New York Probate and Estate Administration Lawyer Blog

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 24, 2014

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by Stephen Bilkis

A New York Probate Lawyer said the petitioner moves for summary judgment on her entitlement to take an elective share of the decedent’s estate pursuant to EPTL 5-1.1-A. In opposition, respondents, the coexecutors of the estate, argue the motion is premature as no discovery has been conducted, and there are material and triable issues of fact raised by their counterclaims and defenses.

A Kings Estate attorney said that respondents filed a verified answer alleging various affirmative defenses1 and counterclaims seeking to: (1) have the alleged marriage between the decedent and petitioner deemed null and void ab initio, and to annul the marriage nunc pro tunc; (2) dismiss the petition in its entirety; (3) vacate petitioner’s notice of election dated October 26, 2006; and (4) award the estate damages for the costs of this proceeding. Alternatively, if petitioner is not disqualified as a surviving spouse, they seek an award of compensatory damages equal to the elective share, plus interest and costs of the proceeding for the loss to the estate resulting from petitioner’s fraudulent conduct.

A New York Estate Lawyer said the decedent died on June 16, 2006, survived by two sons, the coexecutors herein, and four grandchildren from a prior marriage. Petitioner served as the decedent’s caretaker during the last decade of his life. The decedent’s will dated July 10, 1982, was admitted to probate on October 30, 2006. Letters testamentary were issued to the nominated coexecutors on that date. The decedent’s children and grandchildren were the sole beneficiaries under the will. The record reflects that a notice of election dated October 26, 2006 was timely filed by petitioner, and was properly served upon the coexecutors.

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.

Published on: November 22, 2014

coexecutors Deemed Unfit in Probate Proceeding

by Stephen Bilkis

A New York Probate Lawyer said in this Probate action, an Order and decree (one paper), Surrogate’s Court, New York County, entered on or about May 22, 1995, which removed the preliminary coexecutors, and appointed as temporary administrators, affirmed, without costs.

A Kings County Probate attorney said that the Surrogate’s removal of the preliminary coexecutors pursuant to SCPA 711 and 719 was a proper exercise of discretion, and no evidentiary hearing was required under the particular circumstances. While the Surrogate’s characterization of the facts as “undisputed” may not have been technically accurate, the unfitness of the coexecutors was established by a combination of documentary proof and the coexecutors’ own concessions, and the totality of written submissions failed to raise any triable issue of fact.

The unfitness of the coexecutors to take responsibility for this $1.2 billion estate, bequeathed primarily to charity, was manifest. While “courts will not undertake to make a better will nor name a better executor for the testator”, the standard of behavior of a fiduciary is “[n]ot honesty alone, but the punctilio of an honor the most sensitive”.

Published on: November 21, 2014

petitioner Claims Statute of Limitation Defense is not Valid

by Stephen Bilkis

A New York Probate Lawyer said the decedent died on May 1, 2004, leaving a will which was admitted to probate on July 7, 2004. The decedent was survived by his four children. The will makes pre-residuary cash bequests of $45,000.00 to each of ghem. The will further provides that the decedent’s residuary estate be divided equally among his four children. Letters testamentary issued to his son.

A New York Estate Lawyer said that the son originally filed a First and Final Accounting of his proceedings covering the period May 1, 2004 through January 31, 2008. Thereafter, he filed a document entitled “First Interim Account of the Estate.” This document covers the period from May 1, 2004 to January 31, 2008, the same period covered by the First and Final Accounting.

Another son opposed the probate. The parties stipulated at trial that the estate had the burden of proof on the issue of whether the decedent make a loan to him. In addition, the parties acknowledged that the petitioner took an advance payment of commissions in the amount of $10,0000.00, without prior court order and repaid the sum of $10,000.00 to the estate.

Published on: November 20, 2014

Court Hears Proceeding to Settle an Intermediate Account

by Stephen Bilkis

A New York Probate Lawyer said in this proceeding to settle an intermediate account of a bank as trustee of two trusts, the appeals are from two decrees of the Surrogate’s Court, Kings County, entered October 27, 1972 and July 30, 1973, respectively. The trustee appeals from so much of the first decree as (1) adjudged that the trustee was guilty of gross neglect with respect to one of the trusts, the one established for the benefit of the testator’s two daughters, in failing to make the trust productive; (2) surcharged the trustee $23,298.27; (3) adjudged that a certain 1946 consent and release (referred to in the decree as made in ‘1947’) executed by the daughters was ineffective to bind them with respect to the conduct of the trustee subsequent to the date thereof; and (4) adjudged that the In terrorem clause in a certain probate compromise agreement of 1926 had no legal force and effect upon the daughters, who in 1926 were infants.

A Kings County Estate attorney said that the trustee, a remainderman and the executor of the estate of another remainderman appeal from so much of the second decree as (1) authorized and directed the trustee to invade the principal of the daughters’ trust by transferring it equally to the daughters and (2) terminated that trust. The trustee also appeals from the further portion of this decree which ‘confirms’ the $23,298.07 surcharge; said remainderman and executor of a remainderman’s estate also appeal from so much of this decree as failed to deny the relief requested in a petition by one of the daughters, and the daughters cross-appealed from another portion of this decree.

A New York Estate Lawyer said the appeals by the daughters dismissed, without costs. The daughters have abandoned their appeals, their briefs asking only for affirmance of both decrees.

Published on: November 19, 2014

Court Decides Outcome in Will Contest Proceeding

by Stephen Bilkis

Page 727

145 N.Y.S.2d 727

1 Misc.2d 440