A decedent may leave many types of estate assets. Some of these items that are held in the decedent’s name alone will be payable to the executor or administrator as part of the administration estate. Other assets such as life insurance or pension proceeds may be payable to designated beneficiaries. The New York Probate Lawyer Blog has many posts regarding estate assets and administration.
It is interesting to know that these designated beneficiary assets may result in complicated issues which involve both the rights of the named payees and other estate interests. In particular, these issues are often present when a decedent has retirement or death benefits with the New York City Employees’ Retirement System commonly referred to as NYCERS.
I have represented many individuals and estates in connection with NYCERS benefits. A recent Brooklyn Estate case entitled Matter of Castagno, decided on May 4, 2018 by Brooklyn Surrogate John Ingram, provides a typical example of the numerous problems that can arise in NYCERS cases.
In Castagno, the decedent, who worked for the New York City Department of Sanitation, had designated his mother and former girlfriend as equal beneficiaries of his NYCERS death benefits. Afterward, the decedent got married and had a daughter. While the decedent had intended to change his NYCERS beneficiary statement and was in the process of doing so, he died before the written designation was notarized and filed with NYCERS. This was a requirement to change the beneficiary designation.
In the Court case, the wife sought to have all of the death benefits paid to her and the daughter claiming that it was the decedent’s intent to change the beneficiaries and the girlfriend and mother would be unjustly enriched by receiving a share of these benefits.
It is noted that the wife had filed with the Surrogate’s Court a Notice of Election which took advantage of the spousal Right of Election provided by Estates Powers and Trusts Law Section (EPTL) 5-1.1-A entitled “Right of election by surviving spouse”. The Right of Election provides a spouse with the ability to be paid the larger of $50,000.00 or one-third (⅓) of the decedent’s net estate.
The Court reviewed all of the above facts and found that the NYCERS requirements for a signed, notarized and filed change of beneficiary form were mandatory. Therefore, the decedent’s mother and girlfriend, as the current designated beneficiaries, had the right to receive the death benefits subject to the spouse’s one-third (⅓) Right of Election share.
The Castagno case should provide some guidance to individuals involved in estate planning and estate distribution. First, it is very important that all types of beneficiary designations be researched and reviewed when doing a Last Will and preparing an estate plan. All designations should be completed and corrected as soon as possible.
Also, a surviving spouse has certain estate rights even when assets are left to others whether in a Last Will or by beneficiary designations or joint accounts. The settlement of an estate requires that all of the surviving spouse’s claims be reviewed and resolved.
There are many estate litigation matters involving NYCERS benefits and the Right of Election. Call me now for a free review if you have a question regarding a NYCERS claim or spousal rights. New York Probate Attorney Jules M. Haas has helped many clients over the past 30 years resolve issues relating to intestate estates and spousal rights. If you or someone you know is in need of assistance regarding a Queens, Manhattan or other New York Estate matter or have any questions regarding such proceedings, please contact me at (212) 355-2575.