Articles Posted in Estate Administration

In this case, the Appellate Division considered whether assets acquired by a testator’s estate after the death of the testator should be distributed pursuant to the terms of a will or by the laws of intestate succession.

The purpose of a creating a will is to enable the testator to determine who gets their property after they pass away.  Wills can be very general, e.g. leaving all property to one person such as spouse.  Or, they can be very detailed, e.g. leaving specific property such as real estate, jewelry, or cash to different people. The common thread is that the testator’s intent is to leave their property, meaning whatever they have at the time of their death, to other people.

There are instances, however, when the decedent acquires property after their death. Because they had no knowledge of the property prior to their death, and certainly not at the time they made their will, they could not have intended to dispose of that property in their will.

Estate administration has two main goals.  One goal is to distribute the assets of a decedent according to the terms of their will.  If there is no will, assets are distributed according to the law of intestate succession. The other goal is to pay the decedent’s debts as well as expenses related to estate administration.  These two goals can be at odds with each other, particularly if there are not enough assets in the estate to pay all of the debts and also leave the beneficiaries and heirs with much or anything at all.

While the testator’s goal may have been to provide for their family or other beneficiaries, the law generally puts the interests of creditors ahead of the interests of beneficiaries and heirs. Creditors are paid first according to a statutory order of priority.  Beneficiaries and heirs receive distributions only if there are assets left over in the estate after creditors are paid and after expenses of administrations are paid.

There are potentially several different types of debts owed by a decedent at the time of their death or expenses incurred during administration.  Under SCPA § 1811(1), debt must be paid according to the following order of priority.

The administrator of an estate is a fiduciary.  As such, they are held to a high standard of conduct.  They must perform their responsibilities with care and make the interests of the estate a top priority.  They must be trustworthy and must not self-deal.  If an administrator violates their duty of care, their actions can be challenged in court.  If the court concludes that the administrator was in breach of their fiduciary duty, potential consequences include reversal of the problematic transaction, suspension, or removal.

In In re Seward, on April 2, 2001, the decedent’s will was admitted to probate and letters of administration  were issued appointing co-administrators.  Nearly 20 years later, in September 2018, a petition was filed to revoke the letters of administration, to suspend the administrators as fiduciaries, and to appoint a new administrator.  The petitioners alleged that the administrators had allowed the estate to languish for nearly 20 years.  Further, the petition alleged that one of the administrators was acting against the interests of the estate.

New York law provides that the Surrogate’s Court can suspend or revoke letters issued to an estate administrator or other fiduciary. Reasons for suspending or revoking letters include evidence that the fiduciary wasted or misapplied assets, damaged estate property, removed property without approval, or failed to follow an order of the court. SCPA 711

A last will and testament allows a testator to specific who will receive their property upon death.  It is an effective way to ensure you’re your property goes to who you want to receive it. However, many people do not leave wills, dying intestate.  As result, New York’s law of intestate succession applies and dictates who gets the property in the decedent’s estate.  The surviving spouse and children, if any, would be entitled to inherit.  In the absence of either, the decedent’s parents would be next in line to inherit, followed by siblings.

In Gonzalez, the 27-year-old decedent died in the World Trade Center on September 11, 2001.  She was survived by her father, sister, and brother.  The brother and sister applied for letters of administration.  Separately, the father did as well. The brother and sister petitioned the court for summary judgment granting their petition for the issuance of letters of administration. Their request for summary judgment also requested that the court dismissed the decedent’s father’s petition despite the fact that the father was the decedent’s presumptive distributee.

The petitioners argued that the father is disqualified from inheriting because he failed to or refused to provide for her or that he abandoned her.  As a result, under EPTL 4-1.1 her estate should be distributed as if the father had predeceased the decedent.  That would mean that the petitioners would be her distributees.

In this case, the United States District Court, N.D. New York considered whether the plaintiff could proceed with a lawsuit against a decedent’s estate.  The decedent had lived in New York State for many decades and had even served as the Superintendent of the Division of State Police. However, the decedent died in Conyers, Georgia in May 2019 and had been a resident of Georgia since 2012.  Despite this, plaintiff filed a lawsuit in New York against the decedent’s estate.

