The word “probate” is often tossed around as something to be avoided.  As if the failure to avoid it were a mark of stupidity, or symbolized a lack of care or planning.

On some level if a person does extensive planning, and has ALL their assets with named beneficiaries, or if a person creates a trust (AND takes the additional step of transferring ALL their assets to the trust), probate can be avoided.

But what is actually being avoided?  Is avoiding it worth the effort?

What is probate, really?

In New York, probate means that a Will has been recognized by the Surrogates Court as proper.  The end result is that somebody (usually the person named as Executor in the Will) receives a document from the Court called “Letters Testamentary”.  This is the Executor’s proof that he/she has authority to act on behalf of the Estate.

When there is a Will, you need Letters Testamentary to transfer any asset (bank and brokerage accounts, real estate, co-op apartments, etc) that was owned in the name of the deceased person,.

If you are named as an Executor in a Will, and you have the original Will and a death certificate, can you go into a bank and close out a deceased persons account? Nope.  The bank will tell you to come back with Letters Testamentary. What they are really saying is “get the will probated”.  This requirement is essentially a safety measure that protects all the interested parties.

Probating a Will is a Surrogate’s Court proceeding.  The specific facts and circumstances will determine whether it’s simple (and many times it is) or complicated.

I’ve heard people say that many procedures were “invented by lawyers to make things complicated so lawyers can make money”.  I see it quite differently, and I would summarize the need for these proceedings as follows:

“There is no end to the creativity and deviousness of SOME people when it comes to doing what is NOT proper, ethical, moral and legal.  The court proceedings are designed to protect the wishes of the person who made the Will, as well as to protect those who the decedent intended to inherit.  Related to that is sometimes it’s just not clear that the “Will” in question is actually what the person wanted. The procedures are designed to make sure the people affected by the Will are notified and that they have an opportunity to be heard (if there is some issue worth hearing)”

Since there is no way for the Court to know in advance whether a particular Will has “issues”, or whether the people involved are honest and nice, to probate a Will and get Letters Testamentary requires following the procedures.  That being said, VERY often you can identify the interested parties, they can all sign a “Waiver and Consent”, and the Will can be admitted to probate (and Letters Testamentary issued) pretty quickly.

Does it take some legal knowledge and time and experience to probate a Will? Sure, but in friendly situations (which is often the case) the fees should not be onerous. If they are, call a different lawyer. Can the fees become substantial if there are issues with a Will?  Certainly, but we lawyers didn’t create a system to encourage that. The procedures are in place to be sure that interested parties are heard and can have the issues resolved by a Court if necessary.  Personally, I’d rather earn modest fees in friendly situations, as opposed to bigger fees from dysfunctional family feud cases.  But hey, we can only play the hands we are dealt.

Probate is not a dirty word.  It’s a necessary proceeding so that a person’s Will can be carried out.

Lastly, in case it occurred to anyone, if there is no Will there are procedures for that, and interested parties are protected.  Those are called Administration Proceedings, and the end result is an Administrator gets Letters of Administration, and can do their job.  This topic is discussed in other articles!

Contrary to popular misconception, their assets do NOT “go to the State.”
When there is no will, and a person dies, the laws of intestacy apply.  All States have such laws, essentially a logical order with the closest relatives inheriting.  In New York it goes like this:

 

– if a spouse and no children, all to the spouse

– if children and no spouse, all to the children, per stirpes *

– if spouse and children, first $50,000 to the spouse, then 50% to the spouse and remaining 50% to the children, per stirpes *

– if no spouse or children, all to the parent(s)

– if no parents, all to siblings (or children of predeceased siblings, a/k/a nieces/nephews), by representation **

– if no siblings or nieces/nephews, you start getting to aunts/uncles and cousins. (lots of special rules)

– if no aunts/uncles/cousins, you go to first cousins once removed, ie – children of pre-deceased first cousins (even more special rules)

* I try to avoid using legal lingo, but “per stirpes” comes up a lot, and is mentioned in lots of wills.  It means “per the lineage”, and can be illustrated with a simple example.  If an unmarried person dies, and had two adult children, but one of the children had pre-deceased but had three children (grandchildren to the person who died), the estate would go 50% to living child, and 50% split 3 ways among the children of the pre-deceased child.

