As a way for an individual to avoid burdening his or her surviving family members with the task of probating a Will and probate fees after death, New York law allows the creation of the inter vivos trust, also called the living trust. A living trust is an arrangement under which one person, called a trustee, holds legal title to property for another person, called a beneficiary. This estate planning option essentially allows surviving family members to avoid probate court to disperse the decedent’s assets to the appropriate heirs. New York has not adopted the Uniform Probate Code, which simplifies the probate process. Therefore, creating a living trust is an appealing estate planning method in order to avoid the complexities of the probate process in New York.
Perhaps this was the objective of 98-year-old Mary Kantorowski when she signed a deed transferring her home into a trust. As reported by The Connecticut Post, Probate Court records reveal that in 1996, Mary and her husband, John Kantorowski, agreed to transfer the house to a trust administered by their son, Peter Kantorowski, with the condition that Mary would live there until her death, and that upon her death the house would go to Peter and his younger brother, Jack. Despite the provisions of the trust, Peter quitclaimed the house to another trust under his control, ultimately giving him ownership of the house. As a result of her failure to fully understand the contents of the deed that had transferred her home into a trust, Mary was served with papers to evict her from her home by her own son in 2011.
In relation to the duties of a trustee, New York has adopted the Prudent Investor Act, provided in Estates, Powers and Trusts Law section 11-2.3. Pursuant to this act, the trustee is obligated to “exercise reasonable care, skill, and caution” in making investment decisions on behalf of the trust. NY EPTL § 11-2.3 (b)(2). The “exercise of reasonable care, skill, and caution” will be defined in light of the circumstances at the time the decision was made or action was taken by the trustee. NY EPTL § 11-2.3 (b)(1).
In applying New York’s Prudent Investor Act to this particular case, the issue is whether Peter Kantorowoski, the trustee, did in fact act in the best interest of his mother when he put the home up for sale. In his defense, Peter argues that attempting to evict his mother and putting the home up for sale was in the best interest of his mother due to her old age. He claimed it would be best for her to live in a nursing home. The sequence of events demonstrates that there was nothing to prevent Peter from transferring the home out of the trust. Of course, Ms. Kantorowski disagreed and argued that the move was simply an attempt by her son to take advantage of the situation. Unfortunately, many local seniors continue to be taken advantage of in this way on a seemingly daily basis.
In order to invoke the benefits of a living trust as a method of estate planning and to avoid unfortunate situations such as the one depicted in this particular case, it is imperative for the individual creating the living trust to understand all the provisions of the trust. Therefore, due to the intricacies of New York estate planning, it is in an individual’s best interest to seek the advice of an experienced estate planning attorney in order to ensure that his or her rights are being optimally protected.
New York City Trusts and Estates Lawyer Jules Martin Haas, Esq. has been representing clients in Probate and Estate Administration proceedings throughout the past 30 years. He is available to help residents in many areas, including Manhattan, Queens 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 or e-mail me at firstname.lastname@example.org.