New York Probate Lawyer Blog

September 10, 2010

New York Choice of Law Issues Can Determine Outcome of Case

Following a person’s death, it may be necessary to file papers with a Court to commence a Probate proceeding, if the person had a Last Will, or an Administration proceeding if the person died intestate. It may also be necessary to determine the appropriate set of laws that are to be applied to determine issues regarding estate administration. For example New York Surrogate’s Court Procedure Act section 3-5.1 provides in paragraph (7)(b)(1) that:

“The formal validity, intrinsic validity, effect,
interpretation,revocation or alteration of a
testamentary disposition of real property, and
the manner in which such property descends when
not disposed of by will, are determined by the law
of the jurisdiction in which the land is situated.”

Paragraph (7)(b)(2) of the statute states that:

“The intrinsic validity, effect, revocation or alteration
of a testamentary disposition of personal property, and
the manner in which such property devolves when not
disposed of by will, are determined by the law of the jurisdiction
in which the decedent was domiciled at death.”

Therefore, the determination of a decedent’s domicile and the location of real property owned by the decedent may determine the proper set of laws to be used in a particular situation.

The selection of the proper laws to apply may not be a simple affair and may impact upon many issues in estate administration, including various rights of potential heirs and beneficiaries.

Choice of law issues can affect an estate or heirship rights in many different ways. For example, in Bakalar v. Vavra, the U.S. Court of Appeals, Second Circuit, 08-5119 cv, was asked by heirs of a deceased art collector who died in a Nazi Concentration Camp to enforce their claim to a certain drawing that they asserted had been stolen from the decedent. As reported in the New York Law Journal on September 7, 2010, the lower Court had applied Swiss law in deciding that the artwork belonged to an American Art collector. The Appeals Court reversed the lower Court’s decision and determined that New York law should have been used to determine ownership and that further proceedings or a new trial was warranted. It appeared that New York law may favor the claim of the heirs.

As shown by the Bakalar case, issues concerning choice of law can have a significant impact on estate administration and the rights of parties involved in these proceedings. An experienced New York Probate attorney can assist with determining the proper laws to apply and protect the rights of parties interested in the estate.

September 7, 2010

Disqualification of New York Administrator Requires Specific Evidence of Wrongdoing

by Jules M. Haas

New York Administrators and Executors, also known as fiduciaries, have many responsibilities with regard to administering an estate and their relationship with estate beneficiaries. Very often, due to a fiduciary’s acts or failure to act or a conflict of interest, beneficiaries ask the Court to disqualify a fiduciary or to revoke their Letters of Administration or Letters Testamentary. However, such a request to the Court requires specific allegations for the Court to actually disqualify a fiduciary.

Such was the case in a recent decision by Bronx County Surrogate Holzman in Estate of Maria Minelli, New York Law Journal August 31, 2010. In Minelli, one of the decedent’s sons asked the Court to revoke the Letters of Administration that had been issued to his sister. The son claimed that his sister had fraudulently transferred real estate that had been the subject of an Article 81 Guardianship proceeding regarding the decedent. The son also claimed that his sister was involved with a fraudulent application to the New York City Department of Social Services.

After reviewing the evidence, the Court denied the son’s application to revoke his sister’s Letters of Administration and found that there was “no evidence to support the bald, conclusory allegations …” Since removal of a fiduciary is a significant act, the Court will always require very specific and clear evidence upon which to base its decision. While the removal of an Administrator or Executor may occur, the Court needs to have a strong foundation to support such relief.

The Minelli case also points to the interaction between Article 81 Guardianship proceedings and the administration of a decedent’s estate. It is common for many issues relating to property transfers and asset ownership to be investigated and determined in a Guardianship proceeding which may occur many years prior to the death of the incapacitated person. Therefore, it is important to fully examine and resolve these matters in the Guardianship case. If property is wrongfully transferred or disposed of at the time of the Guardianship proceeding, it may be too late to resolve these issues years later when the incapacitated person dies.

September 3, 2010

New York Last Will Endures for Half Century, Leaves Second Wife out of Estate

by Jules M. Haas

A New York Appeal’s Court ruling offers a stark reminder of the power of a Will or other estate planning document and the need to seek the advice of a New York City probate lawyer when settling estate issues.

A New York physician left an estate of $28 million dollars upon his death in June 2006, which relatives thought would be divided in accordance with New York law governing intestate estates. Intestate estates are estates which have no Last Will to govern their disbursement and are, therefore, divided in accordance with New York law. As we reported in our New York Probate Lawyer Blog, intestate law would divide the estate among a decedent’s closest living relatives, beginning with a wife who would receive half the estate.

