If you have had a loved one pass away, the property and any debts that they leave behind need to be settled. Ideally, they will have an up to date estate plan in place, which will allow everything to be handled quickly, and with very little difficulty. Unfortunately, in many situations because of lack of experience or simple ignorance, the estate or trust may be mishandled by the fiduciary (executor or trustee), assets may have been wasted or distributed incorrectly and taxes may have been allocated without proper tax allocation basis. If you are a disinherited surviving spouse, you may also have claim against the estate. If you believe that distributions came out of the trust not in the best interests of the beneficiaries or not as the trust proscribes, you may have a cause of action against the fiduciary. If your trustee or executor keeps you in the dark with respect to the trust or estate, you may compel the fiduciary to account and you will have to carefully review the accounting, once produced. If the accounting does not match your expectations or clearly shows misappropriation of assets or some mishandling of assets, you may need to file objections to the accounting.
One of the first things that is going to have to happen with most estates is the settling of debts. All creditors that your loved one owed money to will make a claim against the estate. The estate will then need to determine if these claims are valid, and if they are, pay them out of the assets within the estate. This will all be done by the executor of the estate, who will either be named in the will or appointed by the courts. If a creditor is not valid, the executor will have to show why to the courts, so that claim can be dismissed.
Enforcing the Decedent’s Wishes
Beyond paying off any final debts, one of the most important goals of the fiduciary should be to honor the deceased person’s wishes. If there is a Will in place, the instructions within the Will have to be followed as closely as possible. It is possible to dispute a Will in certain cases, but if there is no strong reason to overturn a Will, the courts will tend to uphold whatever it says. Some reasons why a Will can be successfully disputed include:
Undue influence – If it can be shown that the deceased person was unduly influenced in creating or changing their Will.
Incapacity – If it can be shown that the decedent lacked capacity when they executed the Will (note that the capacity needed to execute a Will is not the same as contractual capacity).
Improper execution – If it can be shown that the Will was not executed properly observing all the formalities of the State of New York.
There are other reasons why a Will can be contested. Depending on the size and complexity of the estate, this process can take many months, or even years, to complete.
Mishandling of estate or trust assets by fiduciary
It is not easy being a fiduciary and running the estate or trust so that all of the beneficiaries are happy. For example, let’s a decedent created a marital trust under his or her Will and a lifetime mandatory income beneficiary of such trust is a surviving spouse, who is a second spouse of the decedent. Let’s say the remainder beneficiaries are children of the decedent from his first marriage. Under these circumstances, the spouse will always prefer for the income producing investment to be held by the trust (and the spouse has an affirmative right under the Trusts and Estate Laws of the State of New York to enforce said right) and will not care much for the growth of the assets. The children, who are expecting to receive their share after the spouse dies will necessarily object to the investment strategy because they will prefer that trust assets be invested with growth goals not income producing goals in mind. At the end of the day, it is trustee who is in the middle of this tense situation. At the end of the day, it is a trustee who will be taken to court for mismanagement of assets.
If you are a fiduciary who finds himself or herself in a situation where compelling arguments of beneficiaries whose interests do not align trouble you, we can help. Trustees are not charged with super-hero vision into the future. They are charged with a duty of care and loyalty to the beneficiaries. Therefore, there is a way to navigate those dangerous waters with our help. We will also assure that your accounting is up to date by maintaining a monthly log of the trust’s or estate’s activities. This will prevent you from being caught off guard with a citation compelling you to account. You have to stay on top of your game and we will help you with all your tasks as New York fiduciary.
If you are a beneficiary who thinks that his or her trustee or executor is mishandling the assets of the trust or estate, reach out to us to look through complex income and principal allocation rules and other factors that may be not intuitive to understand. If you just received a letter from your trustee asking you to sign a release and indemnity, call us and we will take a look at the trustee’s accounting just to make sure that everything is done in accordance with the highest standards imposed upon fiduciaries in New York.
Effective Estate Litigation Representation
We always strive for a settlement because we know how stressful, unpleasant and heartbreaking litigation can be. We will negotiate on your behalf and with your best interest in mind but if you need help with estate litigation, our team will be there for you. We’ve been working with clients in this area for many years and would be honored to help you next. Whether you are an executor of an estate and you need help through the process, or you are looking to make a claim against an estate, we can help. Please contact us at 212-596-7039 today.
Our policy is to communicate clearly, concisely, and on a timely basis. To be responsive to clients. If we can’t take your call immediately, you can expect that a telephone message left in the morning.