Requesting and Preparing for the SCPA 1404 Examination in New York

There are several advantages to requesting a SCPA 1404 exam prior to filing objections. The major advantage is that the estate has to pay the costs of the exam and the stenographer fees. The exam will also provide you with the opportunity to conduct pre-objection discovery to assist in preparing objections. On the other hand, if you elect to depose a witness prior to filing objections, you generally cannot re-examine the same person again after filing objections.

If you desire a pre-objection exam, you should make this request at the first appearance and discuss a proposed schedule with the court at the same time. The schedule is generally limited to dates for pre-objection document demands and responses, the date for the exam (which will be conducted at the court), and the date for filing objections after the exam.

Prior to the exam, you should specify the witnesses you intend to examine. Such persons generally include the attesting witnesses and the person who prepared the will (see SCPA 1404 [4]).

To prepare for the exam, you should demand documents in advance, requesting the decedent’s financial records, communications, medical records, and prior wills, among other things. You should also request the case file of the drafting attorney, including billing records and any retainer agreements (see CPLR 4503 [b]; SCPA 102).

The rights to pre-objection document discovery are set forth in SCPA 1404(4), which provides that “the party conducting such examination” has “all rights granted under article 31 of the civil practice law and rules with respect to document discovery.” Generally, courts permit broad inquiry into the “three-year period prior to the date of the propounded instrument and two years thereafter, or to the date of the decedent’s death, whichever is the shorter period” (22 NYCRR 207.27).

The exam should focus on all matters relevant to the filing of objections. You should inquire about the witnesses’ involvement and relationship with the decedent, the decedent’s mental health, and the circumstances of the will’s execution, among other things.

.

Does the CPLR apply in Surrogate’s Court?

Every litigation attorney knows the CPLR. They learn it while they are in diapers in law school. Or, while studying for the bar exam. It generally governs the civil procedure in all courts of New York State (see CPLR 101). It is the equivalent of the FRCP for federal court.

What most litigation attorneys do not know is that the Surrogate’s Court has its own set of rules – the SCPA. It sets forth rules on jurisdiction, pleading, proceedings, etc. It is particularly informative on proceedings by and against fiduciaries. But the SCPA does not cover several procedural matters. It does not talk about summary judgment motion practice or general discovery matters. Where are those rules? Can you use the CPLR to fill the gaps?

This is the same question I asked myself the first time I started practicing in Surrogate’s Court. I wanted to make a motion for summary judgment and did not know if the SCPA permitted it. I then found my best friend, SCPA 102. This section allows you to rely on the CPLR in Surrogate’s Court.

But there is an exception “where other procedure is provided” by the SCPA. A similar rule is found in CPLR 101, which applies the CPLR to all civil matters “except where the procedure is regulated by inconsistent statute.”   

So, yes, you can generally use the CPLR to fill the gaps in the SCPA. But before you do, you will need to compare the CPLR with the SCPA to make sure the exception from SCPA 102 does not apply.

Practice Tip: You can search the case law to see if the courts have applied a specific provision from the CPLR in Surrogate’s Court. In your legal database, search for the particular provision (e.g., “CPLR 3212”) along with the phrase “Surrogate’s Court”.

Game Day in Surrogate’s Court: Knowing the Rules in Estate Litigation

If litigation were a sports game, the civil procedure would be the equivalent of a playbook. It provides each side with a set of rules (plays) to use to win the game. For offensive players, it sets out the plays to start a case and obtain discovery materials to run the ball down the field and score big. For defense players, it shows how to slow down the game, stop the other side from advancing the ball, and obtain an early victory.

So, what is the playbook in Surrogate’s Court? Well, using the sports analogy, image if sports rules were created by lawyers. What would they look like? Well, there would be multiple playbooks, with different books for each stadium. On top of that, there would also be rules interpreting the rules. Now, all of this would be scattered around in numerous sources and you would have to consult them all at the same time to figure anything out. The rules would also change from time to time.

As confusing as it sounds, this is exactly how lawyers created the playbook for civil procedure. In Surrogate’s Court, we start with the SCPA. From there, you should consult with the Uniform Rules for the Surrogate’s Court and see if the judge has any specific rules of his or her own. You will also find additional rules in the CPLR that may help you with your strategy. Of course, you will also need to familiarize yourself with the EPTL for more substantive based rules.

Practice Tip: The SCPA can be quite overwhelming for the beginner. To make it easier to navigate through, I recommend using the table of contents to find the rules applicable to your issue.

The Great Wealth Transfer

About 45 million U.S. households will transfer over $68 trillion in wealth over the next 25 years.

On November 20, 2018, CNBC reported that baby boomers are the wealthiest generation in American history and that they will turn over the most wealth ever to next generations.
The article said: “yet that exchange might not be as large as you had hoped if you don’t take the right estate planning steps”. Today, we look at the CNBC topics from an estate litigation perspective. Pitfalls of some potentially good advice are offered here. This is intended to be a helpful high level consumer guide for people considering acting on suggestions offered by CNBC’s journalist MacKenzie Sigalos in her recent article . We follow her topic headings here.

Preservation

The first point made in the CNBC piece was that you should ensure there’s still some wealth to pass down. In our practice we are often exposed to client problems exacerbated by procrastination. Delays in coming to grips with one’s mortality and the decisions associated with the inevitable can erode the base of wealth built over years of hard work and careful savings. Risks of dementia or a more catastrophic illness can crush or destroy the ability to plan by a loss of capacity. Time is often an important requirement of a well thought out plan. Great estate plans often need time to evolve and work to preserve, gift or unfold wealth accumulated over a lifetime.

