When I am about to represent someone who is about to become a Fiduciary (Executor or Administrator) of an Estate, I find it helpful talk about “how an Estate finishes”.  Like many things in life, if you know where you are trying to go it is easier to make a good plan to get there.

Not every State handles “estate completion” the same way.  There are two basic approaches:  mandatory accounting vs non-mandatory accounting.

In a mandatory accounting State, some proceeding that must be filed so the the Court knows the Estate has been properly completed.  This generally involves filing forms and paying a filing fee. There are generally time constraints. I’m not going into more detail because New York (where I practice) is NOT a mandatory accounting State.

In a non-mandatory accounting State, the fiduciary is not required to file anything with the Court to show that the Estate is completed.  This raises two logical questions:

  1. What should fiduciaries do to properly complete an Estate and protect themselves?
  2. What happens (in a non-mandatory State like New York) if there is some issue or problem in completing the Estate?

What a fiduciary SHOULD do is keep good records, communicate regularly and transparently  with the beneficiaries, file any tax returns that are required, and then….SEEK TO COMPLETE THE ESTATE WITH AN INFORMAL ACCOUNTING.

This is done by showing the beneficiaries what has been done.  This can be done with a letter, or on a spreadsheet, or in any way that shows a bottom line for a proposed final distribution.  With this informal accounting we send a document called a “Receipt & Release. This essentially says “I know what you did as Fiduciary and I agree it was correct and I agree with the bottom line and I release any claims I may have about this”. The letter to the beneficiary makes clear that when the Receipt and Release is signed “then you will get your money”.

What if the beneficiaries don’t agree? Or don’t respond?

While New York is not a mandatory accounting State, the Surrogate’s Courts have an Accounting Department, where you CAN file a formal Accounting Proceeding.  Unfortunately, this happens a lot.  The Accounting Department is where the action is, and where most of the really acrimonious disputes are filed.

In a nutshell, when a Fiduciary wants approval for what they have done, or what they are proposing to do to complete the Estate, a petition for a formal accounting is filed with the Court. The Court will then issue a Citation to the interested parties, telling them essentially “The Fiduciary has filed the attached accounting and is asking the Court to approve it. Come to Court on (date) or a Decree will be issued approving the Accounting.”

If a beneficiary gets such a Citation and wants to dispute something, they file Objections to the Accounting. This then becomes a case, like any other civil litigation….discovery, motions, conferences, etc.

Generally an expensive, nasty mess.

Which is why it’s better to do a good job as fiduciary and find a way to account informally.

If you know this from the outset, and work transparently and with good communication, an informal accounting is much more likely.

When I refer to a “probate case”, I am talking about any situation where someone has died and somebody is talking to me about it.

There are 3 main areas I ask questions about. Asking these questions helps me figure out what needs 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.  For a Will to be effective, it has to be probated, which means it must be submitted to the Court with appropriate supporting documents. The Court’s approval of your Probate Petition means the will is valid and the Executor receives a certificate called “Letters Testamentary”, which is universally accepted as authority to act on behalf of a deceased person’s estate.

Sometimes the answer is a clear: “there’s no Will”.  So be it, and we know we are doing an Administration Proceedings 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 an estate representative cannot be appointed.  

In friendly situations 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)? – People who are named in Wills as Executors, and people who have a right to petition to be Administrators (also called “fiduciaries”) usually hire attorneys to represent them. The goal of an initial meeting is usually to identify what needs to be done, and making a plan for doinng it.

Sometimes people 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, I want to know the dynamics of what’s going on.. 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 in hindsight, getting involved was a bad choice. It’s a choice I’ve learned to 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!!!

When people refer to “cousins”,  in a way that covers a variety of relationships. For family and social purposes there isn’t much difference between first cousins, second cousins and “cousins once removed. But for legal purposes when inheritances are involved, there are big differences. The distinctions arise in two particular situations:

  1. When a person dies without a Will (also called intestacy) 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 might have intestacy inheritance rights if the Will were not good.

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 paragraph 6 of the New York intestacy statute (EPTL sec 4-1.a.6): After talking about the prior inheriting classes (spouse, children, parents siblings/nieces nephews), the next inheriting class is…  “one-half to the surviving paternal grandparent or grandparents, or if neither of them survives the decedent, to their issue, by representation, and the other one-half to the surviving maternal grandparent or grandparents,or if neither of them survives the decedent, to their issue, by representation; provided that if the decedent was not survived by a grandparent or grandparents on one side or by the issue of such grandparents, the whole to the surviving grandparent or grandparents on the other side, or if neither of them survives the decedent, to their issue, by representation, in the same manner as the one-half. For the purposes of this subparagraph, issue of grandparents shall not include issue more remote than grandchildren of such grandparents.”