Under New York law, an estate is not an entity that can be sued.  Any action against an estate must be brought against the person or entity named as administrator of the estate.  At the time of the lawsuit, no one had been appointed to serve as administrator of the decedent’s estate.

The plaintiff sought to appoint a public administrator of the decedent’s estate. Under N.Y. Surr. Ct. Proc. Act Law § 1002(1)), in case of intestate estates, New York allows any interested party to petition the court to grant letters of administration to the party named in the petition.  Even though the widow of the decedent had the right to be appointed administrator, she has not sought such appointment and seemed to indicate that she did not wish to be appointed.  The plaintiff pointed out that under the New York Surrogate’s Court Procedure Act, a public administrator can be appointed if no one who had a greater right to be appointed is available or willing to serve as administrator.

In this case the Supreme Court considered whether a wife’s claim for spousal support survives her death and can be continued by her estate. It is not unusual for a divorce proceeding to stretch out over a number of years as the parties are not able to agree on various issues.  However, in this case the couple never was able to reach a settlement and receive a judgment of divorce.  Instead, the marriage ended with the death of the wife while the divorce was still pending.

The history of this unusual case is that the couple was in the middle of a divorce proceeding that was initiated 6 years ago when the court converted the pending divorce action to a proceeding for spousal support under Article 4 of the Family Court Act.  While that proceeding was pending, the wife, who had been living in a nursing home after suffering a debilitating health crisis, died. The wife’s estate, through her executor, now seeks to continue the spousal support proceeding against the husband, thus converting the case to an estate litigation matter. The husband objects arguing that the wife’s claim for spousal support abated when the divorce proceeding ended.

The law of abatement is that for most actions abatement occurs upon the death of one of the parties if the issue involved in the case is personal in nature or involves the personal status of a party.  A marriage and divorce are certainly personal matters.  The marriage terminates upon the death of a party and the divorce action abates because there is no longer a marriage to dissolve.  Because matters of spousal support are ancillary to a divorce action, they also abate upon the abatement of the divorce action.  Thus, if this spousal support action was ancillary to the couple’s divorce, the husband would be correct in that the action would have abated.  That is not the case here

In this case the Appellant Division considered whether a claim against an estate was time barred.

The decedent, J. Hollis, died in October 2015. She was survived by six children. The decedent’s will had a specific provision related what should be done if any of her children owed her money at the time of her death. The provision provided that any money owed was to be deducted from that child’s inheritance.

Hollis, one of the decedent’s children, died three months later, in January 2016. His wife, B. Hollis was appointed the administrator of his estate. The executor of the estate of J. Hollis filed a claim against the estate of P. Hollis for $147,265.35, representing loans J. Hollis made to P. Hollis from 2005 to 2011, as one of the duties of an executor is collecting debts owed to the estate.  From the opinion it is not clear whether P. Hollis had received a distribution from his mother’s estate. However, B. Hollis filed a motion for summary judgment disallowing so much of Peter’s claim as represented money purportedly borrowed by the decedent between April 2005 and January 2008 on the ground that recovery was barred by the six-year statute of limitations. Part of the estate administration process is to pay debts owed by the estate and settle claims against the estate.

In this case the Surrogate’s Court considered whether the actions of a person who petitioned the court for letters of administration amounted to dishonesty, making him ineligible under Surrogate’s Court Procedure Act § 707.

An executor or estate administrator is the person who is responsible for managing an estate after the death of the testator. The person is referred to as an executor if he (or she) was named in the decedent’s will. In doing so the testator is merely nominating the person.  The nominated person must still petition the Surrogate’s Court to receive “letters testamentary.” Letters testamentary is a legal document granting the authority to manage the estate and ultimately distribute its assets.  If someone other than the person named in the will wants to be manage the estate and become the estate administrator, then he must petition the court for “letters of administration.”  Without letters, whether the person was named executor in the will or not, he has no authority over the decedent’s estate. The court will only grant letters to petitioners who are eligible.

In Walsh, a brother and sister engaged in probation litigation related to the estate of their father.  While the father nominated the sister to serve as the executor of his estate, the son petitioned the Surrogate’s Court for letters of administration.  The dispute between the siblings centered on two main issues:  whether the brother was dishonest about having possession of the father’s 2000 will and whether the daughter was in possession of property owned by the father’s estate.