Major issues that often arise in connection with estate settlement concern the identity and value of a decedent’s property. In many estates, a decedent engages in estate planning and asset transfers during the months or even days before death. Estate planning and/or transfers may occur for very legitimate reasons. Concerns may arise as to tax planning which might include a need to take advantage of a change in tax laws or to account for a change in the value or nature of a decedent’s estate.
In other situations, a person may be experiencing a health or medical concern and desire to formulate a plan which can take advantage of requirements to receive Medicaid or other governmental benefits. Another basis for a decedent’s planning activities may involve the need to alter beneficiaries or make changes to a Last Will or other documents due to the death or disability of a beneficiary or nominated Executor or Trustee.
As it turns out, many of these pre-death changes may adversely affect the interests to be received from an estate by a potential beneficiary. A person who may be a possible recipient of a large financial benefit learns that shortly before death, a decedent made changes which drastically reduced his financial beneficial interests. When this occurs, there is a high probability that estate litigation in the Surrogate’s Court will occur regarding these changes. This is especially so where a decedent is elderly and experiencing poor health.
A recent Queens estate case provides insight into the issues raised regarding pre-death transfers made by an agent using a Power of Attorney. Estate of Kokotos was decided by Referee C. Raymond Radigan on January 17, 2023. Referee Radigan is a former Surrogate of Nassau County and had been appointed by Queens Surrogate Peter Kelly to decide this matter. In Kokotos, the decedent had owned certain Queens real estate which was transferred into the decedent’s LLC. Shortly before the decedent’s death, her agent, under a Power of Attorney, transferred the decedent’s interest in the LLC to the agent’s wife. A turnover proceeding was commenced to have the LLC transfer voided.
The Referee was provided with extensive testimony regarding the creation and execution of the Power of Attorney, as well as the circumstances surrounding the execution of the Power of Attorney. There was conflicting evidence dealing with the validity of the POA. However, the Referee’s conclusion was that there was a lack of clear and convincing evidence to show that the decedent intended to make a gift of the LLC interest to the agent’s wife. Also, the Referee found that the alleged gift was not shown to be in the decedent’s best interest such as to provide for any tax or financial planning. Thus, the Referee found that the transfer of the LLC interest to the agent’s spouse was invalid.
The Kokotos case reflects how pre-death transfers of a decedent’s assets may be invalidated. The New York Probate Lawyer Blog has published many articles regarding estate turnover proceedings and how estate administration can protect the interests of estate beneficiaries. In this case, the decedent died intestate and so the decedent’s next of kin benefited by the voiding of the transfer.
Do you have a question regarding an estate or property transfer? Call me NOW for a free, confidential review of your issue. We provide reasonable and flexible fee arrangements and personal representation.
New York Trusts and Estates Attorney Jules Martin Haas has helped many clients over the past 40 years resolve issues relating to guardianship and probate and estate settlement throughout New York City including the Bronx, Queens, Brooklyn, Manhattan, Nassau and Suffolk County. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial free consultation.