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 many 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 in New York.

What is a “First cousin once removed” – What if your first cousin Bobby has previously died and he had a daughter Jane (who you always called 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 there is a paragraph 7 after the paragraph 6 stated 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”!!

As noted in previous posts, aunts/uncles/cousins CAN inherit, if they can disprove the prior inheritance classes (spouse, children, grandchildren, parents, siblings/nieces/nephews) and prove their own relationship and identify and account for everyone at their inheritance level. This generally arises when the Public Administrator is filing a Accounting with the Court and refers to the cousins as “alleged” first cousins. The cousins then object and this sets the stage for a kinship trial.

Here are a few sources and techniques that we frequently use in this context:

  1. Testimony – During a kinship trial we generally need court testimony to lay a foundation for the introduction of documents into evidence.  The best testimony often comes from relatives who can essentially “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 cousins case we need someone who can 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 have sworn to familial information.  So, if we locate an old Surrogate’s Court file for Grandpa, where there are Affidavits stating how many children he had, 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, and they are always worth looking at in kinship situations.
  3. Obituaries – The internet has made these much easier to find.  When you’re trying to prove how many children a particular person had, or who someone’s relatives were, obits are often useful.  That being said, sometimes they get it wrong too.  For example, in obits sometimes  step-children and even foster children are referred to as children.  This can often be explained with testimony.  So, obits are useful, but you have to look at them carefully and be prepared to explain discrepancies.
  4. Census records – Certified Federal (and State) census records can be useful  The Federal census is every ten years, and at this time you can get them through 1940.  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 pretty far back in time and needing to prove family histories from other countries. Local church records are a good source of documents and leads to other documents.
  7. Cemetery records and tombstones.  These are often indexed and searchable. And yes – I’ve gone to local cemeteries myself and taken a picture or two to use as evidence.
  8. Details within documents – Sometimes documents 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. Every case presents unique proof issues. It helps to look at the proof with a creative eye and open mind.

Next post – Kinship Proof When We Don’t Have a Witness with First Hand Knowledge

People often use the “cousin” terms loosely, as if they were interchangeable.  For 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.

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 inherit ahead of their own children in these scenarios.

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…”Mom’s brother had a son, he is your first cousin.”

First cousin once removed – What if your cousin has previously died and he had a daughter.  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 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!

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 do NOT inherit under intestacy.

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”!!

One last quick note about “cousin cases”. Although cousins can inherit, they generally cannot serve as the fiduciary. This is generally done by the Public Administrator.  When the Public Administrator handles a cousin case, they refer to the cousins as “alleged first cousins” and the cousins have to PROVE kinship.

These are interesting cases with all kinds of special rules. I am always available to evaluate a “cousin case” for attorneys who have received an inquiry or for cousins who may have such a case.

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

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? There are MANY possible Will scenarios.  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, something else may be going on.  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 now 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!!!

 

 

If a person dies without a Will, and the closest relatives are aunts, uncles and first cousins, do they inherit in New York?

The answer is YES, but there are some special rules. Aunts, uncles and cousins can inherit if there is nobody in the prior inheritance classes (spouse, kids, parents, siblings, nieces or nephews).  Here are just a few of the special rules:

  • Usually first cousins are not permitted to serve as Administrators of an Estate. The Public Administrator (in the 5 boros, Nassau, Suffolk and Westchester) generally serves as Administrator in cousin cases.  In the other Counties the County tax assessor acts as Administrator.
  • In aunt/uncle/cousin inheritance cases the Estate is divided into two halves, the maternal and paternal sides.  In a cousin case we must look at the status of aunts/uncles/cousins on the decedent’s mother’s and father’s side of the family.  As an example, if there is one cousin on the father’s side and ten cousins on the mother’s side, the paternal first cousin gets 50% and the ten maternal cousins split 50% ten ways.  Life is hard sometimes.
  • First cousins once removed (children of first cousins) can only inherit if there are no other first cousins on either side of the family.  First cousin once removed cases can be tough.

When the Public Administrator handles an Estate, they do anything and everything that a typical family member Administrator would do. They sometimes arrange burial, they clean out apartments and houses, they search for a Will, they receive mail, they sell houses or apartments, they marshal accounts and assets, they deal with claims of creditors, they file tax returns, and ultimately they try to figure out who is legally entitled to receive the inheritance.

