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Did You Know That an Executor or Administrator May Make an Advance Payment to a Beneficiary?

1216424_supreme_court_new_yorkDuring the course of estate administration, the beneficiaries of an estate may need to wait many months or even years before their beneficial interests are paid.  In many instances a lengthy delay may cause a hardship to a beneficiary, especially when the beneficiary was dependent upon the decedent for support or the decedent’s death impacted the financial stability of the beneficiary.

In many cases of estate administration, the executor or administrator or preliminary appointee may voluntarily make an advance distribution to a person who is in need.  This tends to be a common occurrence when all of the interested parties are cooperative and there is no contentious estate litigation occurring.  However, when a fiduciary refuses to help a beneficiary who is in need, the Surrogate’s Court Procedure Act provides a procedure whereby an application can be made to the Court for an advance distribution.

SCPA 2102 entitled “Proceedings for relief against a fiduciary” contains a paragraph 5 which allows the commencement of a proceeding to force the payment in advance of an estate share when the estate “exceeds by at least one-third” the sum needed to pay other claims, debts and legacies.  The applicant must demonstrate that such payment is required for his education or support for him or his family.  This statute gives parties interested in an estate an important right to maintain financial stability during a long period of estate settlement.

The Surrogate’s Courts are sensitive to the needs of beneficiaries.  A recent Manhattan estate case decided by Manhattan Surrogate Rita Mella reflects some of the issues in these proceedings.  In Matter of the Estate of Neumann, decided on August 7, 2019, a daughter of the decedent had petitioned the Court for an advance distribution of $750,000.00 from the estate of her mother which had a value in excess of $29,000,000.00.  The petitioner’s sister and father sought to have the petition dismissed.  In reviewing the evidence, the Court found that based upon the financial figures presented, the petitioner’s request satisfied the statutory requirement of the estate property exceeding by at least one-third (1/3) the amount of claims and legacies.

In addition, the daughter had claimed that she needed help for support because she and her family were removed from her long-term residence and she and her children were being cut off from support by family trusts.  Based upon this information, the Court refused to dismiss the daughter’s application and directed that a hearing be held concerning whether the daughter’s financial need qualified for the payment under the statute.

Dealing with estate and trust matters can be complicated for fiduciaries and beneficiaries.  The various Surrogate’s Court procedures and estate laws need to be examined carefully and properly presented to a Court in a complete fashion.  Call Me Now for a free confidential review of your estate or probate 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.

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