New York Probate and Estate Administration Lawyer Blog

Published on: May 24, 2017

Petitioner Requests Settlement of Accounts of Estate – Zimmerli’s Estate, In re, 220 N.Y.S.2d 123 (N.Y. Surr. Ct., 1961)

by Stephen Bilkis

The executor of the estates of two decedents asks the court to determine whether the proceeds from an insurance settlement should go to the decedents’ residuary estates or if it should go to beneficiary who was supposed to receive the property that was destroyed.

Husband and wife decedents F. Zimmerli and J. Zimmerli, presumably died simultaneously in a fire in their home on December 13, 1959. They left reciprocal wills which were duly admitted to probate on January 15, 1960. The wills state the real estate that was destroyed in the fire was to go to the Grace Episcopal Church of Lyons, New York. Caverly was named as the executor of the estates of both of the decedents. Caverly filed a petition with the Surrogate’s Court for the Judicial Settlement of his first intermediate account in the two estates. In the petition, Caverly asked the court to determine if the $16,813.20 insurance settlement for the fire loss to the real estate of the decedents should go to the decedents’ residuary estates or to the Grace Episcopal Church.

The language of the wills clearly shows the intention of the testators to specifically devise the destroyed real estate to the Grace Episcopal Church which is plain and obvious. However, the question is whether the rules related to how to handle proceeds of insurance policy means that the proceeds should go to the decedents’ residuary estates.

Published on: May 24, 2017

Court must determine if an executor acted inappropriately in managing estate assets – In re Account by Casaceli, 2010 NY Slip Op 33601 (N.Y. Surr. Ct., 2010)

by Stephen Bilkis

In this case the court had to determine if the executor had engaged in activities that amounted to breaches of his fiduciary duty. An executor is a fiduciary with respect to an estate. This means that the executor must make decisions with respect to estate assets that are only in the best interest of the estate. An executor is not allowed to engage in self-dealing. This means that the executor is not allowed to make transactions involving estate assets that are in his or her interest.

The decedent, E. Casaceli, died on May 1, 2004, leaving a will which was admitted to probate on July 7, 2004. The decedent was survived by his four children, Gr. Casaceli, Ga. Casaceli, S. Casaceli, P. Smith. Gr. Casaceli was appointed executor. The will provided that each of the children except for Ga. Casaceli receive cash bequests of $45,000.00. The residuary estate was to be divided equally among the four children.

After Gr. Casaceli filed a final accounting, Ga. Casaceli filed objections to the accounting asserting that Gr. Casaceli made a number of questionable or unaccounted for transactions related to estate assets. Ga. Casaceli asserted that Gr. Casaceli took a $10,000 advance payment of commissions without an order of the court. He seeks a return of that money, plus interest. Ga. Casaceli also asserts that Gr. Casaceli made distributions to his company in the amounts of $100,000 and $20,000. While he repaid the $20,000, he did not pay interest, and thus, engaged in self-dealing by making an interest-free loan to his company. Further, Ga. Casaceli objects to receiving $66,285.00 less of his distributive share that Gr. Casaceli instead paid to himself.

Published on: May 14, 2017

Court Appoints Temporary Administrators – Will of Duke, 632 N.Y.S.2d 532 (N.Y. App. Div., 1995)

by Stephen Bilkis

In this case the court had to determine whether it was appropriate to remove the co-executors of an estate and appoint temporary administrators. Typically, a testator will name in his or her last will and testament the person or persons that he or she wants to serve as his or her executor. However, before the nominated executor will have the legal authority to assume the duties of the position, the Surrogate’s Court must approve the nomination and issue letters testamentary. The court will only issue letters to someone who is qualified. Under Surrogate’s Court Procedure Act § 711, upon petition from an interested party, the Surrogate’s Court will suspend, modify, or revoke the authority of the executor if there is evidence that the executor was not qualified for the job, or is no longer qualified.

The decedent, Duke, left an estate valued at $1.2 billion. She names as co-executors her former butler, Laffety and U.S. Trust Company. The Surrogate’s Court was asked to remove the co-executors because they were unfit, because of violation of fiduciary duty, and because of conflicts of interest. The Surrogate’s Court did so and the former co-executors appealed. The Appellate Division affirmed the decision of the Surrogate’s Court.

