Bronx Probate 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. Unfortunately, probate is not always a smooth process. When a dispute involving an estate cannot be resolved the New York Surrogate's Court may become involved resulting in probate litigation. Probate litigation may be initiated by any interested party such as a creditor, a beneficiary, or an heir. Probate litigation may be rooted in a dispute that someone had with you that remained unresolved before you passed away. Sometimes a beneficiary may be unhappy with what he or she received compared what other relatives received, or a disinherited heir may be upset that a non-relative received a valuable gift. If someone believes that the executor is in some way mismanaging the estate's assets, probate litigation is likely. Regardless of the reason for probation litigation such a dispute will inevitably delay the distribution of assets and will cost the estate money. Whether you are a beneficiary, an heir, an executor, a creditor, or some other interested party, the best way to understand the complexities involved in resolving disputes that arise during probate is to contact an experienced Bronx Probate Litigation Lawyer who will be able to help you navigate the difficult legal issues involved in an estate dispute.
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Probate litigation may result from an beneficiary or an heir 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. If a will contains unexpected provisions such as leaving a large sum to a non-relative or leaving grossly unequal shares to relatives, the unhappy beneficiary or heir may question whether or not the will is valid. This is particularly true if there was a prior will that was more favorable to the unhappy beneficiary.
Improper Execution. A will contest can be based on an allegation that the will was not properly executed. Before a will can be admitted to probate the Surrogate's Court judge will review it to determine if it was executed according to New York law. In general, for a will to be valid in New York it must have been signed at the end by the testator in the presence of 2 witnesses. If the will shows that, then the Surrogate's Court judge will likely admit it to probate without requiring witness testimony. However, if an interested party objects to the will or if there appears to be irregularities, then the judge will not admit the will to probate. Instead, a will contest will proceed, requiring the judge it hear testimony from the witnesses and a review of other evidence. Strong evidence that a will was executed properly and is valid is testimony from a member of the bar who was present at the will's execution.
For example, in the case of In the Matter of Herman, 289 A.D.2d 239 (2001), there was an allegation that Edwin Herman signature was forged. The Surrogate's Court just was not convinced by the allegation largely due to the fact that the lawyer who drafted the will was present at its execution and testified to that. In a similar dispute there was evidence from a handwriting expert that a will's signature was not that of the testator. The judge found that the will was valid as he gave greater weight to the testimony of 2 members of the bar who witnessed the signature. In the Matter of the Estate of Helen Werner, 960 N.Y.S.2d 53 (2011)
Undue Influence. 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. It is not enough for someone to have the motive and the opportunity exert undue influence. The person must have actually exerted the undue influence. For example, 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 where the decedent's caretaker arguably had motive and opportunity because there was no evidence that she actually exerted undue influence.
A finding of undue influence can mean that a particular bequest to the person who exerted the undue influence would be voided, or it could mean that the entire will is invalidated. 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. This means that people who are at least 18 years old can make wills. In addition, the testator must be of "sound mind and memory." NY EPTL § 3-1.1. Being of sound mind and memory means that the testator cannot have 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 understand the extent and value of his or her property, whether the testator understands who the people are who are his or her natural beneficiaries, and whether the testator understands the property dispositions he is making in the will.
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 or some other type of dementia, schizophrenia, or a traumatic 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 clarity. If the will was made during one of these periods then the testator had the necessary testamentary capacity. Evidence of testamentary capacity can be gleaned from the testator's medical records, testimony from the testator's physician, testimony from the witnesses to the execution of the will, and testimony of those who were frequently around the testator. Testamentary capacity is not related to a testator's education, intelligence or level of sophistication.Fiduciary Litigation
Unfortunately, there are occasions when a fiduciary to an estate does fails to properly fulfill his or her duties and as a result damages the estate or enriches him or herself. 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 the executor, trustee, attorney, accountant, guardian, conservator, or banker. If a beneficiary or other interested party feels that a fiduciary has in some way breached his or her fiduciary duty, probate litigation could result.
Common probate litigation issues that involve fiduciaries include:
- Mismanagement of estate funds
- Accounting irregularities
- Removing a fiduciary
- Contested conservatorships or guardianships
- Creditor claims
- Elder abuse
Personal Liability for the Fiduciary. If a fiduciary is found to have breached his or her fiduciary duty the Surrogate's 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 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 an estate. Mahler was sued for breach of fiduciary duty based on selling estate real estate 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. An option for addressing problems with an executor is to seek to have him or her removed. Oftentimes an interested party and the executor simply do not see eye to eye. There are specific reasons listed in the Surrogate's Court Procedure that an estate administrator may be removed:
- Ineligible. If after an executor has been formally appointed by the Surrogate's Court, information is discovered that shows that the 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 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 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 he failed to pay maintenance on the decedent’s cooperative apartment, resulting in it being sold in foreclosure.
- Unfit to Serve. If the executor 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 must follow the orders of the Surrogate's Court; otherwise, he or she may be removed. N.Y. SCP. LAW § 711(3)
- Deceit. An executor 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 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. An executor 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. An executor 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 an executor 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 unsubstantiated allegations to the court, the judge refused to remove the executor.
However, hostility with a beneficiary is not a reason that the Surrogate's Court will remove an executor. 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.Impact of Probate Litigation on a Decedent's Estate
The impact of probate litigation on an estate can be significant regardless of whether or not the petitioner is successful. Any type of probate litigation will likely cause a delay in the distribution 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 probate litigation is added the amount of time before an estate is closed and the assets distributed will be even further extended. It is not unheard of for an estate to still be in probate after 3 years.
Probate litigation is costly to both the estate and to the person who initiated the litigation. The executor 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. If the ultimate result of probate 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.
Because of the complexities involved in winding up an estate, including resolving probate litigation it is important for an executor, beneficiary or any interested party to be represented by someone with experience. The staff at Stephen Bilkis and Associates has years of experience representing fiduciaries and other interested parties in New York Surrogate's Court. In addition, we have worked closely with many clients to help them create wills as well as other estate planning documents. Contact us at 800.696.9529 to schedule a free, no obligation consultation regarding your estate plan.