New York Probate Lawyer Blog

October 17, 2012

New York Estates and Guardianships May Involve Landlord-Tenant Proceedings

Many New York Estates and New York Guardianships contain assets in the form of real estate such as single or multi-family homes. Other possible assets can also include a condominium or cooperative apartment. These properties are a valuable, and many times the most valuable, asset owned by a decedent or an incapacitated person.

Problems often arise when the estate Executor or Administrator or Article 81 Guardian need to sell these assets to make a monetary distribution to beneficiaries or to pay expenses. Frequently, there are other persons who are living in these properties and remain there after the appointment of the fiduciary and they refuse to vacate the premises to allow the property to be marketed and sold. Persons who may be living in a house or apartment can range from children of the decedent or the incapacitated person to third party friends.

When a situation arises requiring the removal of a person from property as described above, the most common procedure is to file a Summary Eviction proceeding in the County where the property is located. This is the most common and expeditious method especially when dealing with non-relative occupants. For example, if the decedent had a Queens Probate or Brooklyn Probate and left a house in such County, the eviction proceeding would be filed in the Landlord-Tenant Part of the New York City Civil Court in such County.

Landlord-Tenant proceedings can be complicated and it is a good practice to obtain legal guidance from an attorney with experience in these matters. I have represented many individuals in Landlord-Tenant cases throughout New York. In an eviction case, there is usually an initial Notice sent to the occupant advising him or her to vacate by a certain date or Court proceedings will then be commenced. If the person fails to vacate as demanded in the Notice, a proceeding is filed in the Court to have the person evicted.

While eviction proceedings are “Summary” in nature, meaning that the process to have a Judge hear and determine a case is streamlined, the procedural aspects of these cases usually result in many adjournments and extensions. The ultimate consequence is that the Estate Administration or Settlement can be delayed for many months until the eviction process is completed.

In the Guardianship setting, a reverse scenario may occur. When a person becomes incapacitated they may be unable to pay the rent on the apartment where they live. Due to this non-payment of rent, the landlord may start an eviction proceeding against an incapacitated person who may be unable to defend himself or herself until a Guardian is appointed. In such situations, when a petition for Guardianship is initially filed with the Court, the Court may issue an Order Staying or putting on hold the eviction case until a Guardian is appointed who can either pay rent or otherwise defend the incapacitated person’s interest. Mental Hygiene Law section 81.23 provides that the Guardianship Court has the power to grant such a provisional remedy. There have been many instances when I have represented persons to be appointed as an Article 81 Guardian when I have obtained this type of relief and prevented the incapacitated person from being evicted from his or her home.

The ownership of real estate and tenancy rights relating to Estate and Guardianship proceedings can be very complicated and involve very valuable interests. As a New York Guardianship and New York Estate and Trust Lawyer, I have helped my clients recognize and deal with these issues.

October 10, 2012

New York Estate Planning Can Include Pre-Nuptial Agreements and Testamentary Trusts

by Jules M. Haas

There have been numerous posts in the New York Probate Lawyer Blog discussing many aspects of the importance of good estate planning. First and foremost, preparing and signing a Last Will allows a person to provide specific direction as to the disposition of property upon death. Absent the execution of a valid Will, a person is deemed to have died intestate and all estate property that does not pass by operation of law (i.e. joint assets) is distributed to the decedent’s next of kin in accordance with State laws. Thus, long lost relatives with whom the decedent had little or no lifetime contact may become estate beneficiaries. For example, the Las Vegas Sun recently reported in a story by Cy Ryan on September 16, 2012 about a recluse who died leaving $7 million dollars worth of gold bars and coins stored in boxes in his house. It now appears that since the decedent did not have a Will, a first cousin who had not even talked to the decedent for a year, may inherit the estate.

