The New York probate process is designed so that an Executor can be appointed to handle estate affairs. Until an estate Executor is granted letters testamentary by the Surrogate’s Court, no one has the legal authority to act on behalf of the decedent’s estate. Sometimes, preliminary letters testamentary can be obtained.
Obtaining a duly authorized fiduciary is important since such person can collect bank accounts, pay estate expenses and engage in other transactions to facilitate estate settlement. Sometimes, the terms of a Will provide that a share of the estate is to be paid to a Trustee. This type of trust is called a testamentary trust. The terms of the trust are set forth in the Will provisions. In order for the transfer of assets from the estate to the trust to occur, a trustee must be appointed to handle the trust administration.
The appointment of an executor and a trustee, as well as other estate fiduciaries such as an administrator, is important since it identifies the person who has the legal authority to act pursuant to his appointment.
The New York Probate Lawyer Blog has posted numerous articles concerning the various assets that can be owned by an estate, as well as a trust. The duly appointed fiduciary is the only person who can legally collect or otherwise dispose of these assets. The importance of specifically identifying the proper fiduciary in a real estate transaction was the subject of a recent case decided by Nassau County Supreme Court Justice Julianne Capetola on August 9, 2017 entitled Leonard H. Shapiro Revocable Living Trust v. Achenbaum. It is very common that an estate or trust wants to sell a piece of real estate typically in the form of residential property. In Achenbaum, the owners of the real estate were trustees of a testamentary trust that was created under a decedent’s Last Will. A contract of sale was entered into with the purchasers. However, the contract identified the seller of the property to be the person who was identified as the Executor of the estate and not as the trustee of the testamentary trust. When a dispute between the seller and the purchaser arose the purchaser commenced a lawsuit to cancel the contract and obtain a return of the downpayment.
Although the trust opposed the cancellation, the Court found that the Contract should be cancelled because it named the seller as the estate executor and not the trustee of the trust who was the true title holder. Since the contract was not signed for the benefit of the entity that actually owned the property which was the trust, the Court found that the contract was invalid.
I have represented many estates and trusts that have owned interests in real estate. In these matters, I have prepared many real estate contracts and assisted my clients throughout the deed closing process. If you have a question regarding the sale of real estate or other real estate problems concerning an estate or trust, please call me for a free review.
New York City estate attorney Jules Martin Haas, Esq. has been representing clients in Probate and Estate Administration proceedings in Manhattan and Queens Counties throughout the past 30 years. If you or someone you know is involved with or has questions about a Last Will or other aspects of Probate or Estate Administration, please contact me at (212) 355-2575 for an initial consultation.