Tag: Wills/Executors

Can a Felon Serve As A Fiduciary?

SCPA § 707 sets forth a list of ineligibles – those persons automatically disqualified from serving as a fiduciary in Surrogate’s Court. The statute is clear: felons cannot serve. It does not matter when the felony occurred, the age of the offender at the time, or the type of crime committed. All felons have been branded as unsuitable to manage the affairs of others in Surrogate’s Court.

Notwithstanding the prohibition, felons have argued that exceptions exist and that a certificate of relief from disabilities renders them eligible. This is based on language in the Correction Law providing that a certificate may relieve a felon from “any forfeiture or disability … automatically imposed by law by reason of [the] conviction” (Correction Law § 701 [1]). This statute generally trumps “any other provision of law” to prevent the “automatic forfeiture of any license…, permit, employment, or franchise, including the right to register for or vote at an election, or automatic forfeiture of any other right or privilege” (Correction Law § 701 [1]).

Despite this language, the Surrogate in Matter of McNair was not convinced. There, the court concluded that a certificate does not alter the mandate of SCPA 707. According to the court, the Correction Law “merely affords [a felon] the privilege of obtaining gainful employment” and that a felon “remains ineligible to hold public office, a position for which society’s trust is rightfully expected” (Matter of McNair, 16 Misc 3d 1102[A], 2007 NY Slip Op 51223[U] [Sur Ct, Dutchess County 2007]).

The conclusion reached in the McNair case appears to be a minority view. In Matter of Pullman, for example, the Second Department held that the certificate indeed removes the automatic disqualification (89 AD2d 608 [1982]; Matter of Bashwinger, 92 Misc 2d 716 [Sur Ct, Albany County 1978]; see also Matter of Smith, 14 Misc 3d 1232[A] [Sur Ct, Bronx County 2007]).

Even these cases, however, recognize that a court may still deny the appointment of a felon in its discretion, and that a certificate does not preclude the court from denying the appointment under SCPA 707 (1) (e), which renders persons ineligible for other reasons, including dishonesty (see Matter of Pullman, 89 AD2d at 608; see also Correction Law § 701 [3] [permitting any judicial authority from relying upon the conviction as the basis for the exercise of its discretionary power to suspend, revoke, refuse to issue or refuse to renew any license, permit or other authority or privilege]).

The Surrogate in the McNair case, for example, relied on SCPA 707 (1) (e) as an alternative basis for its decision. There, the felon was a former attorney who had been convicted of grand larceny in the third degree and disbarred. The court found persuasive that at least two prior estates had allegedly suffered financial losses as a result of the felon’s dishonesty.
Similarly, in the Pullman case, the court concluded that the felon was ineligible as a “dishonest” person despite the certificate. He was indebted to the estate, had exercised undue influence over the decedent and commingled trust funds in another case, and had no less than 13 unsatisfied judgments against him.

So, to answer the question posed above – yes, convicted felons may serve as fiduciaries, but only the honest ones.