In this case, the physician’s first wife died in 1981. His daughters sought to probate a purported Will executed in 1958. The document was witnessed by the physician’s attorney and two employees of his medical office. The Will left the vast majority of the estate to the decedent’s children and also to his first wife who had predeceased him.

The Court could find no material issue of fact that would exclude the Will and, therefore, admitted it to probate. The second wife appealed. The appeals Court upheld the ruling of the lower Court and the Will was admitted to probate despite being written more than a quarter-century before the physician’s second marriage.

This case is an example of the complications that can arise form the failure to update a Last Will and properly plan for the division of an estate. Here, the decedent had an estate valued at $28 million and had outlived his first wife by 25 years. Yet, he had apparently done little or no estate planning in the past half century that would have provided for the death of his first wife and his remarriage. An estate plan can provide peace of mind, tax savings and the knowledge that your estate will be distributed in accordance with your wishes and that your loved ones will be cared for in your absence. A Last Will should be reviewed and updated to reflect the current status of a person’s relationships and plan.

September 1, 2010

New York Estate Litigation Should Be Carefully Considered For Cost and Likelihood of Success

by Jules M. Haas

The process of settling the estate of a decedent can be either uncomplicated or filled with controversy. There are many aspects of estate administration that can lead to disputes and litigation.

For example, when a person dies, among the first questions to be asked is did the decedent leave a Last Will and, if so, where is the original of the Will located. Sometimes, the person who is in possession of the original Last Will refuses or just does not file the Will with the Surrogate’s Court. In such circumstances the New York Surrogate’s Court Procedure Act (SCPA) Section 1401 provides a procedure whereby the Court can issue an Order directing that the Last Will be produced and filed with the Court.

Will contests provide another example of estate litigation. Interested parties, such as disinherited children or other next of kin, may dispute the validity of a Will and thereby engage in protracted litigation with claims of undue influence or the decedent’s lack of testamentary capacity.

In all circumstances involving litigation, great consideration must be given to the cost and probable outcome of the case. Simply stated, thought should be given to the likelihood of success and whether the cost of prevailing is worth the effort. These are not easy questions to answer, particularly at the outset of an estate administration. However, a good faith review is always the best course.

A blind eye to such an inquiry can lead to disastrous results. Recently, as reported in The New York Law Journal on August 26, 2010, a New Jersey Superior Court Judge sanctioned two law firms and directed the firms to pay $1.96 million to defendants because the law firms engaged in “frivolous” litigation. The Judge’s ruling was in a case where the billionaire Ronald Perelman, as executor of his ex-wife Claudia’s estate, claimed that Claudia’s father had made an oral promise to leave a share of his estate to Claudia. The Judge found in Estate of Claudia Cohen v. Robert Cohen that the attorneys should have “recognized” that the claims being asserted were not supported by the evidence.

As the above decision demonstrates, good faith and responsibility to the Court play an important role in estate matters and litigation. A good New York Probate Attorney can help an executor make informed decisions regarding estate administration and litigation.

August 26, 2010

New York Planning For Retirement – A Practical Approach

by Jules M. Haas

Nowadays retirement seems like more of a dream than a reality given the tough economic environment. For many, it is difficult enough just to meet current expenses and obligations. However, whether a voluntary choice or due to events such as illness or job loss, retirement is a reality that needs to be planned for.

As reported by Jean Folger in Investopedia at SFGate, “10 Things You Must Know Before You Retire”, “27% of Americans have less than $1,000 in savings for retirement, and that only 46% of workers have tried to calculate how much money they will need to have saved for retirement.”

Estate planning is among the 10 items listed in the Article that should be part of a retirement plan. At its most basic level, without any estate plan or a Last Will, a person’s assets may have to be distributed according to the State laws of intestacy. This means that State statutes will determine the estate beneficiaries. Worse yet, if these heirs at law are unknown, complicated kinship proceedings may be needed and the assets may ultimately be taken over by the State treasury.

A good estate plan typically includes a Last Will, Living Will, Health Care Proxy and Power of Attorney. A Living Trust or other types of trusts may be needed and estate and gift tax considerations should be reviewed.

A Last Will provides the road map for the disposition of assets. Names of beneficiaries and specific amounts of bequests can be set forth. A person’s choice of Executors and Trustees can also be made clear in the Will. After the Will is admitted to probate, the process of estate administration can be completed and the intentions and desires of the testator (the person who made the Will) can be fulfilled and not left to chance by the application of the intestacy laws.

August 24, 2010

Clark Case May Be Subjected to Guardianship Oversight in New York

by Jules M. Haas

Update: MSNBC reports that New York City officials have begun welfare checks on the 104-year-old heiress and the Manhattan district attorney has launched a criminal investigation into the handling of her finances.

