New York Probate and Estate Administration Lawyer Blog
This action stems from plaintiff’s attempt to purchase certain real property, located at Bronx County (“subject property”), in August 2005, from four members of a family.
New York Probate Lawyers said one of the members, a lady, died testate in February 1986. Under the terms of her Will, her husband had a life interest in certain properties, but not the subject property, only access to its garage. Article Sixth of the Last Will and Testament provided that their son had a life income interest in the subject property which was to be held in Trust by Trustees. The son’s daughters were allowed to occupy the first floor and second floor, respectively, and, upon the son’s death, the subject property was to be transferred jointly to the daughters, decedent’s granddaughters. The Will also provided that, upon the husband’s death, the son would substitute as Co-Executor and Co-Trustee in his place. The other Co-Executor and Co-Trustee attorney was never a party to the sale of the subject property. Further, the husband and the lawyer never obtained Letters of Co-Trusteeship for the Article Sixth Trust, and only the husband took action as an unauthorized Trustee with regards to the subject property.
A Bronx Conty Probate attorney said that Probate Petition and Notice of Probate were filed with the Surrogate’s Court in April 1988, naming the husband and the lawyer as Co-Executors and Co-Trustees. It also requested that Letters of Testamentary be issued to them and that Letters of Trusteeship be issued to them under the Article Third and to the lawyer under the Article Eleventh. Thereafter, the Surrogate’s Court issued Letters of Co-Testamentary and Co-Trusteeship to the Petitioners. However, the Letters of Trusteeship were limited to Articles Third and Eleventh Trusts. The Surrogate’s Court provided a letter to the GAL stating that no application for Letters of Trusteeship was issued under Article Sixth of the Will.
A New York Will Lawyer said that although there was no Trust was established and funded in accordance with Article Sixth of the Will with regards to the subject property, a contract for sale of said property was executed, between plaintiff and allegedly the four family members. Although a closing date on the sale of the property was scheduled, and attended by signatories on the contract, the closing did not occur, because it was alleged that one of the daughters did not have proper identification.
Westchester County Probate Lawyers said the plaintiff filed a Notice of Pendency on the subject property after several failed attempts to close on it. Thereafter, he commenced this lawsuit in November 2005, seeking, among other things, specific performance of the contract for sale of the subject property. The contract provided, in relevant parts, that in the event that the seller was unable to remove any impediment to the conveyance of title, the contract would be cancelled and the downpayment returned to the seller. Therefore, the remedy available under the terms of the contract was the return of the $25,000.00 down payment to plaintiff, and that Sellers shall pay the net cost for the title examination not to exceed $250.00.
Suffolk County Probate Lawyers said the husband died in February 2007, and no successor Letters of Executor and/or Trustee were issued to anyone. Thereafter, the son conveyed the subject property to himself and one of the daughters, by an Executor’s Deed, for no consideration. The Deed was filed with New York City Department of Finance, Office of the City Register. Also, the intervener gave the daughters a mortgage on the property for $300,000.00, and, on the same day, filed it with New York City Department of Finance Office of the City Register. Under the terms of the promissory note, which named the intervener as the Nominee, the payments would commence in November 2008, and end on March 2009, with an interest rate of 14% pre annum, and a default rate of 16%. The title insurance company was Stewart Title Insurance Company. A Personal Guarantor for the $300,000.00 loan was co-defendant, whom the daughter claims gave her and the son, $90,000.00 (the total amount then received from both loans), and then demanded that a substantial portion of that loan be wire transferred to him for repairs to the property, which were never done.
In April 2010, the intervener had filed a motion seeking to amend the caption to include him as a party defendant, to permit him to intervene and for a declaratory judgment that he has a beneficial ownership interest in the subject premises. At the time of filing his motion to intervene had commenced a foreclosure proceeding against the daughters for defaulting on the mortgages. In an order dated June 28, 2010, Katz’s motion to intervene was granted on default.
During the course of his investigation, the daughter was interviewed who told him that she and her father received $90,000.00 from co-defendant, whom she believed was involved with intervener.
The allegations of the various parties with regards to the subject property is infused with misrepresentations, fraud, undue influence, and conflict of interest, between the family and intervener, an attorney.
The Court has general original jurisdiction in law and equity and has concurrent jurisdiction with other courts, such as Surrogate Court, and is only limited in matters of exclusive jurisdiction conferred on the federal courts or in actions for money damages against the state which can only be heard in the Court of Claims.
Since the Estate of the deceased had been probated and an accounting was filed, the Co-Executors and Co-Trustees are deceased, and the only remaining issues stemming from the Estate is the Testamentary Trust of Article Sixth, which involves disputes amongst the living, the beneficiaries of the Trust situs, this Court will extend its jurisdiction over the testamentary Trust and the beneficiaries of the Trust.