** Sibling/niece/nephew cases are not done per stirpes, but “by representation”.  The best way to calculate this is to say its sort of like per-stirpes BUT nobody has an advantage or disadvantage by being in a larger or smaller family.  A simple example to illustrate this:  The decedent was not married, had no children, and parents pre-deceased.  He had three siblings, one is living and the other two pre-deceased.  Of the two who pre-deceased, one had two children and the other had four children.   Under inheritance by representation, the surviving sibling would inherit 1/3, and the remaining 2/3 would be divided equally among the six nieces/nephews.

The above is a rough sketch.  There are rules to cover EVERY situation you could think of, and they ALL come up.  When the question is “which relatives are entitled to what percentage”, there is always an answer to that question.  Of course, sometimes it is not so clear who is legally related. As you might imagine, we sometimes have to determine who was married (or divorced), or who was somebody’s parent, or was somebody legally adopted, or whatever became of somebody who has gone missing.

Another important aspect of the intestacy rules is that if there is no will, only a person who inherits under intestacy is entitled to petition to become the Administrator.  This can be a very important consideration when trying to figure out who can act and what they should do.

It’s also worth noting that even when there IS a Will, probating it requires getting jurisdiction (placing on notice) those people who would inherit under intestacy, since they are the only ones with standing to contest a Will.

Please contact my office if I can assist with any inheritance issues.

In this article we will review the inheritance rights of first cousins, first cousins once removed, and second cousins under New York law.

People often use the “cousin” terms loosely, as if they were interchangeable.  For family and social purposes they are interchangeable, but legally they are decidedly NOT.  This distinction arises in two particular situations:

  1. When a person dies without a Will (which is called “intestate”) and the closest relatives are cousins.
  2. When a Will is being offered for probate and the Court has to decide who is entitled to notice, which are people who may have intestacy inheritance rights.

For cousins to be in play, the decedent would have to die without spouse, children, grandchildren, parents, siblings, nieces/nephews.  Aunts/uncles (if any) would inherit, along with first cousins, but aunts/uncles knock out their own children in this scenario.

When discussing cousin inheritance rights, it is crucial to define the terms:

First cousin – The intestacy statute doesn’t use the word “cousin”.  It refers to first cousins as “children of common grandparents”.  Here’s the statute (EPTL sec 4-1.1) https://codes.findlaw.com/ny/estates-powers-and-trusts-law/ept-sect-4-1-1.html The first hundred or so times I read this it seemed confusing, but if you think about it, how else could you define a cousin?  True first cousins share a common grandparent.  That’s it.  Most people can think of clear examples in their own family…”Grandma Anna’s brother (Uncle Joe) had a son Bobby, who is your first cousin Bobby.”

Second cousin – At the end of the first cousins section of the statute (paragraph 6) it says:  “….issue of grandparents shall not include issue more remote than grandchildren of such grandparents”.  So, a sometimes startling fact: “second cousins to a decedent do NOT have inheritance rights in New York.”  Second cousins, which most of us have and know (and call them cousins) share a common great-grandparent.  The reason we often know them fairly well is that their parent and ours were first cousins (because THEY shared a common grandparent).  But, legally such people are second cousins to each other and don’t inherit under intestacy.

First cousin once removed – What if first cousin Bobby has previously died and he had a daughter Jane (who is close in age to you and you always called her cousin Jane). She is not a first cousin.  A child of a first cousin is called a “first cousin once removed” because they are a generation below.  If you want a brain-bending experience please read paragraph 7 from the link above.  The paragraph refers to “great grandchildren of grandparents”, and as I’ve thought about this over the years, it DOES define it better than any other way it could be defined.  These folks only have inheritance rights in limited situations.  The only time first cousins once removed can inherit is if there is nobody at the level of first cousin on either side of the decedent’s family.  This wasn’t totally clear in the statute, but was resolved in an interesting case called “Matter of Shumavon” https://casetext.com/case/matter-of-shumavon   The bottom line for that case is “first cousins on one side of the tree inherit ahead of first cousins once removed on both sides of the tree”.  Believe it or not, this actually comes up fairly often!