When they reach the point where an Administrator would ordinarily pay the money to the heirs, the Public Administrator will file an “Accounting Proceeding”. Essentially, they set forth for the Court what they have done, detailing all the money taken in and paid out, and ask the Court to approve the way they have handled the money and the claims, and to approve fees for their attorneys.  The final thing the accounting proceeding requests is a determination regarding WHO is entitled to receive the balance of the money. The Public Administrator does a kinship investigation, so they generally list (and notify) the people they believe are the cousins. However, in the Accounting Proceeding they refer to the cousins as “alleged” cousins.

When cousins receive a Citation in an Accounting Proceeding where they are called “alleged” first cousins, they should retain counsel and file Objections with the Court.

This is the beginning of a “Kinship Proceeding”.  In a kinship case, the cousins have to prove who they are, and thereby claim and ultimately receive the money. This is not as simple as it seems. Not only do the cousins have to prove who they are, they have to DIS-prove prior inheritance classes AND show how many cousins there actually ARE. The proof in these cases consists of testimony and certified documents.  Typically it is necessary (and certainly helpful) to use a genealogist to prepare a family tree and obtain the necessary documents.

Proving negatives creates some special challenges.  In future posts I will address many of the techniques that are used to prove kinship.

Attorneys who do this type of work will generally agree to work on a contingency fee basis.  If I investigate the situation and think the case can be proven, I am amenable to contingency fees.

It is worth noting that there are at least three distinct risks that can sometimes derail (or devalue) these cases:

  1. A person with prior inheritance rights.  For example, if the decedent’s father had a another child (maybe from a prior marriage or out-of-wedlock), that child would be a half-sibling of the decedent and would be ahead of all the aunts/uncles/cousins.  I’ve seen this scenario more than once!
  2. A Will can be filed while the case is pending.  Generally, if a Will gets filed the Court has to consider it, and the wishes of the decedent are accorded great priority.  This can and does happen too.
  3. A big lien or creditor claim.  This can be for Medicaid or Social Services, but any creditor claim is a concern.

For the people who die and create these cases, or for the friends or family who WOULD have been included IF the decedent had made a Will, these cases are often kind of sad. For people who are notified out of the blue that “your cousin so and so died, and you may have inheritance rights”, not so sad.  In law school they called these “laughing heirs” cases. Law students probably think these never actually happen, but they actually happen pretty often.

If you receive a notice from the Public Administrator about one of these matters, or if you are contacted by a “genealogy company” about it, please give me a call.

When I represent someone who is about to become a Fiduciary (Executor or Administrator) of an Estate, I always talk about “how an Estate finishes”.  Like many things in life, if you know where you are trying to go it is easier to make a good plan to get there.

Not every State handles “estate completion” the same way.  There are two basic approaches:  mandatory accounting vs non-mandatory accounting.

In a mandatory accounting State, some proceeding that must be filed so the the Court knows the Estate has been properly completed.  This generally involves filing forms and paying a filing fee.  There are generally time constraints   I’m not going into more detail because New York (where I practice) is NOT a mandatory accounting State.

In a non-mandatory accounting State, the fiduciary is not required to file anything with the Court to show that the Estate is completed.  This raises two logical questions:

  1. What SHOULD fiduciaries do to complete an Estate and protect themselves?
  2. What happens in New York if there is some issue or problem in completing the Estate?

What a fiduciary SHOULD do is keep good records, communicate regularly and transparently  with the beneficiaries, file any tax returns that are required, and then….SEEK TO COMPLETE THE ESTATE WITH AN INFORMAL ACCOUNTING.

This is done by showing the beneficiaries what has been done.  This can be done with a letter, or on a spreadsheet, or in any way that shows a bottom line for a proposed final distribution.  With this informal accounting we send a document called a “Receipt & Release”.  This essentially says “I know what you did as Fiduciary and I agree it was correct and I agree with the bottom line and I release any claims I may have about this”.  The letter to the beneficiary makes clear that when the Receipt and Release is signed “then you will get your money”.

What if the beneficiaries don’t agree?  Or don’t respond?

While New York is not a mandatory accounting State, the Surrogate’s Courts have an Accounting Department, and CAN file a formal Accounting Proceeding.  Unfortunately, this happens a lot.  The Accounting Department is where the action is, and most of the really acrimonious disputes are there.