Not only does preparing a Will allow a person to specifically name beneficiaries, a complete estate plan that includes a pre-nuptial agreement and a trust can fine tune the manner by which the decedent’s property is disposed of. A good example of such planning was seen recently with the death of actor, Dennis Hopper. As reported at TMZ.com on September 17, 2012, Mr. Hopper had entered into a pre-nuptial agreement that prevented his estranged wife from receiving any benefits under his Will. As discussed in my prior Blog posts, ordinarily in New York a spouse cannot be disinherited and New York Estates, Powers and Trusts Law section 5-1.1-A provides that a spouse can elect to receive a share of an estate. However, a valid pre-nuptial agreement can provide that a spouse waives the right to receive the statutory share and instead elect to receive only the amounts provided for in the agreement.

The TMZ article also reports that Mr. Hopper left his 9 year old daughter $2.25 million in a trust and that his wife had no control over the trust. It is very common for parents to leave their minor children assets in a testamentary trust, which is a trust created inside of their Will. The trustees that are also named in the Will can be anyone the testator selects, whether a relative, a friend or even a bank or trust company. The trustee does not need to be the child’s other parent. The surviving parent or legal guardian of the child has no authority to control the named trustee.

New York Estate Planning attorneys work closely with their clients to understand their needs and intentions and to develop an estate plan that can reflect their wishes. Mr. Hopper’s advisors apparently were successful in creating a plan whereby his estranged wife was excluded from obtaining or controlling any part of his estate or the manner in which it would be administered for the benefit of his young daughter.

October 3, 2012

New York Accounting Proceedings Allow Examination of the Fiduciary

by Jules M. Haas

A New York Executor and Administrator has an obligation to collect estate assets, pay bills and expenses and then distribute the net estate to the estate beneficiaries. Estate settlement in Manhattan or Brooklyn or Queens or other New York Counties is fundamentally the same.

As part of the settlement process, the estate fiduciary will prepare an accounting of his or her activities as an Executor or Administrator or Trustee. The form of the accounting is provided in official forms for the Surrogate’s Court. The accounting reports specifically all of the assets and income collected, all of the expenses and claims that were paid and the amount of funds that ultimately remain on hand to be distributed to the beneficiaries. Such distribution is made in accordance with the terms of the probated Will or as provided by the laws of intestacy.

Prior to distribution the accounting is given to the parties entitled to distribution so they can review and approve it. A fiduciary generally will not distribute shares of an estate without an approval of the account by all necessary parties and their signed Release and acknowledgement that they approve of the job done by the fiduciary.

In many cases, the beneficiaries either object to or have questions regarding the transactions of the fiduciary. When this occurs, there are provisions in the Surrogate’s Court Procedure Act (“SCPA”) and other statutes that provide a means by which the beneficiaries can investigate any questions they have about the administration of an estate or a trust. Specifically SCPA 2211 entitled, “voluntary account; proceedings thereupon” allows a party to take oral testimony of a fiduciary to examine all of the fiduciary papers relating to the accounting. Such papers may include bank statements, deeds, tax returns, financial records, bills and receipts. Following the completion of the SCPA 2211 examination a decision can then be made as to whether to file formal objections to the accounting.

Depending upon the size of an estate, an accounting may be very lengthy and report hundreds of different financial transactions. The review and advice of experienced accountants and New York Estate Lawyers should be obtained to determine whether there exists a valid basis to object to the actions of an executor or administrator. In some cases discovery of information from third party witnesses may also be needed such as banks and other individuals who have knowledge regarding the transactions.

Generally, the New York Surrogate’s Courts encourage interested parties to resolve their disputes, including accounting contests, without extensive Court proceedings or a trial. An estate accounting is always helpful to the recipients of estate bequests or shares. It provides a clear and concise review of all of the estate receipts and expenditures so that a party can understand exactly why he or she is receiving a certain sum of money.

Since accountings are an essential part of the estate process, I always advise clients who are Executors, Administrators and Trustees to maintain clear and complete records of all of their transactions and keep copies of all papers that may be needed to provide support and back-up for the transactions.