One more thing about cousin cases.  When first cousins might be inheriting, we have to look at the decedent’s maternal and paternal first cousins.  Most people have cousins on both their mother’s and father’s side, and by law the inheritance is 50/50 to each side.  So, if there are two paternal cousins and ten maternal cousins, 50% is shared by the two paternals and 50% is shared by the ten maternals.

Very often the people inheriting as cousins under intestacy were not close (in the personal sense) to the decedent.  Or, one cousin was actually close and thirty others weren’t but they are forced to share equally.  This illustrates something that occurs to me at some point of every cousins case, which is “This person should have made a Will”!!

At some point everyone “thinks about making a Will”.  Some turn the thought into action and do it.  Some don’t.

As a lawyer I say everyone should act on this thought, but in reality the consequences of not acting may not be SO bad, IF the results would be relatively the same with or without a Will.  When a person has a spouse and some grown children, and everyone is friendly, things will probably work out if the person dies without a Will.  OK, you wouldn’t have the ability to name one of them as Executor, but they’ll figure it out because they are good kids.

Sometimes it could be a little bad if there isn’t a Will, if kids who seemed to get along start vying for “who is going to handle things”, and friendly siblings now have resentments they’ll never lose.  OK, kinda bad, kinda sad, but that’s life.

Sometimes, thinking about a Will and not acting is downright DANGEROUS.

Here are a few ways I have seen this play out ……..

  • Elderly spouse in nursing home inherits and the money is lost to the kids as the nursing home or Medicaid get it.
  • Disabled child inherits and a mess and family feuding follows.
  • Drug/alcohol abusing adult child inherits and blows their inheritance.
  • Adult child with health issues inherits, then dies and their evil spouse gets the inheritance.
  • Person’s closest relatives are 15 cousins, most of whom they have no contact with, and they inherit rather than people who person “thought they would leave it to in a Will”
  • Person has a long standing, intimate relationship with someone but is not legally married, then they die without a Will and the relatives not only inherit, they kick the surviving person (the one that had the relationship) out of the house.  These are some of the saddest cases and could have been easily avoided.
  • Person disliked their closest relatives and had a bunch of great friends (and charities they cared about), but didn’t make a Will.  So, the creepy relatives inherit everything and friends and charities get nothing (other than knowing you thought about putting them in your Will)

There are so many scenarios where thinking and not doing are dangerous and wrong.  They have a simple, recurring theme:

IF THE RESULT FROM NOT HAVING A WILL WOULD BE DRASTICALLY DIFFERENT FROM WHAT YOU WOULD WANT TO WATCH FROM HEAVEN,

CALL A LAWYER AND MAKE A WILL!!! 

P.S. – It’s not expensive and you will sleep better.

 

 

 

 

Under New York law, when a person dies without a Will, sometimes  first cousins CAN inherit, subject to certain special rules.

The most significant rule is that while first cousins can inherit, generally they cannot serve as fiduciary.  This job goes to the Public Administrator if the County has one (5 boros, Nassau, Suffolk and Westchester Counties do).

After the Public Administrator is appointed, they do what a fiduciary is supposed to….marshal the assets, pay proper debts and taxes, and then account to the heirs.

When the Public Administrator files an Accounting Proceeding where they believe the closest heirs are first cousins, they list them as “alleged first cousins”.  They get served a Citation.  Their response should be to file “kinship objections”, essentially saying “I am not alleged, I AM”

Thus begins a kinship proceeding.

During a kinship trial, cousin claimants not only have to prove their relationship, they also have to dis-prove the prior classes.  Specifically, they have to prove that the decedent died without a spouse, children, grandchildren, parents, grandparents, siblings, nieces/nephews.  It can be challenging to prove the non-existence of classes of people.