How To Prepare For a 1404- Subscribing Witnesses

The order of the witnesses’ testimony is ordinarily not known prior to the hearing. Thus, the subscribing witness is well advised to prepare for his testimony in advance of the hearing. When the hearing is scheduled, the witness should be provided with a copy of the self-proving affidavit and a copy of the will. The witness should review them in advance. In many cases subscribing witnesses are called upon to testify first. Often this is based upon the expectation that the testimony will be brief in contrast with that of the supervising attorney. In any event, the witness should be told that he will not be permitted to remain in the courtroom and listen to other witnesses testify, as the court will likely exclude the subsequent witnesses from the courtroom.
Most witnesses participate willingly as volunteers, knowing it is part of the lawyer’s duty to the decedent. Most do not retain counsel, nor do they require counsel in the ordinary case. A noncooperative witness is subject to subpoena.
A meeting should be scheduled for the witness with counsel for the proponent who will conduct the examination in court. The witness should be told of the significance of the examination and the formality of the matter before the court. The witness should be prepared to review any interactions with the decedent prior to the will execution. Attention should be directed to whether the decedent’s condition changed over time. All interactions with the decedent leading up to the will signing should be reviewed. Equally, if the witness continued to have contact with the decedent after the signing that should be explored as well. The witness should be asked if he maintained any notes independent of the law firm files. Further, the witness should be asked at the outset if there are documents that would refresh his recollection. In most cases it makes sense to provide them to the witness as they are ordinarily in the law firm’s file, possession or control.
It is not uncommon for the meeting with the witness to start with the witness professing to have no recollection of the signing. While that can be problematic in some cases, often use of the law firm diary or calendar together with time and billing entries can successfully rehabilitate a lagging memory. The file can be reviewed to refresh a recollection.
The statutory elements of due execution of the will should be considered and reviewed in detail with the witness. Special attention should be afforded to what the witness may have observed relative to the supervising attorney’s custom and practice in will executions. Many lawyers utilize a checklist and often state the identical words at every will signing that they supervise. The witness’ recollection of this can be powerful in defeating a potential objection alleging lack of due execution. It is critical that the witness be prepared to cover the exact elements required by the statute in order to prove due execution.
After covering due execution of the will, the witness’ attention should be directed to the subject matter of other potential objections in the case. Capacity of the decedent must be covered in all cases, even if in a cursory manner. The witness should be asked to describe the decedent’s condition at the time of the signing. The witness should become prepared to answer in his own words why the decedent was of sound mind and memory at the time that the will was signed. That testimony can often be the crux of defeating an objection alleging lack of capacity.
Rather than allowing the witness to opt out with a series of answers professing not to know or remember, the witness should be directed to state what he observed – both with his eyes and his ears. Often the most probative facts establishing capacity seemingly are the most innocuous and inconsequential at the time (e.g. where the decedent planned to go next after the signing or where she had been, who accompanied her to the meeting, sports, politics, heath, or the weather to name a few). It can be very helpful to have the witness relate a conversation that he had with the witness at the time of the signing.
The most important aspect of the examination is that part pertaining to what happened and what was said at the time that the will was signed. In order to ward off potential objections that testimony ideally should be strong and fact specific. The witness must be asked questions to eliminate all doubts. The witness should be asked to describe why (the reasons) he concluded that the decedent was free from undue influence at the time of the signing. This can be done by addressing who was present and what was said. Where a relative, friend or other person not associated with the law firm is present, the witness must take care to state the facts on which he relied in concluding that the decedent was free of undue influence.
The potential objection based upon fraud is difficult to prove. In any event the witness should be prepared to testify that no person made any false statements on which it appeared the decedent relied causing him to sign the will.
It is advisable to prepare the witness for the cross examination by allaying concerns. For example, the witness should be told that many cross examiners inquire about the decedent’s clothing, attire, personal appearance, hygiene and similar subjects. The witness should be directed to do his best to patiently and truthfully answer all the questions. The witness should be directed to be polite and professional with the cross-examining attorney no matter how disrespectful or silly the questions may seem.
The witness should also be reminded that the cross examiner may seek to exploit divergence in recollections and testimony. Thus, while that effort may be unnerving for the witness, he should do his best based upon his recollection and the documents.
It is not uncommon for the cross examiner to try to cast doubt. The witness should be prepared for this approach and in the appropriate instance rebut the effort with facts.

How To Prepare For Your 1404 Exam- Drafting Attorneys

LOCATE THE ESTATE PLANNING FILE

Many experienced estate planning attorneys assert that estate planning files of law firms should not be purged or destroyed. They often agree that destruction or purging of planning files is only allowable after the estate is closed. Additional factors to consider are expiration of the applicable statute of limitations for potential legal malpractice claims and the law firm’s policy on document and client file retention.
Minimally, the request for a 1404 examination requires that the attorney draftsperson should have a litigation hold immediately in place. A prudent practice is that on learning of the decedent’s death the hold should be put in place. The hold must include all electronically stored information. This will protect the attorney draftsperson and the firm from an embarrassing or harmful circumstance where the file becomes lost or destroyed. It is also an easy way to bolster credibility.

Notes which pertain to the client’s instructions given to the attorney draftsperson are critical. All prior drafts of the instruments prior to execution should be located. The correspondence section of the file and the billing records should be located as well.

ASCERTAIN THE WHEREABOUTS AND STATUS OF SUBSCRIBING WITNESSES

The court will rely on the proponent and counsel to produce the witnesses. Cooperation is key. Most non-attorney witnesses naturally will look to avoid coming to court. Even more so, they seek to do little to nothing in preparation for their testimony. It is unwise to leave the arrangements to the last minute. In some instances, a witness cannot be found. We have had experience with cases involving deceased supervising and drafting attorneys. The details must be considered before coming to court. No judge likes to be surprised or confronted with a circumstance that causes delay.
Minimally, the witnesses should be provided with a copy of the will, together with any affidavit that the witnesses signed as subscribing witnesses.

DO YOUR HOMEWORK PRIOR TO TESTIFYING

In order to fulfill the obligation to the testator, the supervising attorney has a duty to prepare for the examination. The obligation of the attorney that drew the will continues through the examination. The examination, particularly the attorney’s testimony is an opportunity to prove the client’s will by showcasing the great care and attention that was provided to the decedent’s legal work.