It should also be noted that Article 81 Guardians are also required to provide annual accountings. Mental Hygiene Law Section 81.31. Thus, all fiduciaries should maintain complete records so that they can respond to any questions regarding any item that appears in their accounting.

September 27, 2012

New York Distributees Must Be Determined For Estate Settlement

by Jules M. Haas

Proceedings in the New York Surrogate’s Court, like most Court matters, require that all of the interested parties be given proper notice of the Court action.

In addition to the fundamental fairness that results from proper notice, the Court’s ultimate rulings and Orders generally can have no effect over persons who were not made parties to the proceeding.

The Surrogate’s Court can hear many different types of cases. The most common of these matters is the Probate of a Will or the Intestate Administration of a decedent’s estate. In Probate and Administration proceedings it is mandated that the Court be advised as to identity and location of the decedent’s distributees or next of kin. This information is provided to the Court in the Probate Petition or Petition for Letters of Administration. In most instances distributees are easy to determine since the decedent is survived by a spouse and/or children. However, there are many situations where the closest living relative may be a distant cousin and members of this class of relatives may have had no contact with the decedent for years or decades.

Additionally, locating cousins requires finding relatives that are descendents of the decedent’s grandparents on both the maternal and paternal sides of the family. It is common that when distributees are distant cousins the estate will have to be administered by a public official called a Public Administrator. When the Public Administrator completes the estate administration or estate settlement, an Accounting Proceeding is filed with the Court. It is at this point that the persons claiming to be distributees, such as the cousins, must prove their status in a Kinship Hearing.

When a client confers with me about an estate plan or preparing a Last Will, one of the important items of information I ask for is a family tree or kinship data. Based upon the information provided, a person’s estate plan can be structured by the use of a Living Trust or other plan to avoid post-death complications where kinship data is missing or hard to obtain. It is always a benefit to confer with a qualified New York Estate and Trust lawyer to discuss issues regarding beneficiary designations and planning strategies.

The final estate administration and intentions of a person can be disrupted where Court proceedings are complicated or delayed because all of the parties that need to be notified cannot be determined or located.

Determining the identity of a person’s next of kin can sometimes even involve the use of genetic or DNA testing. A recent article in Arts Beat on September 25, 2012 by Dave Itzkoff reported that a judge had recently ordered DNA testing for a man who claimed to be the brother of Sherman Hemsley, who had starred in the “Jefferson’s” television sitcom.

DNA testing is also authorized under Estates, Powers and Trusts Law Section 4-1.2 where a person claims to be the heir of a father who was not married to his mother. Needless to say, the determination of a person’s next of kin and the protection of the rights of estate beneficiaries can be very complex and consultation with experienced estate attorneys and even a genealogist is highly recommended.

September 20, 2012

Estate Tax Changes Can Effect New York Estate Planning

by Jules M. Haas

As 2012 is coming to an end, so are the many provisions of the tax laws that are set to expire on December 31, 2012. Among the laws that will change in 2013 is the Federal Estate Tax. At present, a New York Estate Attorney is aware that the federal estate tax exclusion is $5,000,000. When the estate tax laws change in a few months, only $1,000,000 will be protected from taxation.

The impending dramatic change in federal estate tax protection has created uncertainty and confusion for individuals and estate planners. This is especially so since neither Congress or the President have shown any indication that a definitive new law is being seriously considered.

For example, a Manhattan Estate Lawyer or Brooklyn Trust and Estates Attorney can prepare a Last Will for a client with precise provisions regarding the disposition of assets such as real estate, bank accounts, brokerage accounts and retirement funds. The Will can be probated in the Surrogate’s Court according to set procedures and requirements. However, the provisions in the Last Will dealing with estate tax planning must be flexible enough to accommodate the uncertainty in the tax laws that are going to change but in an unknown manner.

