Articles Posted in Probate & Estate Litigation

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In the Matter of Qyra, the Surrogate’s Court considered an issue related to the allocation of the money award in a wrongful death lawsuit.  On February 25, 2010, while walking in Central Park, Elmaz Qyra was struck by a tree branch and died. The administrator (personal representative) of his estate filed a lawsuit to recover damages and was awarded a $3,000,000 settlement.  The administrator petitioned the Surrogate’s Court to issue a decree allocating the entire settlement to wrongful death.  The objectant argued that a portion should be allocated to personal injury.

When someone dies as a result of negligence, the personal representative of the decedent’s estate can bring a lawsuit to recover losses suffered by the decedent as well as losses suffered by the decedent’s family. If the lawsuit is successful and money is awarded, the Surrogate’s Court must determine how to allocate the money- to personal injury, to wrongful death, or a combination of both.  The manner of allocation determines to whom the money is distributed.

Sums that are allocated to personal injury compensate the injured party—the decedent—for the conscious pain and suffering they suffered because of the negligence. Since the money awarded for personal injury belongs to the decedent, it is considered probate property and is  added to their probate estate. Sums that are allocated to wrongful death compensate the decedent’s next of kin for the losses they suffered because of the negligence.  That money is distributed directly to the next of kin. It is never a part of the decedent’s estate.

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In a case where there is an objection to the issuance of letters, the court considered whether an agreement between two spouses who were in the middle of a divorce abated upon the death of one of the spouses.  

Background

The decedent and Asha were married. However, at the time of the decedent’s death, he and Asha were in the middle of a divorce.  The divorce was never finalized.  As part of the divorce process, the couple entered into a written agreement. The terms of the agreement included that 

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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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In Rotwein v. Murray, the District Court reviewed a case related to claim filed against an estate of a decedent for the payment of medical bills. Under EPTL, creditors have the right to file claims against the personal representative of an estate to seek payment of debt. EPTL § 11–3.1 

Background

The decedent was a patient of the plaintiff who was a podiatrist. The decedent left an outstanding debt to the plaintiff of $12, 470.45. The plaintiff unsuccessfully demanded payment form the decedent’s widow. He then filed a claim against the decedent’s widow in her capacity as executor of the decedent’s estate. In the that lawsuit, the claim was for a lesser amount- $5,000. Although the defendant did not respond to the plaintiff’s attempt at service, the court determined that she had sufficient notice of the proceeding. However, because the defendant failed to appear, the court determined that an inquest was the appropriate way to proceed. An inquest is a hearing for the purpose of determining the amount of damages due on a claim. 

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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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On May 21, 2017, at age 86, decedent E. Lowell Dorris passed away testate.  He was survived by 4 nieces and a nephew.  However, in his will, he named Luis Freddy Molano as his sole beneficiary. The value of the estate was around $350,000. The decedent’s four nieces initiated a will contest, alleging undue influence.  Benjamin Robinson, the executor and also the attorney who drafted the will, requested that the court dismiss the objection of the nieces.

A court will not allow a will that was made under undue influence to be probated.  Thus, if the nieces prevailed and the will was found to be invalid, the court would either probate a prior valid will or the court would declare the decedent to be intestate.  If the decedent is intestate and the nieces are the decedent’s intestate heirs, the nieces would share in the decedent’s estate.

Undue influence means that the testator drafted a will because someone illegally influenced them to do so.  In other words, the terms of the will do not reflect the wishes of the testator, but the wishes of the influencer.  The following circumstances tend to show the existence of undue influence:

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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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In this case, the Supreme Court of New York considered whether a joint bank account is estate property.  It is commonly believed that with a joint bank account there is always the right of survivorship.  This would mean that when one of the joint owners passes away, the proceeds of a joint bank account bypasses probate and automatically goes to the remaining joint owner.  Under New York law, this is not the case.

In In re Najjar, the decedent and the respondent were joint owners of 4 bank accounts.  The petitioner initiated estate litigation because she felt that money in the bank accounts was the property of the decedent alone and, upon her death, became the property of the decedent’ estate.  The petition sought a declaration that the money in the joint bank accounts property belonged to the estate. Further, because the petition was also a co-executor of the decedent’s estate, the petitioner accused the respondent of unjust enrichment and breach of fiduciary duty. In response, the respondent sought summary judgment declaring that as the joint owner of the accounts, she was entitled to all of the money.

Under New York law, upon the death of one of the owners, ownership of the joint bank account does not automatically remain with the surviving owner. New York banking law states that a joint bank account creates a joint tenancy with right of survivorship only when the signature card for the account indicates the parties intended the right of survivorship to apply. Banking Law § 675 (a).  In Najjar, the signature  card did not have the right of survivorship designation.  Thus, the respondent was not able to establish that under Banking Law § 675 there existed a statutory presumption of the survivorship.

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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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