New York Trusts and Estates attorneys are often asked by clients whether certain circumstances or actions by fiduciaries would require the removal of a fiduciary of the Court. A fiduciary can be an Executor, Preliminary Executor, Trustee, Administrator or Temporary Administrator.
In a typical scenario a beneficiary of an estate may be concerned because the fiduciary has a claim against the decedent’s estate or has received funds from the decedent by gift or through a joint bank account. The estate beneficiary perceives these situations as creating a conflict of interest in Estate Settlement because the fiduciary will not seek to recover funds from gifts or assets transferred to the fiduciary which the beneficiary contends were improper transfers.
Surrogate’s Court Procedure Act (SCPA) Section 711 and Section 719 provide various grounds upon which the Court may suspend, modify or revoke a fiduciary appointment. For example, SCPA Section 711(2) provides for a situation where the fiduciary has “improvidently managed or injured the property committed to his charge or by reason of other misconduct in the execution of his office or dishonesty, druckenness, improvidence or want of understanding, he is unfit for the execution of his office.”
Despite the various instances set forth in the statutes, New York Surrogate’s Courts are very careful and reluctant to remove a fiduciary, such as an Executor, who has been nominated by a decedent. The Court prefers to respect the selection of fiduciaries made by a person in their Last Will or Trust and generally will only remove the fiduciary when the misconduct is egregious or blatant.
Such was the result in a recent decision by Surrogate Nora Anderson, New York Surrogate’s Court, dated April 5, 2011, in Matter of the Application to Revoke Preliminary Letters Testamentary. This case involved the estate of a decedent named Jack E. Maurer. The decedent’s wife sought to remove the preliminary executors who were the decedent’s daughter from a prior marriage and a long-time friend. In refusing to remove the preliminary executors, Surrogate Anderson stated that “Not every breach of fiduciary duty warrants removal. Indeed, even if an executor has a claim against the estate, is involved with litigation against it, is indebted to it, or even has a conflict of interest, such circumstances do not justify removal…Even allegations of wrongdoing against a nominated executor (including conversion and embezzlement), which await judicial determination, are generally insufficient to deprive a nominated executor of the right to receive preliminary letters….”
I have represented both Estate Executors, fiduciaries and beneficiaries in situations where conflicts of interest or alleged acts of misconduct appear. The Surrogate’s Court throughout New York such as Westchester and Bronx are constantly faced with resolving these complicated matters. All parties involved should be represented by an experienced trust and estate attorney.
New York Probate Attorney Jules Martin Haas has helped many clients over the past 30 years resolve issues relating to estate settlement throughout New York City including Brooklyn and Queens. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial consultation.