However, there are a few sources and techniques we frequently use:

  1. Testimony – During a kinship trial we need court testimony to lay a foundation for the introduction of documents into evidence.  The best testimony often comes from older relatives who can  “testify as to the family tree”.  Not everyone can do this, and not every family has someone who can do it. But many do.  In a cousin case we need someone testify about the decedent’s grandparents and more importantly, the grandparents children (who are the aunts and uncles of the decedent). Testimony and documents about aunts and uncles is crucial in a cousins case because after all, who are cousins? They are children of aunts and uncles!
  2. Surrogate’s Court records – These are the gold standard for proof in a kinship case.  This is because the files contain Affidavits where people swore to familial information.  So, if you have an old Surrogate’s Court file for Grandpa, where there are Affidavits naming his children, this is very useful in establishing how many aunts and uncles there were.  These files often have other useful peripheral information too.  Outside of New York there are similar Courts relating to probate and inheritance.  They are always worth looking at in kinship cases.
  3. Obituaries – The internet has made these much easier to locate and obtain.  When trying to prove how many children someone  had, or who someone’s relatives were, obits have the goods.  That being said, sometimes they get it wrong.  Discrepancies in obits can often be explained with testimony.  So, obits are useful, but you have to look at them carefully.
  4. Census records – You can send away for certified Federal (and State) census records.  The Federal census is every ten years, and at this time you can get them through 1940.  These are very useful in establishing how many children a particular person had.  The records are pretty detailed regarding who was living in a particular household, and how they are related.  As with obits, sometimes the census records really help, and sometimes they present questions that have to be explained.  Like, if in 1920 you have a 3 year old showing as a child in a household, and in 1930 that child is no longer there, what happened?  Sometimes there’s a useful explanation….like, he died.  But what if the explanation is “the family was poor so he was sent to live with relatives down South, and we lost track of him”?  Hopefully you can pick up the trail and account for this person and his/her offspring.
  5. Military records – these can often be obtained and provide useful family information, particularly about a person’s parents.
  6. Church records – Very useful for marriages, births and sometimes deaths. Very often in kinship cases we are going back in time and needing to prove family histories from other countries. Very often the local church records are a good source of documents and leads to other documents.
  7. Cemetery records and tombstones.  Yes – I’ve even gone myself and looked, and taken a picture or two to use as evidence.
  8. Documents themselves – Sometimes documents themselves prove more than what you got them for, and/or provide great leads.  For example, death certificates show marital status and also show the relationship of the “informant”.  Marriage records list parents.  Immigration records list family members and relations. Birth certificates from many places list “number of children born to this mother” (which can either be very helpful or cause a need for some ‘splaining)

The records above are just a few of the more common techniques and sources.  But every case presents unique proof issues, and we are always finding new and creative ways to establish kinship.

Next post – Saving the day in kinship cases…SCPA 2225

When I refer to a “probate case”, I am talking about any situation where someone has died and now someone else is in my office.

In these situations there are 3 main areas I ask questions about.  I can’t think of a situation where these questions would not be asked.  Asking these questions helps me figure out what may need to be done, helps me analyze possible scenarios, and helps me decide whether (and on what basis) I would consider getting involved.  Here are the 3 questions….

  1.  IS THERE A WILL?
  2. IS THE SITUATION FRIENDLY OR UNFRIENDLY?
  3. AM I BEING ASKED TO REPRESENT THE FIDUCIARY, OR SOMEONE AFFECTED BY WHAT THE FIDUCIARY DOES (OR DOESN’T DO)?

 

IS THERE A WILL?  Sometimes it’s not so simple.  Maybe we only have a copy?  Maybe the Will is questionable?  Maybe the Will was revoked?  Maybe we can’t locate the Will?Whatever the story is, I want to know any issues about a possible Will.   Sometimes the answer is a clear “there’s no Will”.  So be it, and we know we are doing an Administration under the laws of intestacy.   But at least we have square one covered…

 

IS THE SITUATION FRIENDLY OR UNFRIENDLY?  Contrary to what many people think, very often these situations are friendly.  That being said, even friendly situations require identifying and locating all the people whose written consent may be required.  This is true whether there is a Will or not.  Anyone who has a possible legal interest must be accounted for in the Court filings, or a fiduciary cannot be appointed.  So, in a friendly situation we would have the interested (friendly) parties sign the right papers (usually a “Waiver & Consent”) for whatever is going on.  If some interested party is unfriendly, I want to know what the problem is.  We can proceed even if there is unfriendliness, but we will have to put those folks on notice (usually with a Citation), knowing they may show up in Court and have something to say.  So be it, we can prepare accordingly…

