The initial steps that are typically taken with regard to estate settlement concern the appointment of a fiduciary. The fiduciary can be an executor when there is a Last Will and Testament or an Administrator when a person dies intestate.
In order to be appointed by the Surrogate’s Court as a fiduciary a person must meet certain qualifications. Surrogate’s Court Procedure Act (SCPA) section 707 entitled “Eligibility to receive letters” provides basic criteria for a fiduciary. This statute states, in part, that a person is ineligible to receive letters if they are an infant, incompetant or a non-domiciliary alien. Also, a felon is ineligible. The letters that are referred to include Letters Testamentary, Letters of Administration and Letters of Trusteeship. There is an expansive definition of “Letters” in SCPA section 103 (34).
While many individuals may be eligible to receive Letters and be appointed as a fiduciary, there may be additional qualifications that must be met to complete the appointment. SCPA section 708 entitled “Qualification of fiduciaries” provides among other matters, that the appointee obtain a “bond” that may be required by the Court or under the law. The New York Probate Lawyer Blog has discussed the issue of Surety Bonds in earlier posts. There may be a requirement by the Court to obtain a Letters of Administration Bond. This is very common.
The purpose of the Bond, which is issued by a Surety company, is to provide insurance against the fiduciary mishandling the estate assets. It provides protection for the estate beneficiaries. The amount of the Bond is usually determined based upon the value of the estate assets. The Surety companies have many requirements regarding the issuance of a Bond. The primary requirement is that the potential executor or administrator or trustee have a good credit rating. Sureties are reluctant to issue Bonds to poor credit risks.
In a recent Staten Island estate case, the Surrogate required that a Preliminary Executor obtain a Bond. The Court also restricted the ability of the Preliminary Executor to disburse estate assets. In Matter of Estate of Stojanowski, decided on June 24, 2019 by Richmond County Surrogate Matthew Titone, the Court imposed these requirements because there were two conflicting Wills executed on the same date. SCPA section 1412 entitled “Preliminary letters testamentary” contains a provision which gives the Court discretion to require the posting of a bond.
I have represented many persons who need to file a Bond in order to qualify for their appointment as an Executor or Administrator. In these cases I assist the client by contacting the Surety Companies and providing information and guidance regarding the Bonding Process. Call me now for a free discussion regarding your estate or Bond 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 30 years resolve issues relating to probate and estate settlement throughout New York City including Queens County and Brooklyn. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial free consultation.