New York Probate Lawyer Blog

January 3, 2023

Estate Property May Be Sold to Pay Estate Expenses

An executor or administrator is responsible to complete estate settlement. There are many aspects to settling an estate. The fiduciary must identify estate assets and actively seek to collect the assets. Additionally, an estate representative must ascertain the various debts and claims which may be outstanding. Also, expenses of administering an estate must be paid. These expenses include various costs such as amounts needed to protect assets and to pay attorneys’ fees and accountant fees. There may also be costs associated with the sale of assets such as a house.

The fiduciary is obligated to perform these tasks for the benefit of the estate as a whole and cannot favor one beneficiary over another. There is a fiduciary duty to act properly to avoid a breach of fiduciary duty. The Estates, Powers and Trusts Law Section 11-1.1 entitled “Fiduciaries: Powers, Duties and Limitations” provides various rules in this regard. The New York Probate Lawyer Blog has published many articles concerning the role of an administrator, executor and trustee.

As noted earlier, a fiduciary must pay estate expenses. While expenses are paid from estate assets, sometimes there are not enough liquid assets to allow for payment. In such a case, assets may need to be sold. While in many cases, the sale of assets such as a house owned by a decedent may be a straightforward transaction, this is not always so. An interesting situation recently arose in an Erie County estate. Matter of Manchester, which was decided by Erie County Surrogate Acea M. Mosey on August 18, 2022, involved a proceeding to settle the accounting of the executor. One of the issues concerned the real estate which was owned by the decedent. The decedent’s Last Will and Testament had specifically devised the property to his daughter. Although the decedent died in 2013, the deed transferring the property to the daughter was filed in 2018. The problem, however, was that at the time of the deed transfer, there were extensive unpaid estate claims and administrative expenses. The real property was the only estate asset which could be used to pay these expenses.

December 23, 2022

A Will Must Be Probated to Transfer Real Estate

by Jules M. Haas

One of the most valuable assets in an estate is typically real estate. This asset is usually the decedent’s residence. Since real estate predominates as an estate asset, many aspects of real estate law can be involved in estate settlement. Also, estate litigation in the Surrogate’s Court often concerns this asset. Issues that arise may concern the following matters:

Title or ownership of the property.
Claims against the property. These claims may be in the form of an outstanding mortgage or liens which arise due to judgments against the decedent or unpaid taxes or property violations.

December 16, 2022

The Problems Transferring a Cooperative Apartment Owned by a Decedent

by Jules M. Haas

A decedent’s estate may consist of many types of assets. These may include bank and other types of financial accounts, retirement funds and real estate. Another very common asset owned by decedents is an interest in a cooperative apartment. A cooperative apartment, or co-op, is not real estate. In fact, the owner of a co-op owns shares of stock in a cooperative corporation. Due to such ownership, a person is entitled to be a lessee under a proprietary lease. The interest in a co-op is personal property just like owning shares of stock in Microsoft.

A co-op owner is subject to and controlled by the terms of the proprietary lease. Most importantly, unlike real property, typically a co-op cannot be transferred to another owner without the approval of the cooperative corporation. As a result, the transfer of a co-op either by a Last Will and Testament or through intestate administration is a very problematic issue in estate settlement. There is no assurance that the beneficiary in a Will or the decedent’s next of kin will qualify or be approved by the co-op management to become an owner. In the event there is no approval or the designated beneficiary does not want to become the owner, the co-op would need to be sold. The New York Probate Lawyer Blog contains numerous articles regarding the settlement of an estate, co-ops, and estate real estate.

If a co-op needs to be sold, board approval is required. The approval process for a purchaser can be very stressful for an estate executor or administrator. This is especially so where the co-op is subject to a mortgage and the estate does not have liquid assets to make the current payments. Also, monthly co-op maintenance charges must be paid. The co-op sale approval process may take months to complete. The co-op may reject the buyer with whom the estate contracted to sell the co-op. In such a case, the estate fiduciary would need to go back to square one and find a new buyer and endure the co-op approval process again. All the while, mortgage payments and maintenance charges may be accumulating and foreclosures may be threatened.

December 5, 2022

Recovery of Insurance Proceeds May Not Be Determined in Surrogate’s Court – The Issue of Jurisdiction is Paramount

by Jules M. Haas

After the death of an individual, a process of ascertaining and collecting assets needs to commence. Of course, the appointment of an estate fiduciary, whether executor or administrator, is essential to the asset collection process. In the event a delay is expected with regard to probating a Last Will or obtaining letters of administration in an intestacy, temporary appointments can be obtained. In a probate proceeding, the Court can appoint a preliminary executor. In an administration proceeding, a temporary administrator can be obtained.