 

AM I BEING ASKED TO REPRESENT THE FIDUCIARY, OR SOMEONE AFFECTED BY WHAT THE FIDUCIARY DOES (OR DOESN’T DO)? – Very often the person who contacts me is not the fiduciary.  In fact, they contact me because they have questions about what the fiduciary is (or isn’t) doing.   In those cases I ask first about #1 and #2.  I ask about the Will because I want to know what their interest is….a fixed dollar bequest?  a percentage?  an intestate share?  I ask about #2 because rather than assume things are very unfriendly, that is not always the case.  Sometimes nobody has actually asked the fiduciary (m)any questions.  While the fiduciary should have volunteered the info, a clear and polite request from an attorney will often get a useful answer.  Sometimes, it’s only a little unfriendly and things can be resolved with some level of inquiry.  And of course, sometimes it’s VERY unfriendly and the fiduciary is a dastardly sociopath.  In those cases you have to be prepared for ANYTHING.  I’ve been there, and getting involved is sometimes a bad choice.  It’s a choice I make VERY carefully, and if I sense insanity on the horizon, I say NO and never regret it.

Anyway – that’s how I approach every new case.  Three main issues, once we talk about all three I’ll have a good idea of what the options and scenarios are.

BTW – I would NEVER quote a fee, flat fee, hourly fee, percentage, or any other fee, without thoroughly discussing the 3 issues.  It would not be fair to a potential client and it would not be fair to ME (something I DO consider).

Comments and questions are always welcome!!!

 

 

WHO SHOULD MAKE A WILL AND WHY DON’T THEY?

What happens when a person dies without a Will? Contrary to popular misconception, their assets do NOT “go to the State”.  Their assets go to “family members” under the State’s laws of intestacy.  So, the question any sane person with assets should be asking is “Who would inherit from me if I don’t make a Will”.

If the answer to that question is not what the person would want, THEY SHOULD MAKE A WILL.

Which leads to the question….WHY DON’T THEY???

WHY….do people who have no close family, and who think their distant relatives “don’t care about them”, frequently neglect to make a will, die with a lot of money, so these same distant relatives inherit their money?

WHY…..when people who have “nobody to leave my money to”, why don’t they make bequests to friends?  or charities?

WHY…..do some people put off doing something they know they SHOULD do?

Here are 10 reasons I’ve seen:

  1. Procrastination as a way of life.
  2. Fear of tempting the evil eye.
  3. Not being able to decide who should inherit (or waiting to see who deserves it.)
  4. Not wanting to spend ANY money to take care of this “discretionary” item.
  5. Not wanting to discuss their personal business and/or finances with anyone.
  6. Thinking they’ll do it later, “when they need to”.
  7. Under valuing their assets…this usually happens when there is a house and no liquidity.
  8. Thinking they have all their assets passing directly, so a Will would be moot.  Sometimes this is true, but usually not.
  9. Guilt related to what departed persons (parents or grandparents) would think about what they want to do.
  10. Simply being a selfish, self-centered narcissist who doesn’t care what happens when they are gone.

One could probably write a book, or at least a blog post, about each of these.  I will not do that here.  I will simply note that each of these reasons raise questions that anyone who has ANY of those thought patterns ought to consider,along with my initial question “Who would inherit from me if I don’t make a Will” AND “How would that result sit with me for eternity IF I DIED TOMORROW”?

Eternity is a long time.

 

Sometimes people write down their wishes or give written directions regarding what they want done after they die.  Sometimes they even call it a Will.

Will these be considered a Will?   NO

Sometimes people who would benefit from such writings ask me, as a lawyer, to bring these writings to the Courts attention.  They are essentially saying “Surely the Court will give SOME weight to the deceased person’s written statements.”  Will I make this argument?  NO

In New York, the only writings that will be considered a Will are those that fit the definition of a Will.  Briefly stated, “signed at the end in front of two witnesses”.

Not one witness.

Not “notarized”.