The supervising attorney and the subscribing witnesses must read the will and any self-proving affidavit in advance. The contents should be well known and understood by the attorney and ideally the witnesses before taking the stand. Incredibly, attorneys continue to testify that they are unfamiliar with the contents of the will, cannot recollect the plan or worse, have been too busy to re-read the will and the affidavit.

Many highly skilled estate planning attorneys find their work reduced to confusing and broken-down ruble where they have not prepared. Many attorneys fail to read their own file before taking the stand. They are unprepared to address or explain contradictory notes or case sensitive issues. Some fail to produce the entire file when required to do so. A rambling effort to explain away non-compliance does not bolster confidence in the will execution. These circumstances of muddled testimony do not escape the court’s attention.

False confidence causing a lack of preparation often leads to a highly adversarial examination with the drafting attorney coming across to the court as highly defensive, perhaps arrogant and in some instances lacking credibility. Adept counsel for objectants will immediately sense the defensiveness and exploit it heavily in both the exam and in further proceedings with the court and perhaps a jury.

Amazingly, attorneys continue to testify concerning the subject of due execution without regard for what the statute actually says. While the statute itself is somewhat forgiving in terms of the sequence of events in the signing, it does prescribe the elements which are required to make a valid will.

An effort should be made to refresh recollections. This can be accomplished in several manners. If the preparation is undertaken with a degree of seriousness and professionalism, the entire file and the notes should help greatly. There may be other law firm records, including time and billing entries that can greatly aid recollections. Colleagues are often able to recall some helpful details about particular clients as it is often the case that clients have contact with more than one person in a firm.

Consider Hiring Litigation Counsel For Your 1404 exam- Drafting Attorneys

The 1404 exam is often described by legal commentators as a classic fishing expedition. There is no doubt that the law affords a lot of latitude in favor of the examining party to allow a thorough and probing examination of the drafting attorney. A drafting attorney facing such an examination under oath in the courtroom and ordinarily, with the Surrogate Judge presiding should take the examination seriously.

Consider Retaining Counsel

The first consideration should be whether or not to engage estate litigation counsel. Most attorneys who are examined are excellent estate planners, who do wonderful work and see to it that the decedent’s intentions and instructions are carried out by a well drafted instrument. They are often highly skilled and knowledgeable about tax consequences, asset distribution, beneficiary rights and obligations of fiduciaries relating to planning an estate. However, ordinarily they do not possess litigation skills or experience. Many drafting attorneys work hard to ward off and avoid litigation, but in some instances it is simply unavoidable or known to be associated with some persons involved in the estate plan.

Competency Rule

Drafting attorneys caught up in estate litigation must consider Rule 1.1 requiring competency. The rule prohibits a lawyer from handling a matter which he knows he is not competent to handle. Further, the rule requires that lawyer to become associated with a lawyer who is competent to handle the matter. The rules are clear and leave no ambiguity. Estate planning and drafting attorneys are ordinarily highly competent to plan and draft estate instruments but not experienced or familiar with how to litigate the estate.

Format of Testimony

In considering whether to engage litigation counsel, the drafting attorney must immediately consider how to present the testimony and that of the subscribing witnesses in the absence of counsel handling the litigation. For example, while the law in New York allows the drafter to be sworn on the stand and to testify in a narrative fashion, often even experienced counsel will unintentionally miss required elements necessary for proving the will’s validity or the elements required to prove capacity in court.

The delivery of testimony in a narrative format can be effective in a simple case, but where the attorney client relationship was more extensive or multiple documents or wills are involved the narrative approach generally is not effective and can become a messy trap for the unwary.

Often the attorney who tries to do it all simply cannot handle the sheer volume of all the detailed required tasks associated with both testifying as a witness and handling the litigation. For instance, that attorney would be required to examine the subscribing witness, redirect examine that witness, testify in a narrative, be cross examined and then keep straight what points from the cross examination to cover on a redirect narrative. It is very difficult for any attorney to function as both an advocate and a witness in a client’s case.

Controlling Costs

The cost of litigation is an expense of the estate. It is not an expense of the attorney draftsperson. Experienced litigation attorneys will often readily agree to handle the litigation portion of the estate only. This benefits the client greatly. It allows the attorney who drafted the instrument to handle administration of the estate. This can keep costs down for the estate and permit an efficiency in the administration. It is often consistent with the decedent’s intention that his/her attorney handle the decedent’s estate.

Fending off the Attacks

In many cases the hearing and the potential objections can develop into an aggressive attack on the attorney’s written work product, professional skills, knowledge and efforts as a draftsperson responsible for proper execution of the will.