One of the most important aspects of estate settlement is to determine which assets are recoverable by the estate. There are many assets which pass outside of an estate and are not subject to collection by the estate fiduciary. These items are transferred by operation of law and include joint assets with rights of survivorship, financial accounts which have designated beneficiaries, retirement accounts with named beneficiaries and life insurance with named beneficiaries. These types of assets are paid directly to the named payees and an estate fiduciary does not collect them. The New York Probate Lawyer Blog has published many articles concerning estate assets.

Situations arise where an administrator or executor needs to engage in estate litigation in the Surrogate’s Court in order to obtain access to and collect assets which are held by a third party. One common avenue to recover estate property is by a proceeding under Surrogate’s Court Procedure Act Section 2103 entitled “Proceeding by fiduciary to discover property withheld or obtain information.” However, in all proceedings in the Surrogate’s Court, the Court must find that it has proper jurisdiction to proceed. Jurisdictional issues are sometimes complicated.

November 22, 2022

It is Important to Recognize that Kinship is Always a Part of Surrogate’s Court Cases

by Jules M. Haas

The New York Surrogate’s Courts are presented with many different types of proceedings. Those proceedings include probate cases, intestate administration matters and accounting proceedings, just to name a few. There is a separate Surrogate’s Court located in various counties throughout the state. For example, there is the Queens County Surrogate’s Court, Kings County or Brooklyn Surrogate’s Court, New York or Manhattan Surrogate’s Court and the Bronx Surrogate’s Court.

The various matters that appear for determination invariably involve the identification of a decedent’s next of kin, also known as distributees. For instance, in a probate proceeding, the petitioner must identify, by name and address, the decedent’s distributees. This information is set forth in the probate petition. The decedent’s distributees must be made a party to the proceeding and unless they consent to the probate of a Will, they must be served with a Citation. These parties have a right to contest a Will.

When a decedent dies intestate without leaving a Last Will, distributees have a number of rights. First and foremost, pursuant to Estates, Powers and Trusts Law (“EPTL”) Section 4-1.1 entitled “Descent and distribution of a decedent’s estate,” next of kin have the right to inherit an estate based upon the priority established in the statute. Also, Surrogate’s Court Procedure Act (“SCPA”) Section 1001 provides for a list of persons who have priority to be appointed as the estate administrator. When a decedent leaves a Will, the provisions of the document usually provide for nomination of an Executor. However, when someone dies without a Will, the New York estate laws provide as to whom will act as the estate administrator.

November 11, 2022

New York Estate Litigation Involves Many Different Legal Concepts – Here, a Power of Attorney Involves the Creation of a Contract

by Jules M. Haas

New York estate litigation encompasses many different aspects of trust and estate law. Controversies may arise in many types of proceedings. In the case of a probate proceeding, the most obvious area of dispute concerns the validity of a Last Will and Testament. This type of controversy is known as a Will Contest. Other aspects of probating a Will which can cause adversarial effects include whether a certain person should be appointed as an Executor. Issues may also arise as to whether the language in a Will is clear or ambiguous. A construction proceeding may be needed after probate to settle issues regarding the meaning or intent of Will provisions. Another area of controversy may involve the right of election provided to a surviving spouse. A spouse who is disinherited in a Will can file an election to obtain what amounts to one-third (1/3) of a decedent’s estate. The calculation of a right of election can be complicated.

Intestate administration proceedings also garner a fair share of litigation. First and foremost, the determination of the kinship of a decedent is needed to determine the identity of the parties to the proceeding and the rightful heirs of an estate. Also, kinship will provide the status of the persons who have priority to serve as the estate administrator. These issues can range from whether a person is a distributee or whether an alleged spouse was married to a decedent or divorced or disqualified due to abandonment.

Another area where litigation is common involves estate accounting proceedings. All beneficiaries are entitled to receive an accounting from an executor or administrator. Objections to the accounting can be filed concerning the propriety of a fiduciary’s actions. Claims may be made regarding a breach of fiduciary duty.

November 4, 2022

Undue Influence in a Will Contest May Be Due to a Change in Testamentary Provisions

by Jules M. Haas

It takes a lot of time and effort to create a New York estate plan. A testator needs to fully access his assets and make decisions regarding the provisions to include in a Last Will and Testament. It is important to determine who is to be a beneficiary as well as the portion of the estate each beneficiary is to receive. Also, executors must be identified and alternative provisions should be included in the event a primary beneficiary predeceases the testator.

Once a person dies, a Will must be probated. A proceeding is filed in the Surrogate’s Court to have the Will validated so that its provisions become effective. During the course of the probate proceeding, interested parties may object to the probate of a Will. In such a case, a Will Contest ensues. A contested Will case involves specific aspects concerning a Will’s viability. The New York Probate Lawyer Blog contains many articles regarding probate and Will Contests.

