Estate Administration

Published on: December 10, 2014

Defense Counsel Moves for Change of Venue in Wrongful Death Action

by Stephen Bilkis

Records reflect that for reasons unbeknownst to the court at this time, the decedent, a 19 year old female, was at a Hotel located approximately one half mile from her residence, where she resided with her mother. While at the Hotel, the decedent made her way to the roof of the Hotel where she plunged to her death. The mother filed for Limited Letters Testamentary for the estate administration, which were issued to her by the Surrogate County court in order to bring an action for a potential wrongful death action. The mother’s Verified Complaint read that at the time of the commencement of the action, she was a resident of the County. The verified complaint contains allegations of fact in support for a single cause of action for damages due to wrongful death and the decedent’s conscious pain and suffering up until her death. The defense counsel moved to transfer the venue.

A Probate Lawyer said that the mother’s counsel, whose law office is located in Kings County, selected Kings County as the venue in the Summons of this action based on the purported residence of the decedent. Yet, the Verified Complaint lists Richmond County as the decedent’s residence. Article 5 of the CPLR sets forth the rules governing proper venue. Section 503 states “the place of trial shall be in the county in which one of the parties resided when the action was commenced.” It has long been held by the courts that residency, for purposes of venue, is defined as “where a party stays for some time with a bona fide intent to retain the place as a residence for some length of time and with some degree of permanency.” It is further established that any documents or “indicia of residence acquired after the commencement of the action are irrelevant to the determination of residency,” for purposes of venue. In Siegfried v. Siegfried, the Appellate Division, Second Department stated that the court should not consider factors such as bank statements, voter registration, and a library card that came about after the commencement of the action. Documentary evidence that can prove a person’s residence include driver’s license, voter registration card, and utility bills. Simple letters of correspondence sent to the purported address will not suffice. Furthermore, mere affidavits with conclusory statements, without being buttressed by ample documentary evidence, is not enough to prove a person’s residence. However, an affidavit supplemented with rent receipts, telephone bills, and lease agreements does create the “necessary indicia of residency.”

An Estate Lawyer said that on both the Verified Complaint and the Amended Verified Complaint, the first allegation stated that she was a resident of Richmond County at the commencement of the action. This is not merely an “unfortunate typographical error” or a “regretful misreading” as she contends. It clearly stated that she was a resident of Richmond County. Here the complainant has put forth numerous documents to try and prove her residency is Brooklyn, including tax returns, cell phone bills, pay stubs, and bank statements. Only one document, a pay stub dated December 2009, was sent to the Brooklyn address before the start of the action. All the other letters and forms are undated or dated after the commencement of the action and are therefore, irrelevant in trying to prove residency.

Published on: December 9, 2014

The Court Decides if a Company is Authorization

by Stephen Bilkis

Probate Lawyer from the records, the instant case involves a will contest as regards the legacy of the decedent. The decedent died in 1905. By her will she bequeathed $10,000 to a Hose Company ‘to be kept at all times intact and the income derived from the safe and judicious investment thereof to be devoted to the reasonable and proper uses of said company for whatever purposes its members acting as an organization may see fit to direct.’ If, however, the legacy for any reason ‘shall lapse or fail or for any cause not take effect in whole or in part,’ she bequeathed it to the one who survived her.

The Hose Company was a corporation organized for the purpose of aiding in the suppression of fires in the village. It could only engage under the statute in such business as properly belongs to hose companies. In taking part in the prevention of fires it was placed under the control and subject to the orders of the village fire authorities. Annually its trustees must file an inventory of its property and an affidavit that it has not directly or indirectly engaged in any other business. Before its certificate of incorporation could be filed it had to be approved by the trustees of the village. It might take and hold personal property bequeathed to it, and it was further said to be capable of taking and holding property for the purpose of its incorporation and for no other purpose. It was named after the father of the decedent. To it the legacy was paid in 1906.

The issue raised before the court is whether or not the company is authorized to received the legacy.