It is difficult for many attorneys to confront these intense challenges and attempt to withstand an attack as both a witness and advocate. In many of those cases the testimony, particularly the cross examination, can become very hostile. Some attorneys visibly react by coming across as a defensive or quarrelsome witness or worse, as an obstructionist hiding facts.

Some attorneys that represent objectants routinely move to disqualify the attorney drafter from the case, by asserting that the advocate witness rule (Rule 3.7) prohibits counsel from handling the testimony while remaining a witness in the case. Defending against a motion of this nature can chill the attorney client relationship between the drafting attorney and the will’s proponent/fiduciary.

Understanding Discovery in Probate Proceedings: Putting the Pieces Together

As explained previously, you need to be familiar with the rules of procedure to successfully play the litigation game in Surrogate’s Court. The rules can be much more complex than those applicable in the Supreme Court.

As a prime example of this, consider the rules governing discovery in Surrogate’s Court. To understand them, you need to first identify the type of proceeding at issue and then determine if the Surrogate’s Court Procedure Act (“SCPA”) contains any specific rules of its own.

SCPA Sections 1404 and 1410, for example, contain specific rules that authorize pre-objection discovery in probate proceedings. They permit parties to depose certain witnesses prior to the filing of objections, generally the attesting witnesses and the drafting attorney. They also permit the party conducting the examination to obtain documents from parties and third parties of all relevant matters which may be the basis of objections to the probate petition. Section 1404 also requires the estate to pay for the cost of these examinations if they occur prior to objections.

If objections are filed, the parties may seek to engage in post-objection discovery under Article 31 of the Civil Practice Law and Rules (“CPLR”), as applicable to probate proceedings by SPCA 102. SCPA 1404, however, limits a parties’ right to re-examine the same witnesses examined during pre-objection discovery.

Parties must also be familiar with Rule 207.27 of the uniform rules for the Surrogate’s Court. This rule is referred to as the so-called “3-2 rule”. Absent special circumstances, the 3-2 rule limits the parties’ rights to obtain discovery in probate proceedings to three years before and two years after the decedent executed the will (or up until the decedent’s death, if sooner).

To make things even more confusing, you will need to review the case law interpreting the 3-2 rule. By its plain language, the rule appears to be limited to only post-objection depositions. Section 1404 also expressly provides the party conducting a pre-objection examination with “all rights granted under [CPLR] article 31 … with respect to document discovery.” Nevertheless, the rule is drafted poorly. Given the confusion, a number of cases have decided to apply this 3-2 rule uniformly to all discovery conducted in probate proceedings, including pre-objection discovery. Parties must therefore familiarize themselves with the case law on this issue and ascertain whether the Surrogate in their case has rendered any prior decisions interpreting the rule. Parties must also review the case law to ascertain whether special circumstances exist to expand the scope of discovery.

Excluding a Parent From Sharing in a Child’s Estate Part 3- Abandonment

Is it fair for a parent to take an intestate share of a deceased child’s estate when that parent abandoned the child? The New York legislature says no. Pursuant to EPTL 4-1.4(a)(1), a parent is disqualified from taking an intestate share of a child’s estate on the ground of abandonment or nonsupport.

Originally, EPTL 4-1.4(a) provided that a parent who failed to provide for or abandoned the child while the child was under twenty-one years old, should be disqualified from receiving his/her distributive share in the deceased child’s estate unless the parental relationship and duties were resumed and continued until the death of the child. However, the statute has changed over the past twenty-five years.

The evolution of EPTL 4-1.4(a)(1) began when the statute was amended in 1993 to allow a biological parent to share in the estate where the parent could show that the parent had placed the child up for adoption, but that the adoption failed due to a fraud or deceit.

The provision was based on the infamous circumstances surrounding the case of Michele Launders, who hired attorney Joel Steinberg to arrange for the adoption of her unborn child, later named Lisa. Instead of arranging for a legal adoption, Steinberg kept the child for himself and his live-in companion, Hedda Nussbaum. Lisa suffered horrendous abuse and died as a result. After her death, her biological mother, Michele, attempted to pursue a wrongful death claim. But because Michele had abandoned Lisa, and Lisa had never been legal adopted by anyone else, there was no one with standing to bring the wrongful death suit. The 1993 amendment was intended to correct a perceived legislative injustice where the failure to support arose due to the act or omission of a third party, rather than the parent. After the amendment was adopted, Michele was permitted to proceed with the wrongful death suit.

