The administration of a New York Estate requires the resolution of many different types of issues. During his lifetime a decedent may have been involved in activities that resulted in claims or debts that are unresolved at the time of death. For example, a person may have incurred credit card obligations or other credit related debt that is unpaid. In other situations, the decedent may have been an owner of a business or have had business transactions for which he was monetarily responsible.
Also after a person dies the Executor or Administrator has a fiduciary obligation to determine the decedent’s financial obligations and satisfy creditors. Of course, the fiduciary also has a duty to determine to what extent these debt obligations are valid and enforceable.Sometimes, the validity and amount of a decedent’s debts is easy to figure out. The balances due on a credit card or similar type of financial obligation can be reviewed and paid without extensive examination. On the other hand, the amount of complicated business or personal loan transactions or claims arising out of litigated demands for damages can be extremely hard to finalize. It is not uncommon that these types of matters need to be resolved through Estate Litigation.
One procedure to resolve disputed claims is through the Estate Accounting process. The New York Probate Lawyer Blog has previously discussed Accountings in Surrogate’s Court. An estate fiduciary has an obligation to provide all of the estate beneficiaries with a full accounting of all of the transactions that occurred during the course of estate settlement. The fiduciary can include creditors as part of the accounting proceeding so that a final determination can be made as to these claims.
Another procedure for the resolution of estate disputes is found in Article 18 of the Surrogate’s Court Procedure Act (SCPA) which is entitled “Claims; payment of Debts and Funeral Expenses”.
A recent case decided by Brooklyn Surrogate Margarita Lopez Torres reflects the use of these statutory provisions. In Matter of Pazushko, decided on February 4, 2016, a claimant filed a petition to determine a claim against the decedent’s estate that was based upon a judgment the claimant obtained in Russia against the decedent for defaulting on the repayment of a loan.
After the estate fiduciary rejected the claim the Court dismissed the petition because the creditor was required to pursue a different type of Court procedure which required the claimant to convert the Russian judgment into an enforceable judgment in New York. The Court held that such procedure was not one to determine the validity a claim pursuant to Article 18.
I have represented many fiduciaries in Estate Litigation regarding the validity of creditor’s claims. If you have a question regarding an estate claim or estate administration call me now for a free consultation.
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 Manhattan and Brooklyn. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial consultation.
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