The variations in recent years in estate taxes due to the changing tax code and the failure of the government to provide long term certainty has resulted in unwanted and unexpected estate settlement and estate administration problems. For example a recent article in Business Financial News by Amy Feldman on July 31, 2012 recounted how a tax savings clause in a Will resulted in litigation to prevent an apparent aberration in the decedent’s estate plan. Essentially, a formula tax savings clause that was intended when drafted in 2008 to provide a sum of money to the decedent’s children of only about $2,000,000 would have given the children all of their mother’s $100 million dollar estate in 2010 when the estate tax had been eliminated. The problem was that the decedent’s husband would not have received any portion of the estate. When the Will was originally written it was not expected that there would be no estate tax in 2010 resulting in an unlimited bequest to the children.

The New York State estate tax law currently provides for a $1,000,000 exclusion. Because of the uncertainty surrounding the Federal Estate tax exclusion during the past years and in the coming months, questions continue to be raised regarding the need for the tax. An article appearing in The Daily Caller on September 4, 2012 discussed a report by the congressional Joint Economic Committee that the cost to enforce the estate tax is greater than the benefits it produces.

As a New York Trusts and Estates Lawyer, I am involved with potential estate tax issues with regard to Will preparation, estate planning and probate and estate administration. The initial concern is whether or not a person’s estate is subject to possible taxation based upon its value. If so, other issues such as the use of deductions, credits and gifts must be considered to minimize the impact of the tax. These considerations can be quite complex and require the cooperative efforts of the client and his or her tax advisors.

September 12, 2012

New York Guardianship Proceedings Concern Guardianship for Personal Needs and Property Management

by Jules M. Haas

New York Guardianship Lawyers are often asked by clients as to the type of Guardianship that is needed concerning an alleged incapacitated person (“AIP”). The New York Probate Lawyer Blog has discussed many instances where the Court has appointed a guardian for both the person and property of the AIP. In fact, in a Manhattan Guardianship, Queens Guardianship, Brooklyn Guardianship or any other county, the Court typically appoints the same person as both property management and personal needs guardian. New York Mental Hygiene Law (MHL) Section 81.22 concerns personal needs powers and Section 81.21 concerns property management.

While most Guardianship proceedings are initiated by a petition filed by a family member such as a spouse or child, many times the guardianship case is started by a hospital or nursing home. Sometimes, the local social services department starts the case after it receives information from Adult Protective Services that a person may be at risk.

A nursing home or hospital may file a Guardianship petition with the Court because a family member fails or refuses to do so and the institution needs to be paid. Payment may require a Guardian to either access the AIP’s assets or make an application for Medicaid.

The situation described above presented some interesting issues in a Long Island Guardianship case recently. In Matter of Restaino, decided by Justice Arthur M. Diamond (Supreme Court, Nassau County), on August 29, 2012 and reported in the New York Law Journal on September 7, 2012, an extended care facility filed a Nassau County Guardianship case seeking to be appointed only as property management special guardian for property so it could apply for Medicaid for the AIP to pay for the AIP’s care. It was the facilities’ view that it did not need to ask the Court for the appointment of a personal needs Guardian since the Family Healthcare Decisions Act would provide a mechanism for the AIP’s son or the facility to make health care decisions for the AIP.

The FHCDA came into existence in 2010 and provides a priority list of persons who would have authority to make health care decisions for incapacitated patients.

After reviewing the FHCDA the Court determined that the appointment of a personal needs Guardian was necessary since the act did not provide the extensive authority for the decision maker and protection for the AIP that was given to a personal needs Guardian. The Court ultimately appointed the extended care facility as special Guardian of the property and the AIP’s son as Guardian of the person.

As a Guardianship attorney, I work closely with my clients who are family members or friends of an AIP to determine the best course for having the Court appoint a Guardian. While sometimes there is a contested Guardianship, most often, families and friends pursue Guardianship so that the AIP’s personal and property affairs can be kept in order and decisions can be made in the best interest of the person who is incapacitated.

