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New York Discovery Proceedings Allow A Fiduciary to Find Estate Assets

One of the most commonly utilized procedures to assist an estate Executor or Administrator to locate and obtain estate assets are the provisions provided by Surrogate’s Court Procedure Act (SCPA) 2103 and 2104.   SCPA 2103 is entitled “Proceeding by fiduciary to discover property withheld or obtain information” and SCPA 2104 is entitled “Inquiry; trial and decree”.

These two statutes when read together provide a two stage method for the discovery and turnover of any assets that are owned by a decedent. The New York Probate Lawyer Blog has discussed this issue in a number of prior posts.Pursuant to SCPA 2103 a fiduciary has the initial right to obtain an Order from the Court that allows the fiduciary to obtain information from any person who may have possession or control over an estate asset or the proceeds of such asset. Additionally, the fiduciary may obtain discovery from any person who has information or knowledge regarding such estate asset. Typically, the examination of such person is in the nature of a deposition although Courts have allowed a fiduciary to obtain documents as well.

The Courts tend to allow a great deal of discretion to a fiduciary to search for estate assets and to make a SCPA 2103 inquiry. The information that the executor or administrator is required to provide to the Court to obtain an Order to examine is rather minimal regarding the decedent’s interest in the property.  Also, the fiduciary’s assertions can be based on mere information and belief.

The second stage of the discovery process involves an actual hearing and determination by the Court as to the ownership or title to an asset or proceeds where the estate is the claimant and a third party either claims ownership or not to be in possession of such property. Many of the cases involved in discovery proceedings relate to gifts that the decedent allegedly made before death. Simply stated, the estate’s position is that the decedent owned the property and never intended to gift it to the third party who now claims to have the right of possession. Since the decedent is no longer around to tell the Court exactly what the circumstances were that led to the third-party obtaining title or possession of the property, proof of ownership in these types of cases can be very complicated.

A discovery proceeding is viewed by the Courts as a cause of action that is more commonly known as one for conversion or replevin. These are lawsuits for the recovery of possession or title to property or proceeds of property. There are a number of defenses that a third party may rely on to defeat a discovery proceeding that is brought against him. One of the more common defenses is that the statute of limitations precludes the fiduciary from commencing the SCPA 2103 proceeding. Generally, the statute of limitation for these cases is three years. However, the three year period typically does not begin to run until a demand for the return of the property is made. There may also be additional factors that may make the computation of the limitation period rather complex. A recent case decided by Suffolk County Surrogate John Czygier on March 29, 2017 entitled Jones v. London provides a good example of the issues presented in a discovery proceeding. In Jones the Court denied a motion to dismiss the proceeding and found that the statute of limitation did not bar the proceeding from going forward.

Call me now for a free discussion regarding your estate or probate issue. I have represented many clients in connection with discovery proceedings as well as other Surrogate’s Court and estate litigation matters.

New York City Trusts and Estates Attorney Jules Martin Haas has helped many clients over the past 30 years resolve issues relating to probate and estate litigation 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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