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Important Information Regarding Collecting New York Estate Assets

Among the many fiduciary duties that an Executor or Administrator must perform is the duty to locate and collect estate assets.  There are a variety of assets which include bank accounts, security accounts, retirement funds, business interests, life insurance, annuities and real estate.   In New York, along with real property such as a single family home, a decedent may own a cooperative apartment or a condominium unit.

The job of the fiduciary is to collect these assets and ultimately distribute them or their proceeds to the estate beneficiaries.   In most instances it is fairly easy to identify and collect funds particularly when they are held in bank accounts or other financial institutions in the name of the decedent.  The New York Probate Lawyer Blog has devoted numerous blog posts to asset collection and estate settlement.

However, there are occasions when identifying and collecting estate assets can present difficulties.  An interesting example of a problematic situation was discussed in a Manhattan estate case entitled Matter of Estate of Solano.  This case was decided by Manhattan Surrogate Nora Anderson on September 30, 2019.  In Solano, the decedent had purchased an interest in her cooperative apartment which was one of the Mitchell-Lama program cooperatives.  Under this program the purchaser paid a small initial price and, upon death, the owner’s estate was only entitled to receive back the value of the owner’s initial investment.

In recent years the Mitchell-Lama program was reconstituted to become a market-rate cooperative.   During the course of this process the cooperative unit owners, including the decedent, had the right to sign a Participation Agreement to become the owner of the apartment after the building became market rate.

The problem in Solano was that the decedent signed the Participation Agreement prior to death but died before the reconstitution of the cooperative was completed.   Due to this occurrence, the estate administrator commenced an estate turnover proceeding to have the market rate cooperative unit interest transferred to the estate rather than have the interest returned to the cooperative at the original low purchase price.

After reviewing the statutory and regulatory history relating to the cooperative conversion, and the reconstitution to market rate, the Surrogate determined that the decedent’s estate was not entitled to receive the market rate interest since the decedent died before the reconstitution was finalized.  The Court found the right to this more valuable interest was personal to the decedent and that the rules under the original pre- reconstitution plan required that the estate return the interest at the lower initial cost amount.

Solano demonstrates that administering an estate can be very complex and involve many facets of asset ownership.  Also, there may be various legal proceedings, such as a turnover proceeding to collect estate assets, that an Administrator or Executor must become involved with.  I have represented individuals in estate matters in Queens Estates, Brooklyn Estates, Manhattan Estates and Bronx Estates for decades.   Call me now for a free review of your issue or concern.  We offer reasonable and flexible fee arrangements and personal representation.

New York Trusts and Estates Attorney Jules Martin Haas has helped many clients over the past 30 years resolve issues relating to probate and estate settlement throughout New York City including Queens County, Brooklyn  and the Bronx.   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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