September 5, 2012

New York Estates are Controlled by Appropriate State Statutes

by Jules M. Haas

The Administration of the estate of a decedent requires the immediate determination as to the State law that controls estate settlement. Usually the domicile of a decedent determines which State laws (i.e., New York or New Jersey) will be applied to many of the issues concerning the estate. The determination of domicile can be a complicated matter that involves a review of which State the decedent considered to be his or her home and the contacts the decedent had with the State such as filing of tax returns or the issuance of a driver’s license.

Determining a decedent’s domicile and the proper State law to be applied can be important since the rules regarding Will execution, spousal rights, kinship, estate litigation and other substantive matters can vary from state to state. In this regard it is generally the rule that a Last Will can only be filed for probate in the State and locality where the decedent was domiciled at the time of death.

It should be noted that domicile may not only determine the proper State law to be applied in estate settlement but that it may be that a person’s domicile might be in a country other than the United States. In such cases, the laws of the country of domicile may need to be utilized to settle an estate.

New York Estate Lawyers are aware of the many issues that may arise where there is uncertainty or a potential conflict concerning the proper law to be used regarding an estate or beneficiary rights.

The New York Probate Lawyer Blog has had recent posts regarding disputes involving celebrity estates such as Adam Yauch of the Beastie Boys and the co-creator of the Superman character.

Celebrity estate problems can also arise regarding domicile and residence. With regard to domicile and the selection of appropriate State law, a United States Court of Appeals in California on August 30, 2012 ruled that heirs to the estate of Marilyn Monroe could not inherit rights to her publicity because she was domiciled in New York at the time of her death and such posthumous rights are not recognized by that State. As noted in an article in the Daily Report by Amanda Bronstad on September 5, 2012, the heirs unsuccessfully claimed that Marilyn Monroe was a resident of California.

The estate planning and probate and administration of a New York Estate requires that domicile and residency be reviewed very carefully. Individuals may have homes in many States or even countries. When a person dies, the Surrogate’s Court for Queens Probate, Manhattan Probate, Long Island Probate or Brooklyn Probate, as well as all other State counties, is going to review the decedent’s domicile and residency very carefully even before accepting any papers for filing. As can be seen from the Marilyn Monroe case, very significant rights can be affected by a determination of domicile.

Additionally, domicile can determine whether an estate is subject to State estate taxes. States such as New York impose an estate tax on local residents while other States do not have an estate tax. The cost to an estate for taxes alone is an important reason to investigate and determine a person’s domicile as part of the estate planning process.

August 29, 2012

Estate Administration In New York Can Be Complicated By Disputes Over Asset Ownership

by Jules M. Haas

The fundamental goal of an Executor or Guardian administering the estate of a decedent or Guardianship funds is to collect and protect assets and distribute them on behalf of the appropriate beneficiary. The determination of the identity and value of assets is often very complicated. To begin with, assets may be unknown to the Executor, Administrator or Guardian and they must search through financial records such as tax returns and bank statements to discover necessary information. It is not usual for a fiduciary to discover an asset by finding a bank or brokerage statement that is delivered in the mail.

Not only is discovering assets a challenge during estate settlement, the ownership of the asset may be in dispute. For example, a decedent or an incapacitated person may be the owner of a small business with business partners. If the business records were not properly maintained a dispute may arise as to the percentage or share of the business that was owned by the decedent or incapacitated person. Disputes concerning the ownership of assets can have significant ramifications. First and foremost such ownership will directly affect the amounts that can be distributed to the beneficiary of the estate or Guardianship.

Also, whether an estate has a certain value will impact upon whether estate tax returns must be filed and the amount of estate taxes that must be paid. At present, a New York Estate Tax Return must filed if the value of an estate exceeds $1,000,000. The Federal Estate Tax filing requirement is $5,000,000. Additional estate tax issues such as a marital deduction may be impacted by the nature and extent of assets.