In 2006, the statue was repealed and reenacted in an amended form. Additional grounds for disqualification were added. In instances where by an order a parent’s parental rights were terminated or suspended, the parent will be disqualified. The parent will also be disqualified if, in such a termination proceeding, (i) the Family Court suspended his or her parental rights pursuant to a suspended judgment; and (ii) the Surrogate’s Court subsequently finds, by a preponderance of the evidence, that the parent failed to comply with the Family Court order during the suspension period. The provision is intended to prevent an abusive parent from sharing in the intestate share of a child.

Although the legislature has not defined “abandonment” in the statute, courts apply common-law principles in determining what constitutes abandonment in cases involving EPTL. Courts have consistently held that abandonment includes the “voluntary failure of duty to care for and train a child and a failure to supervise and guide the child’s growth and development” (Matter of Wigfall, 20 Misc 3d 648 [2008]).

In a case where an adult daughter died tragically on September 11, 2011 in the World Trade Center attacks, the decedent’s siblings petitioned the court to disqualify their father from taking a distributive share in her estate on the grounds that their father had abandoned her (In re Estate of Gonzalez, 196 Misc 2d 984 [Sur Ct, Bronx County August 26, 2003]).

The decedent’s parents were never married and were unable to maintain a home for their three children. As a consequence, the two daughters were cared for by their maternal grandmother and great grandmother, and the son was taken in to foster care. The decedent’s mother pre-deceased her and the father relocated from New York to Florida when the decedent was seven years old.

The father provided no support for the children. He testified that he visited with the decedent occasionally when he visited New York or when she visited Florida, but he was unable to remember how many times they visited. He also testified that he had phone conversations with the decedent twice each year, yet she was the one who made the calls to him. The father was not even aware that the decedent worked in the World Trade Center until after her death.

In this case, the court framed the question of abandonment as whether the “father evinced an intent to forego his parental rights as manifested by his failure to visit with the decedent or to communicate with her when she was a child, although clearly able to do so.” The court held that insubstantial, infrequent visits or communications by the father with the child would not preclude a finding of abandonment, and that the father’s alleged long-distance love did not constitute the “natural and legal obligations of training, care and guidance owed by a parent to a child.” As a result, the court ruled that the father was not entitled to a distributive share of the decedent’s estate or to share in any wrongful death recovery on the grounds that he abandoned her.

However, in another case involving the World Trade Center attacks, a father was entitled to receive Workers’ Compensation death benefits even though, under EPTL 4-1.4, he had been disqualified as a distributee of the decedent’s estate based on abandonment (Crisman v Marsh & McLennan Cos., 6 AD 3d 899 [3d Dept 2004]).

Under Workers’ Compensation Law §16(4-b), surviving parents are entitled to a $50,000 death benefit. The administrator of the decedent’s estate successfully moved in Surrogate’s Court to disqualify the father as a distribute of decedent’s estate pursuant to EPTL 4-1.4 on the grounds of abandonment. Armed with a favorable decision from Surrogate’s Court, the decedent’s mother sought a review by the Workers’ Compensation Board to disqualify the decedent’s father from receiving half of the Workers’ Compensation death benefit based upon his abandonment of the decedent when the decedent was an infant. Nevertheless, the Board denied the mother’s request and directed $25,000 in death benefits to be paid to each parent.

Upon appeal to the Appellate Division, the Court held that the Workers’ Compensation statute provides that where an employee is not survived by a spouse, child or certain other disabled or dependent individuals, the employee’s death benefit shall be paid to the deceased’s surviving parents. The Court held that absent any qualifying or limiting language, the Workers’ Compensation Board did not have authority to carve out an exception and exclude a parent who abandons his child. The plain terms of the Workers’ Compensation Law unequivocally provide for payment of a death benefit to the decedent’s surviving parents.

Similarly, a father who abandoned his son was also entitled to life insurance proceeds (Estate of Benjamin Joseph Bortzfield, 2006 NY Misc LEXIS 9769 [Sur Ct, Suffolk County January 5, 2006]). In this case, the decedent died intestate and was survived by his parents. The decedent’s life was insured through his employer, but he failed to designate a beneficiary for the policy. The policy provided that where no beneficiary is designated, the benefits would be paid in equal shares to the surviving (1) spouse; (2) children; (3) parents; or (4) brothers and sisters. The decedent was unmarried and had no children, therefore his parents were the beneficiaries of the policy.

The insurance company commenced an action in the United States District Court for the Eastern District of New York to resolve the conflicting claims by the parents. The parties entered into a settlement agreement which provided that the mother would receive one-half of the policy amount and the other half would be held in a separate account until the Surrogate’s Court action concluded.

The decedent’s mother sought to have the father disqualified under EPTL 4-1.4 on the grounds that the father had abandoned their son. The policy did not define or qualify the term “parents,” so the Surrogate’s Court construed the term using its “usual and commonly understood meaning.” As such, the Court held that even a father who abandoned his child was still a parent. The Court ruled in favor of the father and awarded him his share in the life insurance proceeds.