Published on: December 7, 2014

Court Resolves Dispute Between Two Businesses

by Stephen Bilkis

A Probate Lawyer said the records reflect that the instant case is one wherein estate of the parties are involved for settling the dispute between them. This involves two domestic businesses located in Richmond County, owned by two persons. As a result of disagreements in their business relationship, several lawsuits were filed regarding the Businesses. The first Lawsuit involved an entity Corporation. The initial complaint in the matter alleged that one of the owners obtained majority control of and tried to remove the partner from his responsibilities in the corporation. The complaint recently amended to add claims alleging other breaches of agreements and breaches of fiduciary duty by his partner. On May 25, 2010, a temporary restraining order was granted that, pending the hearing and determination of the motion at issue, directed that 1) the owner shall not cause nor allow the corporation to make any repayment of loans or interest on loans purportedly due to him or his entity, nor enter into a new loan from him or his Entity, nor incur any debt obligation or make any expenditure without advance notice to the partner and without his partner’s written consent; 2) he shall not cause or allow the 2009 federal and/or state tax returns of the corporation to be finalized or filed; and 3) they were to immediately provide to the partner all corporate ledgers, financial statements and loan documents for the years 2008-2010.

An Estate Lawyer said the second Lawsuit which involved another entity. The allegations in the second Lawsuit were that 1) the owner wrongfully diverted a payment in the sum of $100,000, due to his partner, to the corporation without his partner’s consent; and 2) he failed to distribute the other entity’s profits to his partner and other members. After conducting hearings on the matter, the judge entered judgment in favor of the Partner. The Judge issued Orders holding that the owner was in contempt for transferring certain funds in violation of court orders, ordering him to pay his partner certain monies and directing that he was to be incarcerated if he failed to make the required payment. The owner appealed the judgments but were denied.

The third Lawsuit filed involved a third entity. In this Lawsuit, the partner alleged that the owner refused to distribute the profits. The complainant’s counsel submits that these Lawsuits establish that 1) the owner has repeatedly and improperly transferred monies between entities, to fund certain real estate projects to which the Partner does not consent; and 2) owner has attempted to use his control over the finances of these entities to pressure his partner into consenting to these transferrals. The counsel also contends that the parties in the matter at bar disagree as to whether there exists an arrangement between them that permits these transferrals; the complainant denies that such an arrangement exists.

Published on: December 6, 2014

court Decides Whether or Not Sale of Property Should be Affirmed

by Stephen Bilkis

A Probate Lawyer said sources revealed that in the instant case, the decedent died insolvent, leaving a last will and testament, which has been duly admitted to probate as a will of real and personal property. The executor and executrix of the deceased, as creditors, petitioned the surrogate’s court for the sale of the real estate of which the decedent died seised, for the purpose of the payment of their debts. The decedent was also owing the Bank, for money loaned in his lifetime and used in the business of the Knitting Company. The bank appeared in this proceeding and interposed an answer setting up a provision of the will of decedent, and demanding that the real estate known as the ‘Knitting Mill’ be excepted from any decree of sale which might be made in the proceedings. The provision of the will referred to devises and bequeaths the knitting mill property to a son-in-law of the testator, but subject to the following provision that the devise and bequest, however, is upon the condition that all the debts and obligations of every name and nature owing by the said Knitting Company, and which has been contracted by or on account of that branch of his business, is assumed and paid by said the son-in-law; and decedent hereby impress a trust and lien upon the said real and personal property hereby devised for the payment of such debts and obligations, and make such payments of those debts a lien thereon. The son-in-law was appointed sole executor of the estate. Upon the death of the testator he took possession of all of the property of the estate, and carried on the mill business under the same name of the Knitting Company. He subsequently failed and became insolvent, and failed to pay the claim of the Bank or the other creditors of the estate.

The issue is whether or not the surrogate court’s ordering the sale of the property should be affirmed.

A Manhattan Probate Lawyer said the jurisdiction of the surrogate’s court in proceedings to dispose of the real property of a decedent for the payment of his debts is prescribed by the provisions of the Code of Civil Procedure. In the transmission of the property of a deceased debtor to his heirs at law or next of kin, or to his devisees or legatees, it becomes charged with his debts, and it may be appropriated in payment thereof in the manner provided by the Code. These provisions carefully prescribe the order of the payment of the debts, including funeral expenses and judgments docketed against the decedent in his lifetime, and prohibit preferences over others of the same class. The rights of creditors thus provided for attach to the real estate of the decedent immediately upon his death, and continue during the period of three years after the issuing of letters testamentary or of administration upon his estate. These rights which so attach are superior to those acquired by any devisee or legatee under the will. A solvent testator may undoubtedly make certain debts a charge upon a parcel of his real estate. He may devise a part of his real estate to a particular person upon condition that he pay the whole or a specified portion of his indebtedness, but an insolvent testator cannot prefer one creditor over another in such a way as to deprive the general creditors of their right to have his real estate sold and distributed among them after the personal estate has been exhausted.