Queens Estate Lawyers, as well as estate lawyers throughout New York, work closely with their clients who are fiduciaries to ascertain and collect assets of an estate. The same holds true for New York Guardianship lawyers.

Estate litigation that generally occurs in the Surrogate’s Court may involve many issues regarding property and assets. A recent post in the New York Probate Lawyer Blog on August 24, 2012 discussed a case where the Last Will of Adam Yauch, a founding member of the Beastie Boys, faced probate and interpretation issues due to a handwritten addition to the Will.

Another recent case involving estate assets involves a dispute regarding rights claimed by heirs of one of the co-creators of the Superman character. As reported by Ted Johnson in Variety.com on August 14, 2012, “Ruling Near in Superman Rights Battle”, the dispute between a nephew of the co-creator, who is also the estate executor and Warner Bros. is to be decided by a U.S. District Court Judge. While the controversy concerns the interpretation of a prior settlement agreement and copyright law, the outcome will have a tremendous impact due to the apparent value of the Superman promotional rights.

The best course is for individuals to ascertain all of the assets that may be part of their estate and to clarify and resolve all issues regarding ownership rights as part of their Estate Planning. As can be seen from the recent situations discussed above, this is not always accomplished so as to avoid estate contests and controversy.

August 22, 2012

Late Beastie Boy’s Will Offers Estate Planning Lessons for New York Public Figures

by Jules M. Haas

On May 4, 2012, Adam Yauch lost his battle with cancer at the young age of forty-seven. Sadly, this type of thing is not uncommon in New York, where cancer claims many lives each year. What makes this case more notable than most in an estate planning context is that Adam Yauch lived an alter ego for most of his life, where he was better known as “MCA,” a founding member of the Beastie Boys. The hip-hop trio sold millions of records over the years and amassed a small fortune from record royalties, tour proceeds, and other sources.

Adam Yauch had the foresight to consult an estate planning attorney about drafting a Will. Yauch named his wife, Dechen, as Executor, and the Will was filed in the Manhattan Surrogate’s Court earlier this month. The Will contained many standard provisions about how to distribute Yauch’s assets.

As reported by Deborah L. Jacobs in Forbes.com on August 13, 2012, Part of Beastie Boy Adam Yauch’s Will, Banning Use of Music in Ads, May Not Be Valid, Yauch’s Will differs from most ordinary Wills since it directed that his image or name could not be used for advertisements. Yauch added language by hand to the Will after it was signed to provide: “in no event may my image or name or any music or artistic property created by me be used for advertising purposes.” Celebrities and other public figures may want to prevent others from capitalizing on their fame after they die. Advertising professionals recognize that a public figure’s death often creates a resurgence in public interest surrounding the individual. A recent example is Michael Jackson’s estate which has made millions of dollars by promoting his image and music after his death. However, there are instances where fame can be exploited to the extreme. All else being equal, Yauch’s inclusion of the above provision appears intended to prevent any such behavior.

The problem with the particular provision in Yauch’s Will is that it is handwritten. New York frowns upon handwritten Will provisions because of the view that a handwritten Will provision is more likely to be forged, altered, or otherwise fraudulent. Yauch’s Will is made even more problematic by the fact that the majority of the document is properly typewritten and executed, while the above posthumous advertising provision was added in pen after the execution of the rest of the document. The validity of the handwritten provision may result in Estate Litigation that may prolong the probate of the Will. The estate law in New York provides that handwritten additions to a Will after it has been signed are invalid. Estates, Powers and Trusts Law Section 3-2.1 entitled “Execution and attestation of wills; formal requirements: “provides in paragraph (a)(1)(B) that “No effect shall be given to any matter, other than the attestation clause, which follows the signature of the testator, or to any matter preceeding such signature which was added subsequently to the execution of the will.”

Additionally, as pointed out in the Forbes article, the additional handwritten language created confusion in interpreting the extent of the restriction on advertising. In many cases where Will provisions are Contested, a proceeding for construction or interpretation of Will language is required. New York Estate and Trust attorneys are familiar with these proceedings but they may require extensive Court process.