The bottom line here is that, although a parent can be disqualified from inheriting a deceased child’s estate on the grounds of abandonment, he/she may still inherit Workers’ Compensation death benefits and life insurance proceeds. These decisions turn on highly fact specific analysis and often detailed factual evidence submitted by both sides. Because of this, practitioners and parties are well advised to prepare for an adversarial evidentiary hearing at the outset.

Contributed by Jacque K. Vincent

Excluding a Parent From Sharing in a Child’s Estate Part 2- Failure to Support

Under EPTL 4-1.4(a)(1), a parent is disqualified from inheriting from a child who the parent either abandoned or failed to support during the child’s lifetime.

Failure to support and abandonment are separate and distinct grounds. Proof of either will cause the parent to be disqualified under EPTL § 4-1.4(a)(1) unless the parent-child relationship is resumed before the death of the child. The party seeking disqualification must prove that the failure to support the child or abandonment was a voluntary or deliberate act. The burden of proof is on the party asserting disqualification. Neither “failure to support” nor “abandonment” is defined in the EPTL.

The duty to support is founded on the obligation in accord with Family Court Act §413, where the inquiry by the court is whether a respondent had sufficient means or the ability to earn such means to support the child and failed to do so in contrast with a mere unwillingness to perform the parental obligation. The general criteria applied in these cases is: (1) the duty to support, (2) the ability to provide the support, (3) grounds, if any, for relief from the duty.

Failure to pay child support can preclude assertion of the right to a distributive share of a deceased child. In re the Estate of Baecher, 198 AD 2d 221 (2d Dept 1993), a child’s mother asserted that the child’s father should not share in the deceased child’s estate due to the father’s alleged failure to pay child support. The parents were divorced at the time that the child was age 10, and the decree required the father to pay child support. The father urged the Surrogate to find that he had supported his child and that he paid support. The Surrogate rejected his claim after a trial where the decedent’s brother and mother testified as well as the decedent’s father. The father acknowledged that he did not make all support payments and contended that this was so because of a lack of income due to unemployment which caused him to stop payments. He claimed that he paid for substantial dental expenses, made undocumented payments, and that a court appointed referee that sold the marital home made payments on his behalf. The Surrogate found that he failed to provide support for his child. On appeal the Second Department agreed, finding that the father’s testimony that he made undocumented payments was not credible.

The rule is the same in the Third Department. In re the Estate of Brennan, 169 AD 2d 1000 (3d Dept 1991), arose from a determination of the Greene County Surrogate who determined that the deceased child’s father was not entitled to share in any proceeds from a wrongful death action involving the decedent. In that case the decedent’s father was successful in convincing the court that he did not abandon his child, however, on appeal the court affirmed that part of the underlying decision which found that the father had failed to provide for his child.

In his losing bid to share in his child’s estate the proof offered was that the father made about $350 in child support payments over ten years, despite an order requiring him to pay $25 a week. He urged that he had given his son presents, but they only amounted to three or four over that period. The father argued he was unable to support his son, but the proof was that he either was employed or received unemployment benefits when his efforts to support his child were meager at best. Finally, he argued that he had no obligation to support his son because his former spouse had remarried, and the new husband voluntarily assumed the support of the child.

Finding that to be meritless, the court held that the statute denies inheritance rights to a parent who has reneged on the parental obligation to support his child, and that disability cannot be cured by the fortuitous fact that another person supported the child while under no obligation to do so.

The rule is not insurmountable. In Matter of Ball, 24 AD 3d 1062 (3d Dept 2005), Lukas Ball died while in daycare. Both of his parents made application to the Surrogate for limited letters of administration to commence a wrongful death case.

His mother sought to disqualify the father from any taking under the intestate share arising from a wrongful death action on the grounds that the father abandoned and failed to support Lukas during his lifetime. Both made applications for summary judgment and ultimately, an evidentiary hearing was held.

Lukas was conceived after a four-month casual relationship and the mother and father had never married. His mother notified his father of her pregnancy at the end of their four-month relationship. Doubting that Lukas was his child, due to his inability to conceive a child with his ex-wife and his prior exposure to radiation, he had an angry conversation with the child’s mother and ceased contact at her request. When Lukas was born, his mother listed no one on the birth certificate or Medicaid application. Six months after birth the father was notified of the birth by the mother’s attorney.