The Appellate Division concluded that the Surrogate’s Court properly concluded that the Lafferty wasted estate assets by paying himself a significant salary and lavish benefits, even though he was earning a substantial commission for serving as co-executor. There was evidence that he was living at the decedent’s estate and using the property as if it was his own. The court concluded that these activities by Lafferty amounted to self-dealing.

Published on: May 14, 2017

Court Discusses Sufficiency of Evidence

by Stephen Bilkis

This is an estate case where Defendant moves this court to inspect the Grand Jury minutes and to dismiss various counts of an Indictment on several grounds including legal insufficiency. Defendant also claims that certain counts are duplicitous, provide insufficient notice, and are too vague. Defendant moves to dismiss three counts of Criminal Contempt in the Second Degree on the grounds that he had not been served with any order of protection in the days of the alleged violations.

The Defendant was arrested on July 21, 1997 and charged in a felony complaint with several counts each of Criminal Contempt in the Second Degree, Aggravated Harassment in the Second Degree, Harassment in the Second Degree and Attempted Coercion in the Second Degree. At the time of his arraignment on the felony complaint, the defendant did not file notice of his intention to testify before the Grand Jury. Defendant was subsequently indicted by the Grand Jury for Grand Larceny in the Second Degree, Grand Larceny in the Fourth Degree, Aggravated Harassment (24 counts), Criminal Contempt in the Second Degree (3 counts), Harassment in the Second Degree (2 counts), Attempted Coercion in the First Degree, Attempted Coercion in the Second Degree, and Menacing in the Second Degree.

According to the Grand Jury testimony, these charges arose out of numerous incidents occurring between August 1996 and July 1997. Beginning in August 1996, the defendant, 44, was living with his 77-year-old mother, the complainant in this case. He lived with her until June 26, 1997. Defendant’s mother gave the defendant an allowance on a weekly basis while he was living with her. This allowance was given reluctantly, and allegedly coerced through threats and physical intimidation by the defendant.

Published on: May 7, 2017

Petitioner Seeks to Modify Restrictions on an Endowment Fund

by Stephen Bilkis

This is a petition to modify restrictions on an endowment fund, pursuant to section 8-1.1 of the Estates, Powers and Trusts Law or, in the alternative, section 522 of the Not-for-Profit Corporation Law. Petitioners, trustees of a university, seek an order authorizing the subdivision of an endowment fund created by a testamentary bequest to the College of Medicine. The Attorney General of the State of New York (on behalf of ultimate charitable beneficiaries) has reviewed the current audit of the fund and raises no objection to the relief requested in the petition.

The decedent died on March 9, 1985. Her last will and testament was admitted to probate by a decree of this court dated April 5, 1985. Decedent was a graduate of the University, a member of the Board of Trustees and a benefactor of the University. In September 1986, the University received $1,500,000 from the estate of the deceased.

The University states that the income from the fund exceeds the amount required to fund a chair in clinical medicine. Specifically, the income exceeds the amount that can be utilized under the University’s guidelines. The guidelines for endowment funds provide payment of a salary to the professor appointed to the professorship and expenses including laboratory space and research services. Beginning in 2007, the University has required $2.5 million to fund an endowment for a full professorship and $1.5 million to fund an endowed associate or an assistant professorship. The currently expendable income from the Uris professorship generates annual expendable income of $242,284. A current endowment of $2.5 million generates expendable income of $107,500.

Published on: May 7, 2017

Case Raises Issue of an Unborn Contingent Remaindermen

by Stephen Bilkis

This is an estate case where the proceeding raises an issue of virtual representation of unborn contingent remaindermen. The purpose of the virtual representation statute (SCPA 315) is to dispense with the necessity of service of process on necessary or proper parties.

Testator was survived by his widow and one son. The son is unmarried. His unborn children are contingent remaindermen of two trusts.The first is the usual marital deduction A trust with power in the widow to appoint the principal. In default of the exercise of such power, the son is the remainderman. If he should predecease his mother, his unborn children are the contingent remaindermen. The second is a B trust. The widow and son share the income. Upon the death of the widow, the son receives the principal if then living; and if not, then his as yet unborn children are the remaindermen.

The interests of the unborn contingent remaindermen which may be adversely affected arises in this as in most cases not from the nature of the proceedings or of the trusts but from the predictable impact of the decree. It suffices simply to note that the sole assets of both trusts are shares of stock in a family corporation which represent a controlling interest in the hands of the trustee.

