Bronx Estate Litigation
When you pass away, if you leave a last will and testament, your estate will go through probate before assets can be distributed to your beneficiaries. If you do not leave a will your estate will go through a similar process referred to as estate administration. Unfortunately, regardless of whether the process is probate or estate administration, it is not always a smooth process. When a dispute involving an estate cannot be resolved, the probate court, called the Surrogate's Court in New York, may become involved resulting in estate litigation. Estate litigation may be initiated by any interested party such as a creditor, a beneficiary, an heir, or any other interested party. Disputes arise over an unpaid debt owed by the decedent, because a beneficiary is unhappy with the amount of property left to him or her, because an heir is unhappy because he or she received nothing, or because someone feels that the executor or estate administrator has mismanaged estate assets. Regardless of the reason estate litigation will inevitably delay the distribution of assets and will cost the estate money. Whether you are a beneficiary, an heir, a fiduciary such as a executor or estate administrator, a creditor, or some other interested party, the best way to understand the complexities involved in resolving disputes related to an estate is to contact an experienced Bronx Estate Litigation Lawyer who will be able to help you navigate the difficult legal issues involved in an estate dispute.
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Estate litigation may result from an interested party questioning whether or not a will was properly executed. In order to effectively execute a will New York requires that specific formalities occur. The will must be signed by the person making the will, known as the testator, in the presence of at least 2 witnesses. If the testator is physically unable to sign the will the law allows another person to sign it in the presence of the testator and at the direction of the testator. NY EPTL § 3-2.1.
Improper Execution. A will contest can be based on an allegation that the will was not properly executed. Before the court admits a will to probate the Surrogate's Court judge will review the will and the circumstances surrounding its execution to determine that the will is genuine and that it was executed according to New York law. If the court is satisfied that the will is valid the court will admit it to probate. However, if someone challenges the execution of the will, the court will not admit the will to probate. One way to ensure that a will survives a challenge that it was not properly executed is to have the attorney who prepared the will be present to observe the will execution ceremony.
In In the Matter of Herman, 289 A.D.2d 239 (2001), Edwin Herman's will was challenged based on an allegation that Herman's signature was forged. However, because the lawyer who drafted the will was present at its execution and testified to that, the court found that the signature was valid and that the will was properly executed. Similarly, in the case of In the Matter of the Estate of Helen Werner, 960 N.Y.S.2d 53 (2011), the will was challenged based on an allegation of a forged signature. In this case an expert witness evaluated the signature and rendered an opinion that the signature was not that of the testator's. However, the court was not persuaded by the expert's testimony since 2 members of the bar witnessed the signature.
Undue Influence. In the case of In the Matter of the Estate of Alibrandi, 104 A.D.3d 1175 (2013) the court noted that a testator would be subject to undue influence if someone with a motive and opportunity acted in a way that resulted in the testator being constrained against his or her own free will and desire. In the case of In the Matter of the Estate of Stafford, 975 N.Y.S.2d 810 (2013), the court found that there was no undue influence in the case where although there might have been motive and opportunity on the part of the decedent's caretaker to exert undue influence, there was no evidence that she actually exerted undue influence.
Undue influence can even take the form of duress involving physical or mental abuse or threats that compel the testator to execute a will that included terms there are favorable to the abuser.
If the court agrees that the will was not properly executed the judge can find that particular provisions are invalid or that the entire will is invalid. If the will is found to be invalid then the decedent's estate will pass to the decedent's heirs based on the laws of intestate succession.
Testamentary Capacity. One of the requirements for making a legally valid will is that the testator must have testamentary capacity. Under New York law this means that you must be an adult-- at least 18 years old. It also means that you must be of "sound mind and memory." NY EPTL § 3-1.1. Being of sound mind and memory means that the testator cannot be suffer from a mental incapacity at the time he or she made the will. Generally the test for the mental requirement of testamentary capacity is whether the testator understands what it means to make a will, has a general idea of what his or her estate is comprised of and its value, and who his beneficiaries are.
Particularly with older people, testamentary capacity is a common basis for challenging a will. Conditions that may cause an interested party to question if the testator had testamentary capacity include Alzheimer's Disease, schizophrenia, or a brain injury. However, merely having a medical condition that may affect your memory or mental capacity does not necessarily mean that you cannot make a will. In some cases those who suffer from such illnesses or injuries have extended periods of lucidity. If the will was made during one of these periods, then the testator had the requisite testamentary capacity. Evidence of testamentary capacity can be gleaned from the testator's medical records, testimony from the witnesses to the execution of the will, and testimony of those who are frequently around the testator.
It is important to note that testamentary capacity is not related to a testator's education, intelligence or level of sophistication.Fiduciary Litigation
Another common reason for estate litigation is where there is a dispute involving a person who is a fiduciary to the estate. A fiduciary is a person who has the authority and the obligation to act for another person under circumstances that require total trust, good faith, and honesty. With respect to an estate a fiduciary could be an executor, estate administrator, trustee, attorney accountant, guardian, conservator, or banker. If an interested party feels that a fiduciary has in some way breached his or her fiduciary duty, estate litigation could result.
