Articles Posted in Estate Administration

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In Abram v. Abram the court was asked to consider whether the Surrogate’s Court of New York County erred in denying an evidentiary hearing on the fitness of an administrator of a decedent’s estate.

Judges have broad discretion in determined whether an administrator or executor is qualified.  Typically courts will not disqualify someone unless there is a significant reason to believe that the estate is at risk.

It is not unusual for those who challenge the fitness of an administrator to do so simply because they want to serve as administrator or because they do not like the administrator for personal reasons that have nothing to do with their fitness to serve as administrator.

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While the case of  In re Estate of Domingo Torres, Sr.  turns on the narrow issue of whether to grant the New York City Department of Social Services (DSS) more time to file objections to the account filed by the personal representative, here we will look at why the DSS wants the Surrogate’s Court to hear its objections.

At the time that Torres passed away, he owed the DSS $87.903.76.  As part of the estate administration process, New York law requires that the personal representative pay debts owed by the decedent out of estate assets before assets are distributed to the decedent’s beneficiaries or heirs.  However, debts can only be paid to the extent there are funds in the estate to do.

As required, the DSS filed a claim against the decedent’s estate for $87.903.76. Even though it appeared as if the claim was valid and timely filed, it was denied simply because the estate did not have the money to pay it.  However, the personal representative filed a lawsuit against the party responsible for Torres’ death and recovered $300,000.  From that money, the DSS expected to be able to recover the money it was owed.

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When someone  passes away due to the negligent actions of another person or entity, a wrongful death action can be filed by their personal representative to seek damages.  Depending on the specifics of the case, if the lawsuit is successful, the amount awarded can be allocated either as a wrongful death award, a personal injury award, or a combination of both.  The manner in which the money is classified determines how it is ultimately distributed.

Money that is allocated as personal injury is awarded to compensate the decedent for the conscious pain and suffering they experienced from the injury or circumstances that resulted in their death.  It includes physical pain, even if suffered for a very short time prior to death.  It also includes fear, shock, and anguish experienced by the decedent as a result of the circumstances that caused their death. Because personal injury money is the decedent’s loss, it is added to their probate estate.  Just like any other asset that is part of a decedent’s probate estate, personal injury money can be used to pay estate debt.  Any money leftover would be distributed to the decedent’s beneficiaries and heirs as required by their will or New York law.

Money that is allocated as wrongful death is awarded to the family of the decedent to compensate for economic losses they will suffer as a result of the loss of the decedent’s financial support.  Because money allocated to wrongful death is to compensate losses suffered by the decedent’s family (distributees), that money goes directly to the appropriate family members and not to the estate.

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In this case, the Appellate Division considered whether assets acquired by a testator’s estate after the death of the testator should be distributed pursuant to the terms of a will or by the laws of intestate succession.

The purpose of a creating a will is to enable the testator to determine who gets their property after they pass away.  Wills can be very general, e.g. leaving all property to one person such as spouse.  Or, they can be very detailed, e.g. leaving specific property such as real estate, jewelry, or cash to different people. The common thread is that the testator’s intent is to leave their property, meaning whatever they have at the time of their death, to other people.

There are instances, however, when the decedent acquires property after their death. Because they had no knowledge of the property prior to their death, and certainly not at the time they made their will, they could not have intended to dispose of that property in their will.

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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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