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nycSurrogatesThe process of administering an estate in the Surrogate’s Court may involve numerous proceedings.  Initially, it may appear that only two main proceedings exist when a person dies.  One type of proceeding is called probate.  This situation arises when a person leaves a Last Will and Testament.  A Will must be admitted to probate in order for its provisions to take effect.

Another type of proceeding is known as administration.  This occurs when a person dies intestate – without leaving a Will.  In these cases, the decedent’s next of kin are designated in the estate laws to receive a share of the estate.

While these two proceedings dominate what is typically viewed as an estate case, there are numerous other proceedings which may occur in Surrogate’s Court.  For example, a person may commence a proceeding to compel a third party to file a Will with the Court.  Also, before an estate is settled, there may need to be a kinship proceeding to determine a decedent’s heirs.  Kinship cases can take place inside both probate and intestate administration matters.  Additionally, an accounting proceeding may be needed to finalize an estate and determine the shares of an estate to be distributed.

Spousal-Rights-300x181A very common aspect in New York estate settlement and estate litigation concerns the rights of a surviving spouse.  The New York Probate Lawyer Blog has published numerous posts concerning spousal rights and decedent’s estates.

Estate lawyers in New York are aware that state statutes such as the Estates, Powers and Trusts Laws (EPTL) and the Surrogate’s Court Procedure Act (SCPA) provide a surviving spouse with certain preferential rights.  For instance, if a person dies intestate without a Last Will and Testament, EPTL Section 4-1.1 entitled “Descent and distribution of a decedent’s estate” provides that a surviving spouse receives the first $50,000.00 of the estate and fifty percent (50%) of the balance of the estate to be distributed.  Also, if a decedent leaves a Last Will but fails to provide for a spouse, EPTL Section 5-1.1-A entitled “Right of election by surviving spouse” allows a disinherited spouse to elect to receive one-third (1/3) of the estate.  This election includes assets defined as testamentary substitutes which include items such as joint assets.

Spousal rights are provided in other areas such as estate tax.  For both New York and Federal estate tax, generally, all assets left to a surviving spouse are subject to a full marital deduction and not subject to estate taxation.

Probate-2-300x200Estate planning in New York can include the preparation of a number of documents.  A person may create a Last Will and Testament, a Power of Attorney, a Living Will, a Living or Grantor Trust and a Health Care Proxy.

The most basic paper which should be considered is the Last Will.  This is the document which sets forth the testator’s intentions regarding the disposition of the probate estate.  It should always be kept in mind that a Will controls the disposition of assets held in a decedent’s name alone.  Assets which are transferred by operation of law such as joint assets are not controlled by the Will provisions.  The same concept applies to items such as life insurance or retirement accounts which may be paid on death to designated beneficiaries.

The New York Probate Lawyer Blog has published many articles regarding the preparation and probate of Wills.  There have been numerous blog posts concerning the statutory requirements for signing a Will.  These requirements are contained in Estates, Powers and Trusts Law (EPTL) Section 3-2.1 entitled “Execution and attestation of wills; formal requirements.”

nycSurrogatesEstate planning in New York is important for the proper disposition of a person’s assets.  Planning an estate encompasses a broad array of considerations.  The New York Probate Lawyer Blog has published many articles on this topic.  Initially, the preparation of a Last Will and Testament is the central document when creating a plan.  A Will disposes of assets that are owned by a testator at death in his name alone.  Thus, assets which pass automatically to others by operation of law such as joint property or items which have designated beneficiaries such as retirement accounts, life insurance or other pay on death funds, are not generally controlled by the terms of a Will as long as the beneficiary survives a decedent.

In view of various rules regarding property disposition, it is imperative that any estate plan take into account the ownership and title of assets which are intended to be disposed of under a Will.  A recent Manhattan estate case, decided by Manhattan Surrogate Rita Mella on February 23, 2023 entitled Estate of McAulay, demonstrates the issues that may arise when a decedent’s asset ownership conflicts with the provisions of a Will.