A recent Brooklyn estate case entitled Matter of Grunwald decided by Brooklyn Surrogate Rosemarie Montalbano concerned a contested Will. In Grunwald, the Will in question was prepared and executed under the supervision of an attorney. The Court examined various issues surrounding admitting the Will to Probate. Initially, the Court examined whether the decedent had the requisite testamentary capacity. Such capacity requires that the testator understood that he was creating a Will as well as being aware of the extent of the testator’s property and the natural objects of his bounty. Although a person may be old or even suffering from illness such as dementia, capacity may still exist. The Court in Grunwald found that the testimony of the attorney and attesting witness satisfied the burden of showing capacity. The Court found that the Objectant did not refute such finding.

October 24, 2022

Did You Know that a Temporary Administrator Can be Appointed in a Probate Proceeding?

by Jules M. Haas

There are essentially two (2) different paths to follow for the appointment of a fiduciary after someone dies. In order to administer and settle an estate, there must be an executor or an administrator. If the decedent left a Last Will and Testament, then a probate proceeding is going to be filed in the Surrogate’s Court. This involves filing the original Will along with a petition for probate and other supporting papers.

In cases where there is no Will, the decedent is considered to have died intestate. As a result, a petition for letters of administration is presented to the Surrogate’s Court. The New York Probate Lawyer Blog contains many informative articles discussing issues concerning probate and intestate estate proceedings.

Unfortunately, the process to obtain full letters testamentary or letters of administration can take a number of months. Will Contests, kinship disputes, and other matters involving estate litigation may delay the finalization of these proceedings for long periods of time. The dilemma faced by a potential fiduciary and others interested in an estate is how to deal with current problems which can affect estate assets. For example, there may be pending proceedings in litigation concerning a decedent, or the need to sell or secure assets before values are compromised.

October 14, 2022

A Family Member is Usually the Best Guardian – But Not Always

by Jules M. Haas

Article 81 of the Mental Hygiene Law contains the provisions regarding the appointment of a Guardian. As discussed in many earlier posts in the New York Probate Lawyer Blog, the statutes provide for the appointment of a property management Guardian and also for a personal needs Guardian.

When an application is made to a Court for a Guardianship appointment, the Court is provided with a proposed Order to Show Cause and a verified petition. The information which is to be included in the petition is described in MHL 81.08. This information includes details concerning both the alleged incapacitated person and the petitioner. Also, the name, address and telephone number of any proposed Guardian should be supplied along with reasons why the proposed designee is suitable to act as Guardian.

The primary function of the Court in these matters is first and foremost to determine whether the AIP is incapacitated. Clear and convincing evidence is needed to show incapacity. MHL 81.02 entitled “Power to appoint a guardian of the person and/or property; standard for appointment” provides the guidance for these issues. Typically, a person’s functionality and ability to handle activities of daily living are closely examined.

October 6, 2022

Be Careful When Attempting to Modify or Alter a New York Last Will and Testament

by Jules M. Haas

Estate planning in New York involves many different aspects. Initially, a person needs to consider and develop the manner in which an estate is to be distributed. Decisions need to be made concerning the various beneficiaries who are to receive distributions. Also, the amount of payment to each beneficiary under a Last Will and Testament must be decided upon. Another aspect for review involves whether or not a Will should contain a testamentary trust in which the beneficiaries’ share would be held rather than paid out immediately in one lump sum. A trust can be established for a spouse, child or a third party beneficiary. Sometimes a Supplemental Needs Trust is established to preserve governmental benefits for a beneficiary with a disability.

An estate plan should be made with attention to estate settlement. Executors need to be named. Contingency provisions should be included such as alternate beneficiary provisions in the event of a change of circumstances such as the death of a beneficiary preceding the decedent.

There are situations when the actual provisions of a Will need to be changed either due to circumstances or preferences by the testator. In these cases, it is essential to remember that all Wills and alterations that are made on Wills must satisfy the requirements of Estates, Powers and Trusts Law Section 3-2.1 entitled “Execution and attestation of wills; formal requirements.” This provision sets forth requirements regarding the signing of a Will and the need for two attesting witnesses. Sometimes a person may prepare and execute a Codicil to a Will. A Codicil is an amendment to a Will which needs to satisfy the EPTL 3-2.1 execution requirements. Since the Codicil and the original Will need to be read together, there is the possibility that the language in the two documents may be confusing or ambiguous. In my view, the better course to follow is to prepare a new original Last Will in the place of the old one, incorporating the new provisions. This way there is less of a chance of confusion and there is no need to locate two documents at the time of probate.