The lesson to take away from the Yauch case is that New York and its boroughs are home to countless celebrities and other public figures, perhaps second only to Hollywood. As such, estate planning attorneys in New York’s boroughs are more accustomed than most to drafting special Will provisions designed to protect a person’s likeness, ideas, or other artistic property. The same attorneys know that the needs of their public figure clientele are constantly changing and intensely private, requiring the highest degree of confidentiality and legal skill.

Had Adam Yauch thought to investigate the integrity of his Will before his death, his Manhattan estate attorney may have discovered the dangers of including handwritten provisions and explained to Yauch that these provisions might end up having effects that he did not intend. If you are a public figure or celebrity who intends to have a Will executed in New York, or even if you are as far from the spotlight as possible, it is always a good idea to make sure your estate planning papers clearly reflect your intentions.

August 15, 2012

New York Wills and Trusts Require Careful Selection of Executors and Trustees

by Jules M. Haas

Executors, Trustees and Administrators in New York are commonly referred to as fiduciaries. Fiduciaries are the representatives of a trust or estate that are authorized by their appointment to act on behalf of the trust or estate.

The New York Probate Lawyer Blog has had many posts discussing actions of fiduciaries such as collecting assets, paying bills and taxes and making distributions of property. Whenever a Queens Executor or Manhattan Trustee or a fiduciary in any New York county performs his or her duties, they are required to follow and adhere to certain statutes and guidelines. New York Estates, Powers and Trusts Law (EPTL) Section 11-1.1 is entitled “Fiduciaries’ powers”. This statute sets forth many of the powers that are given to fiduciaries which include powers to: invest estate or trust property, manage or sell real estate, repair property and contest or settle claims. Generally, the powers provided by statute are quite extensive and a fiduciary is entrusted with using his or her judgment to exercise these powers in good faith. The statute also provides in paragraph (b) that the Court or the Will or Trust document can limit or provide contrary provisions to those stated in the statute.

As a New York Estate Lawyer, I have found that it is important for fiduciaries to fully understand and appreciate the responsibility that goes along with their appointment. Similarly, Estate Planning must include a thorough consideration of the qualifications of fiduciaries who are to be named by a Last Will, Living Trust or other document.

Acting as a fiduciary is not always easy and can involve the necessity of having to make difficult business decisions regarding an estate or trust asset. For example, issues may arise as to whether or not to sell shares of stock or real estate and at what price to sell. Investing assets, particularly in today’s volatile economic climate, is filled with uncertainty. The recent case of Matter of Boyer, decided by Surrogate James Pagones of the Dutchess County Surrogate’s Court on May 31, 2012 and reported in the New York Law Journal on June 26, 2012, shows some of the problems faced by fiduciaries.

In Boyer there were 3 trustees of a trust created under a decedent’s Last Will. Two of the three trustees desired to sell the decedent’s real estate which consisted of a farm. The 2 trustees also desired to evict the decedent’s friend from the property. Rather than move forward with these plans on their own, the trustees petitioned the Surrogate’s Court pursuant to Surrogate’s Court Procedure Act (“SCPA”) Section 2107, for direction from the Court.

SCPA 2107 is entitled “Court may direct as to value, manner and time of sale of property and give advice and direction in extraordinary circumstances.” Court’s are typically reluctant to substitute the Court’s judgment for that of a duly appointed fiduciary. Therefore, the Court in Boyer declined to advise the trustees as to whether and at what price the property should be sold and, instead, found that it was the trustees’ duty to exercise their own business judgment in deciding these issues.

Selecting the proper fiduciaries that will protect trust and estate property and beneficiaries’ interests is an important goal in estate planning. Trust and estate attorneys in New York help their clients in the process of selecting fiduciaries as well as providing guidance for fiduciaries who face tough administrative and estate settlement decisions.