Published on: December 5, 2014

Court Discusses ‘One Dollar Clause’ in Real Estate Case

by Stephen Bilkis

Probate Lawyers said that records show that this is a proceeding in eminent domain to acquire title to real property required for the widening of an Avenue from one Road to another. This proceeding involves matters of the estate, not pertaining to probate but which affects the estate by the City’s road widening project. It is undisputed that the claimant owned a parcel 100 feet by 100 feet on the specific Avenue upon which is a building approximately 40 feet in depth and 100 feet wide, fronting on the Avenue and on or close to the building line. It consists of 5 stores. The City has taken 1,852 square feet of the claimant’s 10,000 square feet. This 1,852 square feet includes 1,340 square feet on the front of the building. In short, some 14 feet must be sliced off the front of the building for its entire width. The entire parcel, including the building, was purchased from the City of New York at public auction by the fee claimant in 1957.

The issue presented is whether the claimant fee owner is entitled to One Dollar or substantial damages resulting from the acquisition of a portion of the building. The determination of this issue requires a construction of this ‘One Dollar Clause’. Such clause appears also in the brochure of sale which gave a description of the property, its location, the upset price and the terms and conditions of sale.

An Estate Lawyer said the City of New York maintains that the purchaser had full knowledge of the proposed acquisition, as shown on the damage map; that the deed stated that the claimant ‘shall only be entitled to compensation for such acquisition to the amount of One Dollar’; that the above language in the deed is clear and unambiguous; that the claimant knew that the front part of the building would eventually be chopped off, damaging the remainder and that damages would be limited to One Dollar. The claimant fee owner agrees that the language of the deed is clear and unambiguous but contends that the award of One Dollar applies only to the land and the portion of the building within the bed of the mapped street; and claimant requests an award for consequential damage to the portion of the building not within the bed of the mapped street.

Published on: December 4, 2014

Petitioner Files a Motion to Dismiss for Lack of Subject Matter Jurisdiction

by Stephen Bilkis

Probate Lawyers said before the court is a motion to dismiss, pursuant to CPLR 404 for lack of subject matter jurisdiction, filed on behalf of the co-executor of the estate of the deceased herein. The motion seeks dismissal of a petition filed on behalf of another co-executor of decedent’s estate, which petition requested a court order directing the co-executor, and a corporation, doing business as a stock transfer agent, to execute documents necessary to complete the transfer of another corporation, corporate stock certificates, currently registered in the name of the decedent, to another in his individual capacity.

An Estate lawyer said that the decedent died on May 14, 2010, leaving a last will and testament dated August 6, 2003. The decedent was survived by three children. The will nominated co-executors and directed that each receive an equal one-half share of the decedent’s residuary estate. The will was admitted to probate and letters issued to co-executors on October 27, 2010.

In his petition, the executor alleges that the decedent gifted two stock certificates to the executors on or about December 29, 2004, by endorsing the certificates in blank, communicating that he was making a gift, and physically delivering the certificates to the executor. He further alleges that the decedent’s intent was to make a gift to the executor of all of decedent’s interest in the stock, and that the gift was then accepted. Photocopies of the stock certificates have been filed and the reverse side of each certificate, which is a standard form for the sale, assignment and transfer of the shares of stock, reflects the date of December 24, 2004 and the decedent’s signature; the balance of each form is entirely blank. On the certificate, the decedent’s signature does not appear on the proper line for a transfer of the shares.

Published on: December 3, 2014

Court Reviews Will Provisions

by Stephen Bilkis

Probate Lawyers saidiIn this Probate case, Decedent died on January 7, 1881, leaving a last will and testament, the third and seventh clauses of which are as follows: ‘Third. I desire to make ample provision for the support and maintenance of my said wife, and, in addition to what I have above given, I order and direct that my executors, before paying the legacies hereinafter mentioned, do set apart of my estate the sum of one hundred thousand dollars, and keep the same invested and out at interest, and that they apply the interest or income therefrom to the use of my said wife, in half yearly payments, or oftener, if convenient, during the term of her natural life; and that from and after her death they pay over the said sum of one hundred thousand dollars to our adopted son, if he shall then have arrived at the age of twenty-eight years; but if at the decease of my wife he shall not have arrived at the age of twenty-eight years, then my executors are directed to keep the same invested until he shall have arrived at that age, and that they apply the interest or income to his use, and on his arrival at the age of twenty-eight years the said principal and the accumulated interest (if any) is to be paid to him; but if my said adopted son shall die before he arrives at the age of twenty-eight years, and not leaving lawful issue him surviving, then the said sum of one hundred thousand dollars shall be divided as follows, and I do give and bequeath the same accordingly.