Can LegalZoom and other home made Wills qualify as Wills?  YES, if they meet the definition of a Will.  Most home made wills, where people have researched how to do it, actually turn out to be Wills.

But many attempts to make a Will, or related attempts to give directives after a person dies, FAIL.

When I see this, especially when the attempt looks legit, it’s pretty tragic. Sometimes it’s tragic because of the amount of money involved.  But even worse is the idea that the person wanted something done which would help somebody they cared about, and it isn’t going to happen.

I won’t take a case where we would be trying to make something a Will that isn’t, or try to convince the Court to do “the right thing”.  My advice in those cases is to tell the client to contact the people who benefit from the writing not being a Will and ask THEM to do the right thing.  Oh…and be nice when you ask.  Does this ever work?  Rarely, but when reasonably nice, honorable, ethical people are involved, sometimes they work something out.

More often though, such situations result in a hurt that lasts a lifetime.

In consideration of the above, if someone wants to “get their affairs in order”, they should do it right.  If you know someone in that situation and they need help, by all means HELP THEM.

Do I think the right thing is to encourage them to have a lawyer help them?  YES  But even a LegalZoom will or an effort where you try to get it right is better then a signed “letter”.

If you can’t find a lawyer who is affordable for this, look harder.  Many lawyers are willing to do basic Wills for surprisingly low fees.

I’ll go one further…..If someone fairly local needs a Will and is in the hospital, or confined to home, if they are able to tell me what they want, I WILL MAKE A HOUSE CALL TO GET THIS DONE.  It’s that important.  I know I am not alone in this approach.

Every time I do this, I know I scored a plus one in the cosmic karma of the universe.

So I got THAT going for me…which is nice.

 

If a fiduciary (in NY it’s an “Administrator” if no Will and “Executor” if there is) has to file an Accounting, where should they start?  What should they do?

The Answer is to know what you should have been doing all along, and if you haven’t been, get caught up as much and as quickly as possible.   Here’s what you should have been doing:

  • Collecting the decedent’s assets and depositing into an Estate bank account.
  • Addressing any creditor claims.
  • Filing tax returns when due and paying any taxes that might be owed.
  • Communicating to the interested parties about what is going on.

Does everyone do all these things perfectly?  Not always.  But if you have to account it should not be difficult to start catching up.  Not only that, if catching us is going to take some time, I’d suggest being open about it by disclosing to the beneficiaries exactly what is going on and how you are addressing it.

I have been using an expression lately that fits here:  “The fact that I should have already done something is no reason not to do it”.  Start doing it.  Collecting assets, dealing with creditors, dealing with taxes and communicating with beneficiaries IS the job.  It takes time and some persistence to do these things.  Just do what needs to be done.  If you need help, get help.  But get it done and communicate.  It’s way worse for everyone when you don’t.

Will some people second guess you?  Maybe, but that’s part of the job too.

For all these things to do, you should have your records and back-up.  If you got a little disorganized, or don’t have all the records, it just takes some time and effort to get what is missing and then organize it.  For many reasons, assets are sometimes hard to locate or difficult to collect.  Most beneficiaries understand this, and most of these problems ARE solvable.  I suggest fiduciaries try to solve these problems, but many times I do get involved as an attorney.  If this costs the estate a few bucks, beneficiaries understand this.

Creditor claims can be tricky and time consuming, but a fiduciary should not ignore them.  Every case is unique when it comes to creditor claims.  You have to factor in the nature and size of the claims, the number of claims, the known assets in the Estate, and know your settlement leverage, whatever it may be.  At the very least, I like to review this issue with the fiduciaries and have a strategy.

Most accountants do a fine job with filing income and estate tax returns for Estates. Common sense says avoid tax season for this if you can.  Accountants are happy to work on these estates when they are less busy.  If you don’t know an accountant, or don’t want to use your own, ask your attorney to refer one.  As a fiduciary, what you never want to do is have tax returns filed late.  When this happens, it’s your fault and you could be liable for any penalties an interest.  One of the reasons to collect assets quickly is have the Estate liquid enough to pay estimated taxes and avoid penalties.  I’d rather a fiduciary over pay an estimated tax and get a refund, than to incur penalties and interest later and be personally on the hook.

