A New York Estate Proceeding To Recover Property Must Relate to Estate Assets

One of the primary duties of an estate Executor or Administrator is to collect estate assets. Most of the time this activity is not complicated. For example, a fiduciary may just need to close the decedent’s bank account or brokerage account and deposit the funds into the estate bank account.

Sometimes this process can be more complicated, especially when the decedent’s assets are being withheld by a third party. This claimant may assert that he owns the property and that the decedent has no right to recover it. In other cases, the claimant may deny having the property in his possession.

The Surrogate’s Court Procedure Act (SCPA) provides a method by which a fiduciary can recover estate property.  These provisions are contained in SCPA section 2103 entitled “Proceeding by fiduciary to discovery property withheld or other information” and SCPA section 2104 entitled “Inquiry; trial and decree”. These sections of the estate law have been discussed previously in the New York Probate Lawyer Blog.

An interesting aspect of these types of matters was recently discussed by Manhattan Surrogate Rita Mella in a decision dated July 14, 2017 in the case of Matter of Tong.   In Tong, a limited administrator of an estate commenced a turnover proceeding against his brother.   The proceeding claimed that prior to the decedent’s death, the brother changed beneficiary designations on the decedent’s bank accounts.

With respect to the decedent’s IRA account the Court found that the account beneficiaries prior to the change were a charity and the decedent’s two sons. Therefore, even if the challenged change of beneficiary was invalidated, the IRA would be payable to the original beneficiaries, namely, the charity and the sons.

Due to the above facts the Court found that the decedent’s estate could not benefit from the beneficiary dispute regardless of the outcome. Therefore, the Court decided that the controversy was between living persons and that it did not involve the affairs of the estate. The Court dismissed the claim due to lack of subject matter jurisdiction.

The Tong decision is important because it is sometimes difficult to determine whether issues that surround the death of a person have an impact or concern his estate or whether the estate has no real concern in the outcome. If a dispute is only between living persons, the Surrogate’s Court will decline to accept the case. When reviewing and analyzing disputes concerning assets involving a decedent or issues with which a decedent may have been concerned, consulting an experienced estate lawyer can be helpful.

I have represented numerous clients in estate asset disputes in the Surrogate’s Courts. Call me new for a free discussion regarding your issues.   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 and Manhattan. 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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