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Court Decides Case Regarding Constructive Trust

A New York Probate Lawyer said this action to vacate a deed or impress a constructive trust was originally initiated by a man, and was transferred to another court by order. The man, as the estate administrator, requests for a decision without proceeding. A woman however cross moved the motion for a declaration that the transfer was a valid gift.

The estate came from their mother who died leaving a last will which was admitted to probate. Letters testamentary was then issued to the estate administrator. In addition to the two parties, the deceased woman was survived by three other children.

A New York Estate Lawyer said that prior to entering an assisted living facility, the deceased woman resided at her own residences. Later, the deceased woman purportedly transferred her interest in the premises to her daughter and reserved a life estate.

The man as estate administrator then requested a decision without trial on the grounds that the transfer was revocable due to her sister’s retention of a limited power of appointment and, therefore, an invalid gift.

A Staten Island Probate Lawyer said that as a result, the man claims that the premises should be an asset of the deceased woman’s assets and divided among the deceased woman’s five children equally.
The woman’s daughter cross moved the motion for an order denying it and instead declaring that the transfer was a valid gift. She alleges that her mother intended to make a gift of the premises to her to compensate her for losses she had suffered in connection with a failed business venture by her brothers. Her brothers entered into a business venture previously. The start-up funds for that venture were obtained from mortgages taken on two properties owned by the deceased woman. One of the properties was the premises and the other was commercial property.

Nassau County Probate Lawyers said at some point, the business venture failed and the business was closed. The mortgages on the two properties were still outstanding, and foreclosure proceedings were commenced against the deceased woman and the five children as the owners of the property.
At that time, the deceased woman was living in an assisted living facility outside the presence of her daughter. Subsequently, the deceased woman executed the deed.

A lawyer then submitted an affidavit and asserted that the deceased woman expressed concern about the costs of her ongoing medical care to him. The woman also stated that she was concerned about protecting her assets, particularly, the premises. He further stated that he explained that one option was to make a gift of the premises while retaining a life estate. The deceased woman advised the said lawyer that she wanted to gift the premises to her daughter.

At the time the deed was executed, the lawyer again explained the consequences of the transaction and the deceased woman acknowledged that she understood. The special power of appointment language was used by the lawyer as a means of avoiding the payment of gift tax when the deed was recorded.

The other son of the deceased woman has submitted an affidavit wherein he states that it was his understanding that his mother wanted his sister to have the premises to compensate for the financial losses she suffered because of her brothers’ failed business venture.

Based on records, a request for decision without trial is often termed a drastic remedy, used carefully as it is the procedural equivalent of a trial, and should not be granted if there is any doubt as to the existence of a triable issue of fact. Further, the moving party must make a showing of entitlement to summary relief as a matter of law, producing sufficient evidence in admissible form to demonstrate the absence of any material issue of fact.

Moreover, to establish a gift, the donee must establish donative intent, delivery and acceptance by clear and convincing evidence. A donor may make a valid gift of property with the right of enjoyment postponed until after death, as long as her intention is to presently transfer an enforceable interest in that property to the donee.

By its terms the deed conveys the premises to her daughter retaining a life estate with a limited power of appointment of the remainder in the deceased woman in favor of her children. The man maintains that since the transfer was revocable by virtue of the limited power of appointment, the transfer does not constitute a valid gift. The court however disagrees.

Based on records, the man incorrectly concludes that if a transfer is an incomplete gift for gift tax purposes, it does not constitute a valid gift. The primary element of a completed gift for gift tax purpose is the abandonment of dominion and control over the property. A completed gift does not occur if the grantor retains a power of appointment because he has the right to change beneficial enjoyment.

Sources revealed that as to any property, or part thereof or interest therein, of which the donor has so parted with dominion and control as to leave in him no power to change its disposition, whether for his own benefit or for the benefit of another, the gift is complete. But if upon a transfer of property the donor reserves any power over its disposition, the gift may be wholly incomplete, or may be partially complete and partially incomplete, depending upon all the facts in the particular case.

As a result, in every case of a transfer of property subject to a reserved power, the terms of the power must be examined and its scope determined.

The estate administrator confuses the issue of whether a transfer is a valid gift under state law with the issue of whether a transfer is a complete gift for federal gift tax purposes. For that reason, the request for the decision without trial is denied. The transfer does not constitute an invalid gift.
Concerning the cross-motion, the woman daughter’s testimony although admissible to defeat the motion where it would be otherwise barred by the law, is inadmissible in support of her cross-motion.
The estate administrator however opposes the cross-motion for the request on the basis that his sister had a confidential relationship with the deceased woman as her attorney-in-fact under a durable power of attorney which requires her to establish by clear and convincing evidence that the transfer was free of coercion or undue influence. He further claims that the woman has failed to meet her heightened burden of proof. Where the parties to a gift transaction are close family members, the existence of a confidential relationship is a question of fact. Even assuming a confidential relationship between the deceased woman and her daughter, her daughter has met her heightened burden that the transfer was free from any undue influence.

Based on records, the affidavit of the attorney clearly demonstrates that the execution of the deed was not subject to the exertion of any undue influence. Moreover, the testimony shows that the deceased woman clearly intended to transfer the premises to her daughter. With the attorney’s affidavit coupled with the recording of the deed and the presumption of delivery arising there from, the daughter established her entitlement for the decision. Since the estate administrator has failed to raise any issue of fact as to the deceased woman’s capacity, the court ordered to grant the cross-motion.

When you want to execute a last will, you can seek legal guidance from the Nassau County Estate Lawyer or Nassau County Estate Administration Attorney. On the other hand, if you are the one who wanted to probate someone’s last will, you can seek assistance from the Nassau County Probate Lawyer at Stephen Bilkis and Associates.

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