The father immediately contacted the mother, set up a visit and saw the decedent in a matter of days. At the visit he gave her money. Thereafter, he contacted the county DSS in order for the decedent to receive benefits due to the father’s status. He admitted paternity in connection with the applications. In connection with a support case brought by the mother, he voluntarily gave a blood sample, and an Order confirming paternity was issued. He saw the child a second time and attempted visits but was denied access.

Unfortunately, the father’s efforts failed, and the Surrogate found that the father’s failure to disclose a Workers’ Compensation settlement award was sufficient evidence on which to find that he had failed to adequately support his son.

On appeal, the Surrogate’s decision was reversed. Critically, the Appellate Division reviewed the record in its entirety and found that the father could not have contacted his son prior to knowing that he was born, and further, that all of the father’s claims concerning the denial of access to his son were the same as those contained in his petition for custody in family court. The decision of the Surrogate was reversed as to the father’s disqualification to receive an intestate share of his son’s estate.

Read Part 3: Excluding a Parent From Sharing in a Child’s Estate Part 3- Abandonment.

Contributed by Jacque K. Vincent, J.D.

Excluding a Parent from Sharing in a Child’s Estate

This issue arises in cases involving minor children as well as adult children. Sadly, prior to September 11, 2001, most cases involved ordinary negligence, medical malpractice and wrongful death circumstances. As a result of the deaths at the World Trade Center, more cases were reported involving the deaths of adult children who died at work. Most cases involve decedent’s who die intestate. However, a recent case deserving some attention is In the Matter of Martirano (2018 NYSJ LEXIS 4306, Sur Ct, Ulster Co, April 12, 2018) which involved the death of an adult child with a will.

The “child” in the case would have been 52 years old at the time of the Court’s decision. The Decedent died quite young, at age 48 and left an estate valued at about $1,000,000. His will was witnessed by the will’s primary beneficiaries. The Court found their bequests to be invalid under EPTL 3-3.2(a)(2). Under EPTL 3-3.2(a)(2), a disposition made in a will is void where the will cannot be proved without the testimony of the witness to whom a beneficial disposition is made.

Since the disposition made in the will was void, the estate passed by intestacy. Where the property of a decedent is not disposed of by a will, the property will be distributed pursuant to EPTL § 4-1.1. Under EPTL § 4-1.1(a)(4), if a decedent is survived by one or both parents, and had no spouse or children, the estate goes to the surviving parents. This set up the scenario that the decedent’s mother, Linda, was his sole distributee and stood to inherit everything.

When he learned of this outcome, the decedent’s older brother, Michael, asserted that their mother abandoned her children and therefore was barred from inheriting due to parental disqualification. His argument was based upon an application of EPTL 4-1.4(a)(1), which imposes an equitable penalty on a parent found to have forsaken his or her parental obligations.

Michael petitioned for declaratory relief. He offered Catholic Welfare Bureau records covering the decedents years in foster care. They stated that the decedent was abandoned by his mother at a bus terminal, that she found it impossible to care for him, and that she was a depressive person who took off with another man during her husband’s imprisonment.

The Court’s decision follows the life of this fractured and tattered family from the 1960s, when a child was born in “disgrace” to Linda at age 15, and she married the child’s father who was in and out of jail. She could not afford rent and they lived on welfare and with friends. When Linda left the children with relatives, they refused to return them to her. She did not go to court or seek the police for their assistance in the return of her children.

Years went by with sporadic telephone contact until the children were found alone in a department store. They were placed in the custody of Catholic Charities at an orphanage and became wards of the court. Linda sought their return and was denied. Ultimately, she cleaned up her act and was given custody of some of the children but not the decedent.

In this case, the Court did not consider all of the very detailed factual information on the motion because the Court found the evidence to be hearsay. Hearsay evidence may be considered in opposition to a motion for summary judgment, but only where it is shown that the defect is curable at trial. As decedent’s brother did not offer any excuse as to why the materials were not in admissible form or how he would produce the materials in admissible form at trial or otherwise offer alternative proof, the evidence was not considered. He was stuck, as he candidly admitted that he had no memory of the events. In the end the only person with personal knowledge was decedent’s mother.

The Court’s 16-page decision is very detailed and very fact specific and despite many facts against her, the Court found that Linda did not abandon her son and she did not fail to support him. The decision is a must read for a practitioner faced with either prosecuting or defending claims of abandonment or failure to support.

Sadly, there are many cases where parents return to their deceased children’s lives in connection with the potential rewards associated with wrongful death actions or lucrative estates. In many cases the parents do not prevail in their efforts to share. Matter of Martirano is different and therefore, instructive. It is also requires consideration in connection with the difficulties of proof in these cases, particularly, adult child cases.

We will have to follow this decision if it makes its way to the appellate division.