An Estate Lawyer said it was held by the surrogate, and upon appeal by the supreme court, that the heir took a vested remainder in the $100,000 which the executors were directed to set apart and hold for the benefit of the widow during her life, and that he took it by virtue of the language contained in the third clause of the will; that, therefore, the testator did not die intestate as to any portion of his estate; and that his next of kin were not entitled to any hearing upon the accounting. Without determining whether or not the courts below were right in their construction of the third clause of the will, we have no reason to doubt that he took a vested interest in remainder in the $100,000 under the residuary clause. It is clear that the testator did not intend to die intestate as to any portion of his estate. He had taken particular care as to the dispositions made in the prior clauses of the will, and it is true that in several of them he provided distinctly that in certain contingencies the gifts should become part of his residuary estate, and that he made no such provision in reference to the $100,000. But we do not deem that circumstance of much importance.

Nassau County Probate Lawyers said in this case the residuary estate was large, and no direction was given in the will for the disposition of the income thereof until the heir reached the age of 28 years; and the next of kin of the testator, therefore, claim that such income was undisposed of, and that they were entitled to the same. We think the disposition of the income is controlled by the provisions of the Revised Statutes, which provides that ‘when, in consequence of a valid limitation of an expectant estate, there shall be a suspense of the power of alienation or of the ownership, during the continuance of which the rents and profits shall be undisposed of, and no valid direction for their accumulation is given, such rents and profits shall belong to the persons presumptively entitled to the next eventual estate.’ There was no direction whatever for the accumulation of the income.

Published on: December 2, 2014

Court Decides Apportionment of Estate Taxes

by Stephen Bilkis

Probate Lawyers said that according to sources, in two of three consolidated proceedings the trustees under two indentures of Inter vivos trusts, seek judicial settlement of their accounts and construction of certain provisions of the trusts. Specifically, as holders of shares of stock of a regulated investment company (sometimes called a ‘mutual fund’), they seek instructions whether within the purview of the provisions of the trusts, capital gains distributions made by the company are income distributable to the income beneficiaries of the trusts or are principal allocable to the corpora of the trusts. They also request instructions concerning the allocation of estate taxes and attorneys’ fees among the persons interested in one of the trusts. In the third proceeding the executors of the will of the settlor of the trusts request instructions concerning the allocation of estate taxes and attorneys’ fees insofar as they are referable to one of the trusts and other property. The parties have stipulated, with the approval of the court, that examination and settlement of the trustees’ accounts shall be deferred pending determination by the court of the issues on which instructions are sought. There shall be considered first the treatment of capital gains distributions, as between principal and income, paid to the trustees on the shares of stock of the regulated investment company. At the time of the institution of these proceedings the trustees held 81,247 shares of stock of an investment company in the corpus of the 1931 trust and 120,000 shares in the corpus of the 1935 trust.

An Estate Lawyer said that the investment company has qualified as an open-end regulated investment company, having registered under the provisions of the Investment Company Act of 1940, as amended. Each of its investors own a pro rata share of the securities held in its portfolio. Its earnings are acquired from dividends and interest paid on securities in its portfolio which are classified as ordinary income, and also from the net profits realized on the sale or exchange of its investments which are designated as capital gains. As required by the Investment Company Act, its statements to its shareholders and the public specifically characterize the source of the earnings. It is not disputed that ordinary income is properly treated as income distributable to the income beneficiaries. The issue arises as to the allocation of the capital gains distributions. The petitions of the trustees allege that each year the Investment company pays capital gains dividends which are payable at the election of the owner of such shares in cash or in additional shares of the corporation’s stock. They are uncertain as to whether such capital gains dividends are income and distributable to the income beneficiaries of the trusts or are principal to be retained by the petitioners in the corpora of the trusts. The income beneficiaries maintain that they should be treated as income and distributed to them. The guardian ad litem appointed to represent the infant remainder men on this issue contends that they are principal and should be added to the corpora of the trusts. Initially, consideration must be given to the trust instruments to determine whether the settlor’s intention concerning the distribution can be ascertained therefrom. If it can, it would be controlling.

