New York Probate and Estate Administration Lawyer Blog
This case involves an appeal to a Surrogate’s Court decision related to the accounting filed by an executor. One of the responsibilities of an executor is to keep accurate records of all of the money coming into an estate and all money distributed from the estate. The executor must submit a final accounting to the Surrogate’s Court which will review the records and ensure that the executor handled the estate assets properly. An interested party, such as a beneficiary, has the right to object to an accounting.
M. Schneider is the executor of the estate of his father, S. Schneider. According to the terms of S. Schneider’s will, his estate went to his two children, his son, M. Schneider and his daughter, J. Kotcher. M. Schneider was to receive corporate stock, valued at approximately $144,000. The remaining estate, valued at approximately $673,000, was to be equally divided between M. Schneider and J. Kotcher.
Kotcher objected to probate. However, Kotcher ultimately withdrew her objections after M. Schneider agreed to pay her $75,000. M. Schneider then filed an amended final account, and Kotcher objected to it because it credited the estate with paying the $75,000 settlement. By crediting the estate with paying her the $75,000, her pro rata share of the estate taxes increased. Kotcher asserted that the $75,000 was paid by M. Schneider personally, and not the estate. The Surrogate’s Court disagreed, concluding that the stipulation of settlement required the $75,000 to be paid by the estate and not Marvin Schneider personally. Kotcher appealed. The appellant division found in favor of Kotcher.
The court reasoned that the intention of Kotcher and Schneider was for the settlement to be paid by Schneider personally. In agreeing to this, Kotcher withdrew her objections to probate and the expectation was that the estate would then be distributed according to its terms. In fact M. Schneider issued a check to Kotcher from his business account and testified that he paid Kotcher “out of [his] own pocket”. Thus, the Surrogate’s Court improperly concluded that the settlement was to be paid by the estate.
Accordingly, the court sustained Kotcher’s objections and ordered the recomputation of the final account with an appropriate allocation of the estate taxes. Because the legal fees related to the accounting proceedings were not rendered solely on behalf of M. Schneider personally, it was appropriate that the $6000 in legal fees related to the accounting proceeding be paid from the estate to the attorneys for M. Schneider as executor.