In McAulay, the terms of a Will provided for equal distribution of a portion of the decedent’s residuary estate to four (4) individuals.  At the time of death, the decedent owned certain California real estate with one of the beneficiaries as joint tenants.  As a result, the California property passed to the joint owner by operation of law outside of the Will.  An issue was raised as to whether the value of the California real estate should reduce the amount of the share of the residue the beneficiary was to receive.

Estate-Settlement-300x200 There are many different rights which appear in the New York Trust and Estate laws.  The basic statutes concerning estate law and procedure are contained in the Estates, Powers and Trusts Law (EPTL) and the Surrogate’s Court Procedure Act (SCPA).

A surviving spouse of a decedent benefits from a number of provisions in the estate laws.  For example, if a person dies intestate (without a Last Will and Testament), EPTL 4-1.1 entitled “Descent and distribution of a decedent’s estate,” provides that a surviving spouse is entitled to receive, essentially, one-half of a decedent’s estate if there are also surviving children.  In the event no children are surviving, then the spouse has top priority and inherits the decedent’s entire estate.

SCPA 1001 entitled “Order of priority for granting letters of administration,” is another provision where a spouse has priority benefits.  This statute provides that a spouse is to be appointed as the administrator of an intestate estate before any other heir.  The New York Probate Lawyer Blog contains many articles discussing executors and administrators and estate settlement.

shutterstock_74680495-2-1-300x200An interesting aspect of New York estate law and practice is its intersection with other areas of law.  For example, the New York Probate Lawyer Blog contains numerous articles discussing issues concerning the appointment of a guardian for personal needs and property management under Article 81 of the Mental Hygiene Law.  In many cases, a decedent, due to advanced age or disability, may have been the subject of a guardianship proceeding prior to death.  Such proceeding may have dealt with issues regarding a decedent’s capacity or assets which may be directly related to post-death matters concerning the validity of a Last Will and Testament or pre-death transfers of property.

Similarly, prior to death, a decedent may have been involved in a divorce or other matrimonial action which may have been litigated and/or settled.  Issues and factual matters may have been raised in such cases which could impact upon Surrogate’s Court proceedings and the settlement of a decedent’s estate.  As a threshold matter, a divorce would sever and terminate most spousal and inheritance rights between the parties.  Also, matrimonial litigation might disclose the nature and value of assets which may be a part of a decedent’s estate.  These facts might impact both probate proceedings and intestate administration proceedings.

An example of the impact a pending divorce might have on estate administration was recently shown in a Bronx estate case entitled Estate of Wood decided by Bronx Surrogate Nelida Malave-Gozalez on February 3, 2023.  In Wood, the decedent and his spouse had entered into a stipulation of settlement with regard to a pending divorce action.  The stipulation was fully executed.  However, before a judgment of divorce was entered in the divorce action, the decedent died.  One of the primary issues which was presented to the Court was whether the terms of the stipulation were enforceable notwithstanding the death of the decedent.  This was an issue because the basic rule is that the death of a party abates a divorce action unless the entry of the judgment was only a ministerial act to be completed by the Court.

nycSurrogates Major issues that often arise in connection with estate settlement concern the identity and value of a decedent’s property.  In many estates, a decedent engages in estate planning and asset transfers during the months or even days before death.  Estate planning and/or transfers may occur for very legitimate reasons.  Concerns may arise as to tax planning which might include a need to take advantage of a change in tax laws or to account for a change in the value or nature of a decedent’s estate.

In other situations, a person may be experiencing a health or medical concern and desire to formulate a plan which can take advantage of requirements to receive Medicaid or other governmental benefits.  Another basis for a decedent’s planning activities may involve the need to alter beneficiaries or make changes to a Last Will or other documents due to the death or disability of a beneficiary or nominated Executor or Trustee.

