Section 11-1.1 is entitled “Fiduciaries’ powers”. This statute sets forth many of the powers that are given to fiduciaries which include powers to: invest estate or trust property, manage or sell real estate, repair property and contest or settle claims. Generally, the powers provided by statute are quite extensive and a fiduciary is entrusted with using his or her judgment to exercise these powers in good faith. The statute also provides in paragraph (b) that the Court or the Will or Trust document can limit or provide contrary provisions to those stated in the statute.

As a New York Estate Lawyer, I have found that it is important for fiduciaries to fully understand and appreciate the responsibility that goes along with their appointment. Similarly, Estate Planning must include a thorough consideration of the qualifications of fiduciaries who are to be named by a Last Will, Living Trust or other document.

Acting as a fiduciary is not always easy and can involve the necessity of having to make difficult business decisions regarding an estate or trust asset. For example, issues may arise as to whether or not to sell shares of stock or real estate and at what price to sell. Investing assets, particularly in today’s volatile economic climate, is filled with uncertainty. The recent case of Matter of Boyer, decided by Surrogate James Pagones of the Dutchess County Surrogate’s Court on May 31, 2012 and reported in the New York Law Journal on June 26, 2012, shows some of the problems faced by fiduciaries.

In Boyer there were 3 trustees of a trust created under a decedent’s Last Will. Two of the three trustees desired to sell the decedent’s real estate which consisted of a farm. The 2 trustees also desired to evict the decedent’s friend from the property. Rather than move forward with these plans on their own, the trustees petitioned the Surrogate’s Court pursuant to Surrogate’s Court Procedure Act (“SCPA”) Section 2107, for direction from the Court.

SCPA 2107 is entitled “Court may direct as to value, manner and time of sale of property and give advice and direction in extraordinary circumstances.” Court’s are typically reluctant to substitute the Court’s judgment for that of a duly appointed fiduciary. Therefore, the Court in Boyer declined to advise the trustees as to whether and at what price the property should be sold and, instead, found that it was the trustees’ duty to exercise their own business judgment in deciding these issues.

Selecting the proper fiduciaries that will protect trust and estate property and beneficiaries’ interests is an important goal in estate planning. Trust and estate attorneys in New York help their clients in the process of selecting fiduciaries as well as providing guidance for fiduciaries who face tough administrative and estate settlement decisions.

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