This brings up an important point.  When I am an attorney for a fiduciary, who is my client?  Am I the “attorney for the Estate”, as is often said?  I never refer to myself that way.  I consider myself the attorney for the fiduciary, in that capacity. That’s why I give the advice referred to above – I view my role as advising the fiduciary to act correctly in their role.

Finally, when communicating with the other beneficiaries, one should be conscious of any appearance of a conflict of interest.  This becomes clear when, as is often the case, the fiduciary is also a partial beneficiary (ie – the Estate is to be split 4 ways and the fiduciary has a 1/4 interest).  Your communication should always make your role clear, and you should be blatantly non-preferential towards yourself.  You’ll be entitled to you Executor’s fee off the top, and reimbursement of your expenses, plus your beneficiary share.  I want to make sure you get all that if that’s what you want.  (Sometimes fiduciaries do reduce or waive their fee, but that is a personal decision)

It is often said that the best way to settle a possible lawsuit is to prepare as if you would have to prove everything at trial.

When you have the goods, and you show that you did it right, these things resolve.

And if they end up in Court despite this, you are ready.

When someone is a fiduciary (Executor or Administrator) of an Estate, they are accountable to the people who have an interest in the Estate.  This includes the beneficiaries.  When they are doing their job correctly, they are transparent, honest, and communicative.

What if they aren’t doing those things?  What if they are being secretive, or doing things that don’t seem right?  Or are doing nothing?

Sad to say, these things happen with some frequency.

The remedy in New York is filing a “Petition to Compel an Accounting”.

This is a Surrogate’s Court proceeding which causes a Citation to be issued to the Fiduciary, directing them to appear in Court and file a formal accounting (or otherwise explain why they haven’t yet).  As in any Surrogate’s Court proceeding, the person asking for relief (the Petitioner) files a Petition which explains what’s going on.  It’s a pretty simple Petition, “I am a beneficiary in the Estate of Smith. Joe  is the Administrator.  It has been more than 7 months since Joe was appointed, and he has not accounted.  Make him file an Accounting”.  The wording is a bit more legal, but essentially that’s what it says.

Why 7 months?  That’s the time period for creditors to file claims, so generally we don’t expect a fiduciary to account before that time.

The “Petition to Compel” is served on the Fiduciary.  When the Fiduciary appears in Court in response to the Citation, the Surrogate generally asks a few questions:

  • Have you filed an Accounting yet?  If so, the “Compel” proceeding is over.  If not, the next question is “why not?”…
  • There are all kinds of answers, but no matter the explanation, the next question is, “when can you get it done and filed?”
  • Depending on the response, the next question will be “Are you willing to consent to an Order directing you to Account?” The answer should be yes, and then…
  • How long will you need?  The choices are usually 30, 45 or 60 days.  People sometimes ask for longer, but they better have a good reason.

The Court will then note for the record what the Fiduciary has agreed to, and then ask the Petitioner (the one who asked for an Accounting) to “Settle an Order”.  This means the Petitioner (or their attorney) will submit an Order for the Judge to sign that directs the fiduciary to account by a certain date.  Submitting this order is an important step because the time doesn’t start to run until the Judge signs the Order. If it seems strange that the litigants (or attorneys) have to submit the Order for the Judge to sign, I’d say “Welcome to law practice”.

When the Fiduciary files their accounting, this is a new proceeding.  That means their Petition and Accounting gets filed with the Court, with Citations issuing to all interested parties.  This is its own proceeding, where objections can be filed and the REAL issues are addressed.  I will cover this in a future post.

One more thing about compelling an accounting.  What if the fiduciary agrees to account, consents to an Order, an order is signed, and they STILL don’t account. The next step is a Petition for Contempt of Court.  Why is it “contempt”?  Because the person has violated a Court order.  Are fiduciaries ever put in jail for such things?

YES!!!

When things reach that point, they usually do what they are supposed to do.  Sometimes that’s what it takes.

And, sometimes at the outset you suspect it will be that way.  That’s why you get to ball rolling with the “Petition to Compel”.