As it turns out, many of these pre-death changes may adversely affect the interests to be received from an estate by a potential beneficiary.  A person who may be a possible recipient of a large financial benefit learns that shortly before death, a decedent made changes which drastically reduced his financial beneficial interests.  When this occurs, there is a high probability that estate litigation in the Surrogate’s Court will occur regarding these changes.  This is especially so where a decedent is elderly and experiencing poor health.

shutterstock_74680495-2-300x200The settlement of a New York estate may involve many different proceedings and issues.  Initially, a proceeding needs to be commenced in the Surrogate’s Court to have an executor or administrator appointed to handle estate affairs.  This includes the identification and collection of assets and the payment of claims and expenses.  The New York Probate Lawyer Blog has published many articles discussing estate settlement.

The collection of assets is typically straightforward.  A decedent’s bank account or other financial funds are obtained and deposited into an estate bank account held in the name of the administrator or executor.  If a decedent owned real estate such as a house, the property can be sold so the proceeds can be collected and distributed to the beneficiaries of the estate.

There are occasions when a decedent’s assets are not easily identified or collected.  In many cases, prior to a decedent’s death, assets may have been misappropriated by a third party or transferred to others under questionable circumstances.  It is not uncommon to find that a Durable Power of Attorney was used to withdraw funds before a decedent’s death.  There are many cases involving undue influence and financial or elder abuse whereby a person’s assets may be improperly obtained prior to death.

Guardianship-300x201The appointment of a Guardian for personal needs or property management is provided for by Article 81 of the Mental Hygiene Law.  This statute contains the numerous provisions regarding the procedure and substantive law for a New York Guardianship.  The New York Probate Lawyer Blog has published many articles regarding Guardianship issues.

As a recap, a Guardianship is appropriate when a person is found to be incapacitated. Incapacity is viewed in a functional setting dealing with a person’s ability to handle his various activities of daily living.  These activities include activities such as taking care of financial affairs, personal hygiene, shopping, and attending to health care and providing for meals.  When a person cannot functionally care for themselves, and lacks the insight as to their welfare and would be at risk if a Guardian is not appointed, then a Court will see that a Guardian is needed.

When a Guardianship petition is filed, the Court usually appoints a Court Evaluator to investigate the case, and sometimes, an attorney to represent the interests of the alleged incapacitated person (“AIP”).  Article 81 requires that clear and convincing evidence be presented before a Guardian is appointed.  This is due to the inherent removal of certain liberties which a Guardianship requires.  The least restrictive form of intervention is allowed and the AIP’s interests are of paramount importance.

accounting-300x199There are a number of aspects to the settlement of an estate.  The New York Probate Lawyer Blog has examined these matters in detail in many earlier posts.  The first stage of an estate is to obtain the appointment of a fiduciary.  This involves a petition to appoint an executor or administrator.  An executor is appointed when a decedent leaves a Last Will and Testament.  If there is no Will, a person dies intestate and the Court appoints an administrator.  The Estates Powers and Trusts Law and the Surrogate’s Court Procedure Act contain an extensive array of statutes regarding the manner by which an estate fiduciary can be appointed.

The next stage concerning the settlement of an estate deals with the collection of estate assets and the payment of debts, claims and other administration expenses.  Of course, each estate is different and some situations may involve Surrogate’s Court litigation of contested claims, or the sale of a decedent’s real estate, the payment of estate or income taxes or the collection of assets from various bank accounts and other financial holdings.

The third and final part of settlement is known as the accounting stage.  A fiduciary such as an administrator or executor must prepare a detailed accounting of his activities.  This accounting shows the various assets which were collected, the amounts paid or expended and the value of the assets remaining on hand to be distributed to the beneficiaries.  The parties who are interested in an estate have a right to receive and review an accounting.  Objections to an accounting can be made if any actions or transactions are disputed.  When a fiduciary fails to provide a proper accounting, a beneficiary or interested party may commence a proceeding in the Surrogate’s Court to compel or force the fiduciary to file an accounting.  SCPA § 2205 entitled “Compulsory account and related relief on a court’s own initiative or on petition; who may petition” provides the authority for requiring an accounting.  Compelling an accounting is a very effective way for a person who is to receive an estate benefit to force the fiduciary to complete estate administration and to distribute assets.

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