Published on: April 30, 2017

Petitioner Seeks to Reform and Construe Will – In the Matter of Rappaport, 21 Misc.3d 919 (N.Y. Surr. Ct., 2008)

by Stephen Bilkis

In this case the Surrogate’s Court was asked to reform and construe a will. Reformation of a will involves changing the language of a will to cure a mistake so that the will is consistent with the testator’s intent.

Decedent Rappaport died on August 31, 2006. She was survived by four adult children, including petitioner I. Rappaport, and a disabled daughter, S. Rappaport. The will was admitted to probate and all of decedent’s children except S. Rappaport, were appointed as coexecutors. J. Rappaport died in December 2007. The court has appointed Bartol as guardian ad litem to represent S. Rappaport’s interests.

The will included a provision that created a trust for the benefit of S. Rappaport. The decedent bequeathed assets to the trust and stated that trustees are named. Income and principal from the trust fund were to be paid to S. Rappaport in installments as needed for S. Rappaport’s health, support, and maintenance. Upon S. Rappaport’s death, the principal from the trust was to be paid to the other children.

Published on: April 23, 2017

Court Discusses Annuity Contract

by Stephen Bilkis

In 1970 a group annuity contract plan was entered into by defendant Company and a hospital as contractholder. On April 25, 1972 the company issued its certificate to a doctor, which named him as a participant in that group annuity plan.

The certificate had originally been issued on April 4, 1972 with the same designated beneficiaries, but the name was misspelled. In a handwritten note, a request was made to correct the spelling and as a result company issued the corrected certificate dated April 25, 1972, referred to supra.

The decedent, who was the first wife and the mother of their two sons, died on August 23, 1973. Approximately one year after her death the doctor remarried. His new wife was the plaintiff in this action. The doctor died in February, 1979 and his will, executed March 3, 1976, was admitted to probate in March, 1979.

Published on: April 23, 2017

Court Hears Petition to Terminate Trust

by Stephen Bilkis

This is a petition to terminate a testamentary trust pursuant to EPTL 7-1.19. The trust was established under the will of a decedent, which was admitted to probate on January 23, 2004. Under her will, the testator left her residuary estate, consisting of her residence located at 2531 Ocean Avenue, Brooklyn, New York, in trust. The trustee was authorized to distribute the income to her daughters for their “maintenance, education, advancement, health, comfort or benefit, including but not limited to the need for a suitable residence of the two daughters.

Upon the death of the survivor of the two daughters, the trust terminates and the principal is distributed to the testator’s son, or, if he does not survive her sisters, to his children living at the testator’s death.

On February 18, 2005, the daughter entered into a contract to sell the Ocean Avenue property for $990,000. In April, 2005, the siblings entered into a stipulation allowing the sister to borrow $175,000, secured by a mortgage on the property, to enable her to buy another home. The mortgage was to be satisfied upon sale of the property and the amount used to satisfy the mortgage charged to the daughter’s share of the sales proceeds.

Published on: April 16, 2017

Court Hears Proceeding to Construe a Will

by Stephen Bilkis

This is a proceeding to construe the last will and testament of a testatrix who died on April 18, 2010, survived by five children. Her will, dated September 1, 2006 (the “Will”), was admitted to probate on July 2, 2010 and letters testamentary issued to petitioner, one of her children. Article SECOND of the Will established a credit shelter trust for her husband, with remainder to her children. Article THREE left the “rest, residue and remainder” of her estate to her husband outright. Her husband predeceased her and she provided in Article FOURTH that if her husband predeceased her, she left “all the rest, residue and remainder of my estate, real, personal and mixed and wheresoever situated”

The estate is sufficiently large to generate a New York State estate tax. Article FIFTH of the will provides that “All estate, inheritance, transfer, succession or other similar taxes shall be payable out of the residuary of my estate”. The executor asks that the Court construe the gift to real property to the devisee in Article FOURTH(A) as a preresiduary gift and the remainder clause of Article FOURTH(B) as the residuary estate. The executor brings this construction proceeding, since he claims that not all of the residuary beneficiaries agree with his interpretation.

In the Will in question, Article FIFTH directs that the payment of estate taxes be paid from the residuary estate. The problem is that the Will contains two residuary clauses. The first is found in the preamble to Article FOURTH, which disposes of the “all rest, residue and remainder of my estate, real , personal and mixed and wheresoever situated” of the testator’s estate if the testator’s husband predeceased the testator. The second is Article FOURTH(B), which purports to dispose of the “rest and remainder” of the testator’s estate after the devise of real property in Article FOURTH(A).