Queens Probate Lawyers said the paramount rule in the construction of Inter vivos trust indentures is to ascertain the settlor’s intention as expressed in the instruments in the light of the circumstances surrounding and attending their execution, and when ascertained to effectuate that intention unless contrary to public policy or an established rule of law. Other than those heretofore related, the record is devoid of any extrinsic circumstances existing at the time of the execution of the instruments which would shed light on the settlor’s intentions concerning the allocation, as between principal and income, of the capital gains dividends with which we are here concerned. There is no evidence that at the time of the amendment of the 1931 trust in 1935 and the creation of the 1935 trust that the settlor was familiar with the corporation of regulated investment companies or the nature of their dividend distributions. As a medium of investment those companies grew in popularity as a result of the enactment of the Investment Company Act of 1940, and the tax advantages accruing to the companies and shareholders under sub-chapter M of the Internal Revenue Code of 1954 where the company submits to federal regulation thereunder. It was not until the settlor decided in 1958 to exchange Pine’s assets for the shares of an investment company that the evidence discloses the settlor’s awareness of their form of distribution of income and capital gains dividends. Looking to the trust indentures the only reference to the treatment to be accorded to corporate dividends is found in the provisions that ‘any and all dividends payable in the stock of the corporation or association declaring or authorizing the same, and declared and authorized in respect of any stock constituting in whole or in part the principal of the trust fund, as well as all rights to subscribe for new or additional stock, shall be wholly principal and not income of the trust.’ However, those provisions do not contain any express direction concerning the allocation of dividends payable at the election of the trustees in cash or in additional shares of the Investment company. It is so conceded by the guardian. Nor may the distribution by the Investment Company be considered as a right to subscribe for new or additional shares of stock. Implicit in the term ‘rights to subscribe’ as used in the law there is contemplated an increase in the capital of the corporation giving its shareholders the right to subscribe to new shares at less than the market value of the shares. When capital gains distributions are made by the investment company, they are not accompanied by any increase in its capital stock, nor are their shareholders required to pay for the additional shares they may elect to receive. Being unable to glean the settlor’s intention concerning the treatment to be given those capital gains distributions guidance must be sought in the presumptive canons of interpretation adopted by the courts and the Legislature ‘to fill such gaps and to supply that for which the settlor has not lawfully provided.’

Published on: November 25, 2014

Court Decides Motion for Summary Judgment

by Stephen Bilkis

A New York Probate Lawyer said that before the court is a motion for summary judgment filed in connection with petitions for the removal of fiduciaries in the related estates of the decedents. For the reasons set forth below, the court declines to entertain those portions of the motion seeking the removal of fiduciary in any and all of his fiduciary capacities or seeking relief from the other, and denies the balance of the relief, except that the request for an order compelling compliance with discovery demands will be held in abeyance pending the court’s review of all of the relevant documents in camera.

A Kings County Estate lawyer said that Decedents were a husband and wife who tragically died together in an automobile accident on April 22, 2005. They were survived by their three adult sons, movants herein. Both decedents executed wills on November 19, 1986, and both wills provide that in the event that the sons is not survived by a spouse, then the brother shall serve as Executor.

A New York Estate Lawyer said the wills were filed for probate on October 13, 2005 and admitted to probate on March 1, 2006. Letters testamentary in each estate issued to the son on March 3, 2006. At the same time, the son received letters of trusteeship in the father’s estate.

Published on: November 23, 2014

Court Reviews Petition to Modify Endowment Fund

by Stephen Bilkis

A New York Probate Lawyer said this is a petition to modify restrictions on an endowment fund, pursuant to section 8-1.1 of the Estates, Powers and Trusts Law or, in the alternative, section 522 of the Not-for-Profit Corporation Law. Petitioners, Trustees of a University, seek an order authorizing the subdivision of an endowment fund created by a testamentary bequest to the College of Medicine. The Attorney General of the State of New York (on behalf of ultimate charitable beneficiaries) has reviewed the current audit of the fund and raises no objection to the relief requested in the petition.

A Kings County Estate lawyer said that a decedent died on March 9, 1985. Her last will and testament was admitted to probate by a decree of this court dated April 5, 1985.

In September 1986, Columbia University received $1,500,000 from the estate of the decedent. The University established the Professorship (“Chair”) for Clinical Medicine. As of September 30, 2009, the value of the endowment fund had increased to over $5,000,000.