New York Probate and Estate Administration Lawyer Blog
A New York Probate Lawyer said, in a probate proceeding in which the executor petitioned to determine the validity of a deed executed by the decedent LH, the appeal is from an order of the Surrogate’s Court, Kings County, dated May 11, 2007, which granted the petition to the extent of deeming the deed to be valid.
According to a Kings County Probate Attorney, on October 16, 2000 the late Mrs. LH (hereinafter the decedent) executed a will dividing her residuary estate between her son Mr. G, her daughter Ms. RB, and seven of her grandchildren. At the time she executed her will, the decedent was the owner of real property located at XX 56th Street in Brooklyn. Almost one year later, on October 4, 2001, Mr. G executed articles of organization to form ABC Realty Co. LLC (hereinafter the LLC) for the purpose of owning, operating, and managing the real property. On the same day, G and S also signed an operating agreement, which provided that they were to be the sole members of the LLC.
A New York Estate Lawyer said that on November 2, 2001 the decedent executed a deed transferring ownership of the real property to the LLC. However, the LLC’s articles of organization were not filed with the Department of State until November 16, 2001, two weeks after the conveyance. Thus, it is undisputed that the property was purportedly transferred to the LLC before the LLC came into legal existence.
A Westchester County Probate Lawyer said that according to a Kings County Probate Lawyer, following the decedent’s death, a dispute arose among G, S, and the seven grandchildren over whether the deed transferring the real property to the LLC prior to its legal formation was valid. G, in his capacity as executor of the decedent’s estate, thereafter filed a petition asking the Surrogate’s Court to make a legal determination as to the validity of the deed and its transfer. Based upon the undisputed facts set forth in the petition, the Surrogate’s Court concluded that the deed was valid because the LLC was a de facto entity on the date the conveyance was made. We disagree.
A Suffolk County Probate Lawyers explained that, as a general rule, a purported entity which is not yet in legal existence cannot take title to real property. However, New York has recognized that an unincorporated entity can take title or acquire rights by contract if it is a de facto corporation, and we agree with the Surrogate’s finding that the de facto corporation doctrine is equally applicable to limited liability companies. However, to establish that an entity is a de facto corporation or limited liability company, there must be a showing that a colorable attempt was made to comply with the statutes governing incorporation or organization prior to the purported acceptance of the deed.
Here, while it is undisputed that G executed the LLC’s articles of organization on October 4, 2001, there is no evidence that an attempt to file the articles of organization was made prior to the execution of the deed on November 2, 2001. In the absence of a colorable attempt to comply with the statute governing the organization of limited liability companies by filing, we cannot find that the LLC was a de facto entity capable of taking title on the date the deed was executed. Accordingly, the decedent’s purported conveyance of the real property was void. Ordered that the order is reversed, on the law, with costs, the petition is denied, and the deed is deemed invalid.
If you have same issue as the case at bar where a conveyance of a real property subject of a will is being litigated, call the Kings County Estate Lawyers of Stephen Bilkis & Associates to help you with your legal remedies.
The Stephen Bilkis has offices within the convenient place of metropolitan New York. You can visit us personally or call us at our toll free number for your inquiries regarding the probate of will and our Kings County Estate Attorneys are always ready to give you answers.