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Latham Standard Must Be Applied in Determining Eligibility To Serve as Fiduciary Under SCPA § 707, In the Matter of Walsh, 2007 NY Slip Op 51353(U) (N.Y. Sup. Ct. 7/10/2007)


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.

The father executed 2 wills:  a 1997 will and a 2000 will.  The sister had the original of the 1997 and a copy of the 2000 will.  She believed that the brother had the original of the 2000 will and was withholding it.  When the brother petitioned the court for letters of administration, the sister objected, claiming that the brother had the original of the 2000 will and was withholding it.  In response, the brother produced the 2000 will and  filed a petition seeking probate of the original 2000 will and issuance to him of letters of Administration c.t.a. to bring a turnover proceeding requiring the sister to turnover estate property.  The sister then objected to the issuance of letters to the brother.

Interestingly, the sister did not object to probating the will and she waived her right to serve as executor of the estate even though her father had nominated her in his will. She appeared to only want to prevent her brother from serving as administrator.  She preferred that the Surrogate’s Court appoint a public administrator.  Her rationale was that the brother should be disqualified under Surrogate’s Court Procedure Act § 707(1)(e) by reason of dishonesty.  The sister contended that the brother demonstrated that he was dishonest because he initially did not offer the original of the 2000 will for probate, even though he admitted that he had it. The sister argued that the reasons he initially did not submit it to probate was because it was to his financial advantage to bring an administration proceeding.  In other words, the brother wanted to be the administrator, but the 2000 will named the sister executor.

Surrogate’s Court Procedure Act § 707(1)(e) provides that a person would be ineligible to serve as a fiduciary such as an executor or administrator if he or she is dishonest.  While the statute does not define “dishonesty,” the court set a standard in Matter of Latham’s Will (145 App Div 849).  To be ineligible to serve as a fiduciary of an estate, the person must be shown to be dishonest in money matters such that it is reasonable to have concern about whether estate assets would be safe.  Further, the courts have concluded that the dishonesty alleged must be proved and not simply inferred, and it must be shown that the dishonest conduct is ingrained into the petitioner’s character such that it would be risky to entrust the person with estate funds.

While the sister in Walsh believed that her brother was so dishonest that the funds of the decedent’s estate would not be safe if he was appointed administrator, she did not have the type of proof required by Latham and its progeny.  All that the sister offered was an allegation that the brother failed to offer for probate a will which he had.  The court concluded that this was not enough to disqualify the brother on the grounds of dishonesty.


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