Articles Posted in Estate Administration

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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.

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Generally, when someone passes away, their estate must go through an administration process that starts with submitting the decedent’s will, if any, to the Surrogate’s Court, along what a petition for appointment of the administrator or executor. The law requires that interested parties must be notified that the estate is in the process of being opened, that a will has been filed, that someone is seeking to be appointed administrator of the estate.  Interested parties must be notified so that they can be heard on matters related to the process, including the appointment of the administrator.

In Buie, the decedent died intestate in 2004.  This means that she did not leave a will nominating someone to serve as the executor of her estate.  As a result, based on a statutory order of priority, any interested party has the right to file a petition with the Surrogate’s Court to receive letters of administrator and move forward with the tasks required to settle the decedent’s estate.

The decedent was survived by 5 children.  Twelve years later, in 2016, one of the decedent’s children, Deborah, filed a petition with the court for letters of administration for the decedent’s estate, which included a single-family house in Brooklyn and an adjacent vacant lot.

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he purpose of the estate administration process is to settle the outstanding affairs of a decedent.  This includes ensuring that the debts that the decent left behind and the expenses related to the administration of their estate are paid.  Debts may include household bills, car loans, credit card bills, and taxes. Expenses include those related to attorney fees and other administration fees as well as those related to the funeral and burial of the decedent.

In fact, debts and expenses must be paid by the administrator of the estate before assets are distributed to beneficiaries or heirs.  Because estates do not always have sufficient assets to pay outstanding debt and expenses, New York law sets forth an order of priority for their payment. The expenses that are required to be paid first before any other expenses or debts are funeral and burial expenses.  SCPA § 1811(1).

In Thompson, the decedent died intestate. The court appointed administrator of the estate was her daughter.  She contracted with a funeral home for the funeral and burial of the decedent.   The cost was $12,410.00, but the estate did not have sufficient assets to cover the bill and the bill went unpaid. However, there was a pending wrongful death action that was eventually settled. The total amount of the settlement is unclear, but of the settlement, the court ordered $25,560.13 in escrow with respect to the outstanding funeral bill. While the bill was initially $12,410.00, it had grown to $25,560.13 because of the 24% annual interest assessed for late payment.

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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

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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.

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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.

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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

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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.

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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.

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One of the roles of the administrator of the estate is to bring claims on behalf of the estate.  In this case, the administrator filed a wrongful death claim on behalf of the estate of his deceased minor daughter.  The defendant responded by challenging the administrator’s eligibility to serve as estate administrator.

In New York there are rules related to who can serve as the administrator of an estate.  These rules apply whether the person was nominated in a decedent’s will to serve as the executor or the person petitions the courts to serve as the administrator of an intestate estate.  According to Surrogate’s Court Procedure Act § 707, anyone is eligible to receive letters unless he or she is ineligible.  Among those who are ineligible are felons.

In Passalacqua v. State, the claimant father of the decedent alleges that the decedent died due to the negligence of the defendant.  The claim alleges that the decedent, his 12-year old daughter, was attacked and killed by a parolee who was under the defendant’s supervision and that the defendant was “negligent, wanton, reckless and careless” in that he failed to provide reasonable and proper supervision of the parolee.

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