Where in the world is 104-year-old Huguette Clark? One only hopes that she has a world-class New York City estate lawyer who has her best interests at heart. Apparently, Ms. Clark has been confined to a hospital for many years.

She certainly has her choice of living accommodations, what with a $100 million Pacific Coast estate, a $24 million home in Connecticut that she apparently bought a half-century ago but never visited, and a $100 million apartment overlooking Central Park — rumored to be the largest residence on Fifth Avenue.

All are immaculately maintained and all have been unoccupied for decades. Clark has spent the last two decades in a hospital room — according to MSNBC.

With few family members — her father was in his 60s when she was born and was eligible for service in the Civil War — the lone heiress to a copper fortune is being looked after by an accountant with a criminal background and a 78-year-old attorney, MSNBC reported.

Clark has always been reclusive and fabulously wealthy — her father was a Senator from Montana at the turn of the century. She grew up in a 121-room mansion at 962 Fifth Avenue at 77th St.

It is unknown whether she has a living trust or other comprehensive estate planning. Elderly wealthy people are at risk of being victimized by fraud – particularly when no close relatives exist. Why she has spent more than 20 years in a hospital room has not come to light. Nor is it clear whether she is the subject of an Article 81 Guardianship Proceeding.

Such guardianship would permit a responsible adult to look after her finances. However, such a position of authority could be abused, despite court oversight. Since the story has come to light, more eyes are watching. The Manhattan District Attorney has started an investigation. Yet it has not been determined if Clark is under guardianship or if her vast estate is even subject to proper oversight.

Experienced New York City guardianship and probate attorneys have seen the best and worst of these types of situations. It is unusual to say the least to have as a client a 104-year-old eccentric woman who is fabulously wealthy who has spent two decades secluded in the hospital. We hope her caretakers come forward with a full accounting and that she is not victimized by fraud or abuse.

August 20, 2010

The New York Supplemental Needs Trust Is Useful To Protect Assets And Provide Added Benefits

by Jules M. Haas

There are many situations where a person who is disabled has assets available for his or her present use or may be in the position to receive assets at a later date such as a beneficiary under a Last Will or Trust.

While owning assets is usually beneficial, persons suffering from disabilities are often recipients of, or are qualified to receive, government benefits such as Medicaid or Supplemental Security Income. As a result, a conflict arises because the ownership of assets typically disqualifies a person from receiving the governmental benefits that would otherwise pay for the services that the private funds would be expended on.

In a perfect world a planner would want the disabled person to receive the maximum benefit from governmental resources and preserve or reserve the private and personal assets to spend on extras items and services that the government does not provide.

A Supplemental Needs Trust (SNT) can provide a mechanism whereby someone who is disabled can be the recipient of both government benefits and private assets. Truly the best of both worlds.

New York Estates, Powers and Trusts Law Section 7-1.12 provides the statutory requirements for the creation of these trust fund agreements. Paragraph (a)(5) of the statute defines a Supplemental Needs Trust as “a discretionary trust established for the benefit of a person with a severe and chronic or persistent disability (the “beneficiary”) which conforms to” the statute’s guidelines.

The rules and intricacies for the establishment and use of a Supplemental Needs Trust can be complex. For example, the trust can be set up in the Last Will of a parent or other individual who wants to benefit the disabled person without interfering with the payment of governmental benefits. Another example of the use of a SNT is in a situation when the person who is disabled is the recipient of funds from a personal injury action or inheritance. A Court, in the context of the settlement of the action or within an Article 81 Guardianship Proceeding, may allow the establishment of the SNT so that the assets can be available during the person’s lifetime to provide added benefits and improve his or her quality of life and the activities of daily living. In these Court created trust situations, the assets remaining in the trust following the death of the disabled person may be subject to a lien to reimburse the government for benefits it had previously paid.

Depending upon your situation, a Supplemental Needs Trust can be very useful in any plan for the care and benefit of a person with disabilities. It is important to carefully examine each situation so as to avoid trust disputes at a later date such as government claims that the assets are not protected.

August 18, 2010

The New York Court Evaluator Plays An Important Role In Article 81 Guardianship Proceedings

by Jules M. Haas

A New York Article 81 Guardianship Proceeding is commenced when a petition is filed with the Court. The general requirements of a petition were previously reviewed in a post dated August 16, 2010. Upon receipt of the petition the Court will then sign an Order to Show Cause in which Order the Court will set the date for the Court hearing and also appoint a Court Evaluator.

The job of the Court Evaluator is to make an independent investigation to assist the Court in determining whether the alleged incapacitated person is, indeed, incapacitated, and whom to select as the appropriate person to be appointed as Guardian. This investigation encompasses all other aspects surrounding the AIP such assets, the availability of advance directives such as powers of attorney and health care proxies and the future plan for the financial and personal welfare of the AIP.