Surrogate’s Court Procedure Act § 1502(1) (“Appointment of trustee”) allows this Court to appoint a trustee or successors, or co-trustees, when no trustee is able to act or one of the trustees is unable to act and a successor trustees is necessary to execute the trust or execute any power created by a will or lifetime trust. Here, both the nominated Co-Trustees are deceased. The nominated successor Trustee never obtained Letters of Trusteeship, and attempted to terminate the Trust without any Court Order or Decree, (based upon his action of executing the Executor’s Deed, loan documents placing two mortgages on the property, and executing the Quitclaim Deed) in contravention of the Trust; he is therefore disqualified to serve as a Trustee.
The Court finds that a Trustee is needed, and hereby appoints the GAL as the Trustee; and notes that all interested parties agreed to his appointment, by their Stipulation. The parties agreed to his appointment as long as this Court determined that the mortgages and deeds are null and void, and that the Trustee should be appointed to fulfill the purpose of the Will and the Trust created for the subject property.
Estates, Powers and Trusts Law (“EPTL”) § 7-9 provides the general rule that a trust can only be terminated upon the consent of all interested persons only during the grantor’s lifetime and with her consent. EPTL 7-1.19 “Application for termination of uneconomical trust”, passed in 2004, applies to trusts, whenever created, and provides that any trustee or beneficiary may make an application, upon notice as the court directs, to terminate the trust, before the Surrogate’s Court having jurisdiction over the trust. The court may terminate the trust where the continuation of the trust is economically impracticable, the express terms of the disposing instrument do not prohibit its early termination, and such termination would not defeat the specified purpose of the trust and would be in the best interests of the beneficiaries. EPTL 7-1.19 is a narrow exception to general rule pursuant to EPTL § 7-9 that a trust is indestructible.
EPTL § 7-2.4 “Act of trustee in contravention of trust” makes voidable any sale, conveyance, or other action by the trustee that is in contravention of the trust.
Based upon the inspection and appraisal reports obtained by the GAL, it appears that it is not economical to expend money to administer the Trust, since the situs of the Trust, the property, has been abandoned for years, its value has significantly depreciated and no monies exist to do the needed repairs and renovations; and it is encumbered by a tax lien.
Likewise, the contract for the sale of the house to plaintiff cannot be enforced as any such sale is voidable, pursuant to EPTL § 7-2.4, because the purported Sellers did not have the power to sell the property, which was bequeathed pursuant to the testamentary Trust of Article Sixth of the Will. None of the family members were issued Letters of Trusteeship, which would have given them the authority to create, fund, convey title to the property, and terminate the Trust. It is noted that EPTL § 7-3.2 provides relief in certain circumstances to bona fide purchasers who do not have notice of a trust.
EPTL § 7-2.4 provides, in sum and substance, that if a trust is expressed in an instrument, such as a Will, creating the estate of the trustee, then every sale, conveyance or other act of the trustee in contravention of the trust, except as authorized by that Article and by any other provision of the law, is void. Herein, the Article Sixth Trust under decedent’s Will created a irrevocable Trust, and, although there are limited exceptions to the termination of an irrevocable trust, none of those exceptions apply herein.
Because the Will created a Trust of the subject property, EPTL § 7-1.19 is controlling as to when the Trust can be terminated. None of the requirements of EPTL § 7-1.19 were met by the family in this case: letters of trusteeship were never sought and issued, a trust was never created, and no application to terminate the Trust was made to the Court, and no order or decree terminating the Trust was issued.
Therefore, the Court finds that no authority existed for any of the family to have engaged in the transactions regarding the property. Their attempts to deed, sell, and mortgage the real property are a nullity. Consequently, the lispendens is cancelled; and the mortgage foreclosure action is dismissed.
Accordingly, the branch of plaintiff’s Order to Show Cause seeking to renew is granted. The branch seeking specific performance on the contract of sale is denied; and the lispendens is cancelled. However, the relief granted is that the subject mortgages and accompanying promissory notes, the Executor’s Deed, and the Quitclaim Deed, are deemed null and void; and that plaintiff is entitled to reasonable attorneys’ fees, costs, and sanctions, as set forth more fully herein. Further, this Court grants dismissal of the mortgage foreclosure action. The GAL is appointed as Trustee of the testamentary Trust under Article Sixth of the Will.
Here in Stephen Bilkis and associates, we have Bronx County Probate attorneys who will cater your needs in probate of a will of a testator. We will help you implement and make the provisions thereof effective. For proper distribution of the estate of a deceased, we also have Bronx Estate lawyers, who will inform you the fundamentals of the estate in so far as the properties which can be subject of succession and its proper distribution. For more inquiries, don’t hesitate to contact us now.