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Intestate Rights Apply to Surplus Funds after a Foreclosure

Estate-Administration-300x200There are many issues associated with the settlement of a New York estate.  In many cases it is not clear as to who is the authorized or designated person entitled to administer an estate.  If a decedent left a Last Will and Testament, the document typically nominates an Executor to handle estate affairs.  When a decedent dies intestate without a Will, usually the next of kin step forward and take action to receive letters of administration.

However, there are frequent situations when there is no Will and no one takes any action to begin estate settlement.  In these cases, a Public Administrator accepts the role of handling an estate.  A Public Administrator is a government official whose job it is to administer the estates of people where there is no one either willing or eligible to do so.  Each county has its own separate official.

When an estate is un-administered for a period of time, it may be subjected to adverse consequences.  For example, taxes may go unpaid and there may be penalties and interest charges.  Mortgages may be delinquent and a foreclosure can occur.  One of the duties of an estate fiduciary is to collect and protect assets.  Also, an estate administrator, like a Public Administrator, needs to determine the identity of a decedent’s distributees (next of kin) so that a proper distribution of estate funds can be made.  All of the aspects of finalizing an estate can become very involved.

A recent Bronx estate case decided by Supreme Court Justice Adrian Armstrong is an example of the various problems which can arise in estate matters.  In NYCTL 1998-2 Trust v. Bronx County Public Administrator, decided on April 20, 2022, a decedent’s real estate was the subject of a foreclosure due to nonpayment of real estate taxes.  After the foreclosure sale, there were surplus funds available following the satisfaction of the property tax liability.  Through various aspects of the foreclosure process, an issue arose as to whom the surplus funds were to be paid.  One party claimed that it had received a deed from the decedent’s only known heir, and therefore, was entitled to the surplus.  However, the Court referee and the Public Administrator asserted that there was an issue as to whether the decedent had a spouse and possibly other heirs.  Since a full determination needed to be made regarding the decedent’s kinship, the Supreme Court granted an application to transfer the case to the Surrogate’s Court for further proceedings pursuant to CPLR 325(a) which provides that an action can be removed from Supreme Court to the Surrogate’s Court where it “affects the administration of a decedent’s estate”.

The New York Probate Lawyer Blog has published many articles regarding the necessity to identify a decedent’s next of kin.  Such requirement applies both to probate cases and estate intestate matters.  Finding a decedent’s distributees can be an arduous task.  In many instances it is necessary to obtain the services of a professional genealogist.  Such professionals can perform extensive research for death, birth and marriage records, as well as other evidence such as obituaries and probate filings.  These investigations may need to be conducted in out-of-state locations and even in other countries.

I have represented clients in many probate and administration cases where kinship had to be established.  Sometimes a kinship hearing is required by the Surrogate’s Court.  Call Me Now for a free confidential review of your probate or other estate problem.  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 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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