Read Part 2: Excluding a Parent From Sharing in a Child’s Estate Part 2- Failure to Support.

How the Safe Act Impacts the Transfer of Firearms In an Estate

Inheriting a firearm can be a complicated process. A fiduciary of an estate cannot just give the firearm directly to an heir without the risk for potential criminal liability. Unlike other personal property, passing firearms on to a loved one after the death of the owner has its own unique rules and can be a challenge to the estate’s fiduciary if not specifically addressed during the estate planning stage.

New York’s Secure Ammunition and Firearms Enforcement Act, better known as the SAFE Act, can create the risk of criminal liability for executors and administrators as well as for the estate’s heirs where the parties are unaware of the rules.

Pursuant to the SAFE Act, a fiduciary must lawfully dispose of the firearm within fifteen days after the death of the owner. If the fiduciary is unable to transfer the firearm to the heir within fifteen days, the firearm must be surrendered to a law enforcement agency. The law enforcement agency will hold the firearm until the heir is licensed or otherwise permitted to take possession. However, if the agency does not receive a request to deliver the firearm within one year of the delivery, the firearm will be deemed a nuisance and destroyed (NY Penal Law § 400.05[6]). Fifteen days is a relatively short amount of time in which to make the transfer because a fiduciary cannot lawfully transfer or dispose of a firearm until he has been appointed by the Court.

Before the firearm can be given to the heir, the fiduciary must (1) know that the decedent legally owned the guns; (2) know that the specific beneficiary of the guns may legally own a gun and (3) adhere to proper transfer procedures. The heir receiving the decedent’s firearm must hold a valid New York State gun permit. Illegal possession of a decedent’s registered firearm without following the statutory protocol for estate transfer to an heir is a misdemeanor, specifically, criminal possession of a weapon in the fourth degree (NY Penal Law § 265.01).

In addition to a state firearm permit, a federal background check is required for a firearm to be transferred. But there is an exception to his rule when it comes to transfers between immediate family members such as spouses, domestic partners, children and step-children (General Business Law § 898).

Contributed by Jacque K. Vincent, J.D.

Do I Need to Pay a Bequest if the Beneficiary Owes the Estate Money?

A fiduciary has a legal obligation to make distributions to the beneficiaries of the estate. But what happens when a beneficiary owes the estate money? Does the law permit the fiduciary to offset the bequest with the debt? Or does the fiduciary have to first make a distribution and then sue the same beneficiary to recover the funds to pay the debt?

As a practical matter, one would assume that an offset is permitted. However, at first blush, the EPTL and SCPA do not appear to address the issue. They provide a beneficiary with the right to compel payment. But they do not expressly provide that a fiduciary may assert defenses to payment (see EPTL § 11-1.5; SCPA § 2102 [4] [“A proceeding may be commenced to require a fiduciary … to deliver a specific bequest or property to a person entitled thereto or to pay a legacy…”]). The only defense in the statute appears to be the timing of the payment: under EPTL § 11-1.5(c), a beneficiary generally must wait at least seven months from a fiduciary’s appointment before demanding payment.

The procedural rules of the SCPA and CPLR nevertheless permit a fiduciary to file an answer and assert defenses when the beneficiary commences a proceeding to compel payment. The fiduciary therefore has an opportunity to explain to the court why the legacy a or distributive share should not be paid in whole or in part (see 6 Warren’s Heaton on Surrogate’s Court Practice § 75.03 [LexisNexis 2019]).

In the answer, the fiduciary should therefore explain that the beneficiary owes the debt and assert this as a defense to payment. This is often referred to as the right to equitable retainer and lien (see Matter of Van Nostrand, 177 Misc 1, 7 [Sur Ct, Kings County 1941] [placing equitable lien upon the beneficial interest of a trustee/beneficiary who had embezzled trust property]; Matter of James, 149 Misc 135, 135-138 [Sur Ct, Kings County 1933]).

This defense is well settled under the case law and rests on sound principles of equity (see Matter of Eaton, 282 App Div 32, 34 [3d Dept 1953]). It is based on “a fundamental equitable principle of surrogate law that no beneficiary may claim any distributive rights from an estate until he has satisfied all of his obligations to it” (Matter of Van Nostrand, 177 Misc at 7; Matter of James, 149 Misc at 135-138 [Sur Ct, Kings County 1933]; Matter of Flint, 120 Misc 230, 232 [Sur Ct, Westchester County 1923], affd 206 App Div 778 [2d Dept 1923]; Matter of Foster, 15 Misc 175, 177 [Sur Ct, Orange County 1895] [holding that a debt is considered an asset of the estate in the hands of the legatee and a satisfaction of the legacy to the extent of the debt]).