Common estate litigation issues that involve fiduciaries include:
- Breach of fiduciary duties
- Accounting irregularities
- Removing a fiduciary
- Contested conservatorships or guardianships
- Creditor claims
- Elder abuse
Personal Liability for the Fiduciary. If a fiduciary of an estate is found to have breached his or her fiduciary duty the probate court may hold that fiduciary personally liable and require the fiduciary to make the estate whole for any losses suffered or compensate the estate for any gain that the liable fiduciary received. For example, in the case of In the Matter of the Accounting of Mahler, 2009-1485/B, (Surrogate’s Court, Kings County, April 14, 2014), Richard Mahler was the executor of the estate of Margaret Van Cortlandt Billmyer. Mahler was sued for breach of fiduciary duty based on selling real estate that was part of the estate to an acquaintance for substantially less than market value. Mahler sold the real estate for $670,000. Three days later the new owner of the property sold it for $1.3 million. Finding that Mahler did indeed breach his fiduciary duty the court held Mahler personally liable and required him to pay the estate $630,000 in damages.
Removing an Administrator. Another option for addressing problems with an estate administrator is to seek to have him or her removed. Oftentimes an interested party and the estate administrator simply do not get along. However, hostility with an heir is not a reason that the Surrogate's Court will remove an estate administrator. In the case of In re Brody, 872 N.Y.S.2d 689 (Sur. Ct. Nassau County 2008), the court stated that unless the hostility interferes with the proper administration of the estate, it cannot, in itself, serve as a basis to remove an estate administrator.
There are specific reasons listed in the Surrogate's Court Procedure that an administrator may be removed:
- Ineligible. If after an executor or administrator has been formally appointed by the Surrogate's Court, information is discovered that shows that the administrator or executor is not eligible to serve in that the role, the Surrogate's Court judge may remove him or her. N.Y. SCP. Law § 711(1)
- Wasted Assets. If the executor or estate administrator is found to have wasted assets, misapplied assets, or made unauthorized investments, he or she may be removed. N.Y. SCP. Law § 711(2). For example, in the case of Estate of Katherine E. Freeman, NYLJ 1202630532311 (Sur. Ct., New York County 2013), an estate administrator was removed when the court discovered that among other things the administrator failed to pay maintenance on the decedent’s cooperative apartment, resulting in it being sold in foreclosure.
- Unfit to Serve. If the executor or administrator is found to be unfit for the job because of dishonesty, drunkenness, carelessness or want of understanding, he or she may be removed. N.Y. SCP. Law § 711(2)
- Disobedience. An executor or an estate administrator must follow the orders of the Surrogate's Court; otherwise, he or she make be removed. N.Y. SCP. Law § 711(3)
- Deceit. An executor or administrator may be removed if the court discovers that he or she received the appointment by lying. N.Y. SCP. Law § 711(2)
- Change of Address. An executor or administrator may lose his or her job if he or she failed to notify the court of a change of address within 30 days of such change. N.Y. SCP. Law § 711(6)
- Removal of Property. A fiduciary of an estate is not permitted to move estate property out of the State of New York without permission from the court. N.Y. SCP. Law § 711(7)
- Irresponsible. A fiduciary must not be irresponsible with the handling of his or her responsibilities due to substance abuse, dishonesty, carelessness, lack of understanding, or any other reason. N.Y. SCP. Law § 711(8)
- Failure to Account. A fiduciary must file an accounting as directed by the court. Failure to do so may result in him or her being removed. N.Y. SCP. Law § 711(12)
In order for a court to take the extreme step of removing a fiduciary the allegation of a breach of fiduciary duty must be more than mere supposition. In In the Matter of the Probate of the Last Will and Testament of Butner, 975 N.Y.S.2d 708 (2013), the decedent's daughter asked the court to remove the executor based on a belief that the executor was transferring estate assets to a business owned by the executor. However, because the daughter brought mere allegations to the court, the judge refused to remove the executor.Impact of Estate Litigation on a Decedent's Estate
The impact of estate litigation on an estate can be significant regardless of whether or not the petitioner is successful. Any type of estate litigation will likely cause a delay in the distribute of an estate's assets. In New York it will typically take a minimum of 9 months to wind up an estate and begin distributing assets. If an estate tax return must be filed the timeline will be extended by at least another 9 months. If estate litigation is added the amount of time before an estate is closed and the assets distributed will be even further extended.
Estate litigation is costly to both the estate and to the person who initiated the estate litigation. The executor or estate administrator would have to hire an attorney to represent the estate in the proceeding. The attorney's fees may have to be paid out of estate assets. As a result, the value of the estate may decrease, unless the estate wins the lawsuit and the opposing side is required to pay attorney's fees.
If the ultimate result of estate litigation is that all or a part of a will is invalidated, some or all of the named beneficiaries will end up not receiving any distribution from the estate. Instead, the assets will be distributed according to New York's laws related to intestate succession.Other Types of Estate Litigation
In addition to disputes over a validity of a will or the administration of assets in an estate, estate litigation can also involve disputes related to a guardianship or conservatorship, or over a power of attorney. For example, a minor or an incapacitated person may become the victim of an unscrupulous fiduciary who mishandles that person's assets or abuses his or her power in some other way that results in a considerable loss of assets. When such events occur and are brought to the attention of the court, the court may have the fiduciary removed and require the fiduciary make the victim's estate whole.
Because of the complexities involved in estate litigation it is important to have an attorney who is experienced representing you. The staff at Stephen Bilkis and Associates is experienced in estate litigation and have worked extensively in the New York Surrogate's Court. We will help you make the process as painless as possible under the circumstances. Contact us at 1-800-NY-NY-LAW (1-800-696-9529) to schedule a free, no obligation consultation regarding your estate plan.