Section 81.09 of the New York Mental Hygiene Law provides extensive guidelines for the Court Evaluator. For example, the statute identifies who can be appointed as a Court Evaluator which list includes an attorney-at-law, physician, social worker and the Mental Hygiene Legal Service.

The Court Evaluator will typically meet with all of the persons and witnesses involved with the proceeding, including the AIP, and review all of the papers and records that relate to the issues involved. The statute provides that the Court Evaluator may even apply to the Court for permission to review the AIP’s medical and psychological records. The Court Evaluator also has authority to take emergency action to protect the AIP’s property in the event the property may be misappropriated, wasted or lost before the Court hearing.

Following the investigation, the Court Evaluator will prepare a Report for the Court along with recommendations regarding issues such as the appointment of a Guardian, the appropriate person to act as Guardian and the powers of the Guardian. The Court Evaluator attends all Court proceedings and typically testifies as to the Report and recommendations. The Court relies a great deal upon the information presented by the Court Evaluator in making the final decision in a Guardianship proceeding.

August 16, 2010

Theft of Babe Ruth’s Will Highlights Public Court Process for Probated Estates in New York

by Jules M. Haas

It’s a fascinating story if you are a baseball fan or if you spend your career assisting clients with Wills and Estate Planning in New York. It’s also a cautionary tale for those who are concerned that their private affairs will become public through the probate court process after their death.

The Boston Herald reports that police are searching for a stolen Will that was signed by an old-time Boston Hall of Fame ball player; the investigation is part of a wider probe into black market memorabilia trafficking.

Police are trying to broker a deal with a Virginia baseball collector for the return of a Will signed by George Wright, a Hall of Famer from the 1870s who won six titles with the Red Stockings during baseball’s infancy. The document was among a batch of historic papers swiped from the Suffolk Probate Court in the late 1990s.

“I’d rather get it back in Probate Court where it belongs,” said Boston Detective Steven Blair. “If (the collector) doesn’t agree to give it back, we’ll pursue it criminally.”

While most of us will not have our Wills sought after as collector’s items, subjecting your estate to the probate court process in New York does mean your private affairs will be open to the public. This includes relatives interested in what others are receiving, nosy neighbors, and just about anyone else who takes an interest. Creating a living trust is one way to bypass the probate court process and there are a number of other options you can discuss with a New York City estate lawyer.

In this case, Wright’s signature had been cut out of the document and was up for sale for $6,500. Blair previously worked on a case involving the theft of dozen’s of ball players’ Wills and said investigators are still trying to recover documents from that heist.

The quest to recover Wright’s will is part of a larger probe being conducted by the Federal Bureau of Investigation into the theft of rare papers and photographs from libraries and courts in New York and Boston, including the theft of Babe Ruth’s 1948 Will. That Will recently turned up on an auction site for $95,000.

August 13, 2010

The Petition In A New York Article 81Guardianship Proceeding Sets The Tone

by Jules M. Haas

Every New York Article 81 Guardianship Proceeding involves its own unique set of facts and circumstances.

These variables encompass things such as the nature and extent of the alleged incapacity, the relationship between the Alleged Incapacitated Person (“AIP”) and his or her relatives, companions and friends; the assets and income available to the AIP; the existence, availability and use or abuse of Advance Directives such as a Power of Attorney; and emergency situations that may have an immediate impact on the AIP such as a medical crisis or legal proceeding in the form of a foreclosure or landlord-tenant summary eviction proceeding.

When a Guardianship proceeding is started, the first document that is prepared and presented to the Court is the Petition. New York Mental Hygiene Law Section 81.08 provides details as to the information that is required to be provided in the Petition. These items include basic data such as the name, age, address and telephone number of the AIP, as well as similar information regarding the Petitioner, any persons with whom the AIP resides, and the AIP’s next of kin.

Most importantly, the Petition also sets forth more substantive information dealing with a description of the AIP’s functional level, ability to manage activities of daily living and the powers that the Guardian is seeking.

Essentially, the Petition provides the means by which the Petitioner can tell the story about the AIP and why the AIP needs a Guardian and why the Court should appoint the Petitioner to be the Guardian. All of the relevant information regarding the Guardianship case as initially presented by the Petitioner should be set forth clearly and succintly. The Petition is the first document which the Court and all the parties involved in the proceeding will receive and read. Thus, the Petition sets the tone for the proceeding and the groundwork for the appointment of a Guardian.

Additionally, in the event that the AIP’s assets are being improperly handled or misappropriated or the AIP is in danger of being evicted from his or her home, the Petition can request temporary and immediate relief in the form of a Temporary Guardian, the freezing of assets or a Court Ordered injunction.