New York Probate Lawyer Blog

During the course of the administration of a New York Estate, an executor or administrator may be confronted with various issues.  For example, there may be numerous debts that need to be satisfied, such as credit card bills, medical bills, car loans, mortgages and utility bills.  Each of these items needs to be examined and the estate fiduciary must determine whether and to what extent payment should be made.  Sometimes these bills can be reduced through negotiation.

During life, a decedent may have been a defendant in a pending lawsuit.  In these situations, the administrator or executor needs to be substituted into the Court action so that the estate’s interest can be protected.  Another important area of concern is whether the decedent’s estate is subject to a claim or lien from Medicaid.  If the local Medicaid provider paid for services on behalf of the decedent, there may be claims for reimbursement from the estate, such as for nursing home care.

Dealing with a creditor claim can be a complex and lengthy process and can delay the settlement of an estate since a final distribution may not be made to beneficiaries until the net value of the estate is determined.  These issues may take months or years to resolve.  One type of claim that reoccurs in estates concerns an assertion by a person that the decedent promised to pay the claimant for services that were rendered for the care of the decedent before his death.  In these cases there is usually no written contract or agreement regarding the services or the amount of the compensation to be paid.  As a result, a fiduciary must defend against a claim which is typically supported only by the oral declarations of the claimant.

A New York estate may have many different types of assets.  These may include bank accounts, brokerage accounts, real estate, and retirement funds.  Each of these items can present various issues for an executor or administrator.  The estate fiduciary has an obligation to collect and protect estate assets.  The failure to do so can be a breach of fiduciary duty.  The New York Probate Lawyer Blog has published many articles discussing estate settlement and the responsibilities of administrators and executors.

One asset which may have unique complexities is a cooperative apartment.  A cooperative apartment, particularly in the New York City area, is a very common type of residence owned by a decedent.  A cooperative apartment is not real estate.  The ownership interest is personal property in the form of stock in the cooperative corporation.  This interest allows the owner to become a lessee under a proprietary lease where the cooperative corporation is the lessor or, in other words, the landlord.  As a result, the estate fiduciary, just like the decedent, must comply with the rules and regulations of the co-op with regard to all aspects of the apartment.

One of the main issues that a fiduciary may face is in connection with the sale of an apartment.  Most co-ops require approval of any transfer or sale by the cooperative Board of Directors.  The prospective purchaser must apply to the Board for approval.  In New York, the Courts allow a tremendous amount of discretion to a co-op in approving or rejecting a sale.  The Board is not even required to provide any specific reasons if it decides to reject an application from a prospective purchaser.  In the absence of some type of discrimination, an estate fiduciary is at the mercy of a co-op board in trying to sell an apartment.  This can be very frustrating, particularly when the estate is being charged monthly for maintenance fees and mortgage payments.  The sale of residential real estate or a condominium apartment does not require approval from a third party.

One of the aspects involved with administering an estate in New York is the identification and collection of estate assets.  A decedent may have owned bank accounts, security investments, real estate or business interests.  In many cases, it is rather easy for an executor or administrator to obtain information regarding assets.  A decedent may have various records at home or at a business office.  Also, bank statements or other information may be received in a decedent’s mail.  Another source of information are items contained in a decedent’s income tax returns such as the names of banks or financial institutions which paid interest income or dividends.  If the decedent had an accountant, this person may be in possession of asset information.

One problem that is faced in many estates is that a decedent may have transferred assets prior to death.  When this occurs, it may be difficult to determine the identity of these assets.  Also, once the assets can be identified, issues arise as to whether such transfers were valid or should be revoked due to lack of capacity or undue influence.

The New York Probate Lawyer Blog has published many articles concerning the discovery of assets belonging to a decedent.  An administrator in an intestate estate or an executor in a probate situation can utilize the process provided by Surrogate’s Court Procedure Act 2103, entitled “Proceeding by fiduciary to discover property withheld or obtain information”.  This statute allows the estate fiduciary to commence a proceeding to discover possible estate assets held by third parties and to have the Surrogate’s Court determine whether the assets should be found to be part of a decedent’s estate.

The essence of administering any estate begins with the appointment of an estate fiduciary.  Estate settlement cannot occur without a party who is legally authorized to act.  There are many variables which come into play regarding fiduciary appointment.

In some cases, the decedent left a Last Will and Testament.  This document typically names a person who is to be appointed as the executor.  There may be designations of successor or alternate executors, as well.  When a person dies intestate, without a Will, the provisions of Surrogate’s Court Procedure Act Section 1001 entitled “Order of priority for granting letters of administration,” sets forth the individuals who have the priority right for appointment as an estate administrator.  In the vast majority of matters, there is someone who is either designated in a Will or otherwise has a right pursuant to the estate statutes to be appointed, who will petition the Surrogate’s Court for the authority to act as the estate fiduciary.  In fact, it is not uncommon for there to be estate litigation among competing parties for appointment.  These disputes can be based upon claims that the applicant is unfit or unqualified for appointment or that there are competing documents which the Court should consider in making the appointment.

Once in a while, there are estates where there is no one either qualified, authorized or willing to step forward to initiate estate settlement proceedings.  These matters typically occur where the decedent did not leave a Will and there are no known next of kin who have the authority to commence a proceeding for the appointment of a fiduciary.  There may also be situations where all of the named parties in a Will are deceased or their whereabouts are unknown.  The usual result in these cases is that a Public Administrator is notified.  A Public Administrator is a county official whose role is to administer estates where there is no one either qualified or willing to do so.  The Public Administrator engages its own attorneys who handle the proceedings in the Surrogate’s Court.

The administration of a New York estate can involve many different aspects relating to the decedent’s lifetime affairs.  For example, after the Court appoints an executor or administrator, issues relating to a business may need to be resolved.  The business may have been in the form of a corporation or other entity such as a limited liability company or partnership.  There may be litigation or claims between the decedent’s estate and other business owners.

Over the years, questions arose as to the extent to which the Surrogate’s Court had the jurisdiction to resolve disputes and issues relating to such matters.  It is now well established that all such issues can be dealt with by the Surrogate.  The Court generally looks to see whether the issue affects the administration or interests of an estate.  If a nexus is found, the Surrogate will usually accept jurisdiction.

Utilizing a broad approach facilitates estate settlement.  It is more efficient to have one Court oversee the many diverse issues affecting an estate and the interests of the beneficiaries.