In a nutshell, when a Fiduciary wants approval for what he has done, or what he is proposing to do to complete the Estate, a formal accounting is filed with the Court.  The Court will then issue a Citation to the interested parties, telling them “The Fiduciary has filed the attached accounting and is asking the Court to approve it.  Come to Court on (date) or a Decree will be issued approving the Accounting.”

If a beneficiary gets such a Citation and wants to dispute something, they file Objections to the Accounting.  This then becomes a case, like any other civil litigation….discovery, motions, conferences, etc.

Generally an expensive, nasty mess.

Which is why it’s better to do a good job as fiduciary and find a way to account informally.

If you know this from the outset, and work transparently and with good communication, an informal accounting is much more likely.

 

Many lawyers deal with Surrogate’s Court only peripherally.  Considering that questions about Estates and Surrogate’s Court arise so often, it is worth knowing the basics. Here are the top 10 things worth knowing about Surrogate’s Court….

1. The Surrogate Court Clerk’s offices are broken down into departments:

– Probate (Appointment of a fiduciary when there is a Will)
– Administration (Appointment of fiduciary when there is no Will)
– Accounting (Issues concerning distribution of the Estate, a/k/a “fighting over the money”)
– Guardianship (protection of minors, personally and financially)
– Miscellaneous (all kinds of proceedings: entering an apartment, getting into a safe deposit box, removing fiduciaries, and more)

2. In probate cases there’s a presumption that an attorney drawn will (with the will signing supervised by an attorney) was validly executed.  With those wills, in a contest the burden of proof is on an objectant claiming improper execution. A non-attorney supervised will does not get this presumption, so the burden is on the proponent to prove proper execution. Sometimes this is a BIG hurdle.  Note to any LegalZoom Will customers – Think about the above before you “save money” doing it yourself!

3. To the extent any beneficiary in an Administration (intestacy) proceeding does not waive the requirement of the fiduciary posting a bond, the proposed fiduciary must post a bond in proportion to the beneficiaries interest. VERY often proposed fiduciaries have difficulty qualifying for a bond.

4. If there is a delay in a probate or administration proceeding, and something important needs to be done (like selling a house or co-op), it often makes sense to obtain “preliminary letters”. It costs some money and requires a bond, but in the end it can save the Estate a lot of money.

5. Contrary to what many clients think, death does not absolve an Estate from creditor’s claims. A fiduciary must address claims they know about or had reason to know about. There are a lot of rules and case law on this, but the bottom line is fiduciaries do better when they address claims pro-actively. There are also some claims (funeral, administration expenses, taxes) which take priority over general creditor claims.

6. When a proceeding is filed to open a safe deposit box to search for a Will, the box is opened in the presence of a bank officer. The contents are inventoried, and if a Will is found it is delivered to the Court. If a box is being opened after a fiduciary is appointed, the bank officer should not be observing. The fiduciary has a right to open the box on their own.

7. Nothing substantive can happen on a Surrogates Court proceeding until “jurisdiction is complete”. This occurs when all the interested parties have either signed a Waiver or been served. In a probate proceeding, all parties who would have an inheriting interest under intestacy are entitled to notice. This is true even if they are not named in the Will!!!

8. Whenever an interested party can’t speak for themselves (some examples are minors, disabled people, missing people, or “unknowns”) the Surrogate appoints a “Guardian-ad-Litem” for them. The Court fixes a fee for the Guardian-ad-Litem after they file a report, and they are paid out of the Estate. I’ve heard cynics question this, but in my view, this procedure is absolutely essential. I have served as a Guardian-ad-Litem many times, and take these assignments very seriously.

9. Estates worth under $50,000 (with or without a Will) can be handled under a simplified proceeding under Article 13 of the SCPA (Surrogates’s Court Procedures Act). These are designed to be handled without an attorney. Prior to the pandemic, most clients can handle these on their own.  At this time, e-filing is mandatory on all new cases, including Small Estates.  This is a big challenge for unrepresented (pro-se) persons.  An appointment in a Small Estate proceeding enables a person to collect up to $50,000. However, they would not be able to sign a deed or transfer real estate with this type of appointment.

10. First cousins can inherit under intestacy, but generally they can’t become fiduciaries. In “cousin cases”, the Public Administrator is the fiduciary. These Estates ultimately become “kinship cases”. This is a fascinating specialty within Surrogates Court practice.

Sometimes Surrogates Court seems like it’s own little world. It has many unique rules and procedures. All of these are designed to ensure fairness and prevent premature or improper distributions. Once one gets the hang of it, it starts to make sense. Most of the time, anyway.

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!