Preservation can be ruined by risks of loss. Do consider whether adequate insurances are available. Insurance comes in many forms to address a host of risks. Health, life, liability and long term care insurances must all be considered. Insurance costs are often thought to be high, but it is often well worth the cost when asset protection or wealth preservation is at risk. For example, long term care costs can quickly consume all assets. An auto accident where you are at fault can create liability in excess of policy limits fast where someone is seriously hurt. If your work exposes you to suits you must consider the adequacy of insurances. A proper life insurance product can often cover debts and taxes as well as make the surviving beneficiaries wealthy.

We often focus on the facts associated with the decision making of the decedent in our practice. Do they appear to have been clear minded and associated with a rational process? Were there strong and disinterested competent professional advisors involved in an effort to protect assets or preserve wealth? What was the outcome of the effort?

Death & taxes

CNBC ‘s story recognized correctly that most estates are below the current estate tax exemption. That point is pertinent to the federal rules. However, the rules can be tricky if you have made gifts or the state estate tax threshold differs from those of the federal rules.

What is the correlation between the overall value of the estate relative to its liquidity? Were strong and smart decisions made pre death as well as post death within the context of the administration of the estate? Post death, does the accounting by the fiduciary state that the assets were properly handled in order to timely pay appropriate estate taxes?

Set up a trust

This direction appears in the CNBC article with this heading. While that approach can be a positive technique for some people, sometimes funding the cost of the work to make the trust, including efforts to retitle assets into the trust, simply are not worth it for many people. A good question to ask is what is the objective to be achieved? Is the trust intended to be for asset protection – is it for protection from predators, creditors and other nefarious interlopers who may try to benefit from the grantor or her beneficiaries?

We look at the purpose for the trust. Was the intended purpose legitimate and sound? Not everyone needs a trust.

Sometimes trusts are written unclearly or contain mistakes. Some trusts are unclear as to who is intended to benefit. In those instances a construction proceeding in court before the Surrogate Judge is required. Ordinarily that focuses on the issue of the decedent’s intent at the time that the trust was signed. In many cases we represent the fiduciary and call the drafting attorney as a witness to testify under oath for the trust or estate to prove the decedent’s intentions at the time the trust was written.

Consider a living trust

This concept is promoted in the article as a suggested manner by which to avoid probate. The article stated that avoiding probate keeps your wishes private. We have seen many instances where this type of work is not done correctly or completely creating a nightmare for the survivors. Trusts must be properly funded in order for them to work. Unfunded or partly funded trusts present a problem. It often culminates in both a probate proceeding as well as a trust administration. In those instances there is no privacy and often double the legal work in the end. Sadly, the legal work that had been done earlier in connection with the living trust is often of little to no value to the client and her survivors.

In one case, we found that the trust had been fully and properly set up, and the attorney’s legal file closed. When the decedent died it was discovered that a deed was never prepared to transfer the home from the decedent’s name to the trust during her life. This defeated the exact purpose of the trust, as it was intended to hold the house and then pass it on after the decedent’s death to the survivors.

We find that the living trust requires a high degree of continuing attentiveness to ensure that all assets are transferred in it. Otherwise, assets that remain outside the trust may be found to pass to unintended persons.

Our Conclusions

With all of this wealth soon to pass there are many opportunities for good intentions to go awry. Surely this will lead to lawsuits and challenges to good solid estate plans where great work of highly competent planners will be successfully defended. It is crucial that lawyers doing the estate planning and their clients remain highly focused on the desired outcome and objectives of their work together. When we defend estate planning work we find that very often the best work is that tailored for the individual client. Estate plans are personal. Where the legal work is carefully done by a planner to state the instructions of the decedent on the documents the outcome is usually very good. The passage of this great wealth in America will not be without challenges. It is important for the consumer to remember that there is no one size fits all in the estate planning practice.


Who Are Your Relatives? Prince’s Music and His “Son”

The Artist Formerly Known as…

The news headline of November 21, 2018, says: “A guy who has claimed to be Prince’s son has filed documents with the estate declaring he plans to sue for a piece of Prince’s fortune.”

In estate litigation it is not uncommon for the parties to learn of new and different potential relatives. The interesting legal question often is whether or not the person is really a relative and if so, what is the significance of the claimed relationship. Many cases involve claims attempting to test the limits of the definition of the legal term known as “issue”, which is generally thought to be a person’s children or other lineal descendants such as grandchildren and great grandchildren. However, the term does not mean all relatives, but only the direct bloodline.

So, in Prince’s case Ogeda Patrick filed a notice with the estate stating that the estate has erroneously and continually omitted him as the true heir to the Prince estate. It seems that Patrick’s claim is that because he asserts that he is Prince’s son, he inherits from Prince’s estate because he fits in the class of Prince’s issue.

We understand Mr. Patrick’s purpose in making his claim that he has an interest in the estate. In August, more posthumously released music was turned out by Sony Legacy Recordings. The estate has indicated that it will release corresponding videos. Prince was an interesting and talented artist. In the legal environment he was known to be vocal and active in his efforts to protect his music and to remove unauthorized uploads of his music on the internet. Perhaps the artist’s protective actions will drive up the value of his estate.

Understanding Mr. Patrick’s motivation, what threshold obstacles would he face in his effort to share in Prince’s estate if it were in New York? First, was paternity established in Prince’s lifetime? Was there a blood genetic marker test administered to Prince? In order to be admissible in evidence the test must have been administered to Prince prior his death. Is there other evidence that supports the test result? Was there a lawsuit commenced to determine the paternity before Prince’s death? In New York the law allows nonmarital children to inherit from their father and paternal kindred if paternity is established by clear and convincing evidence and the father of the child has openly and notoriously acknowledged the child as his own.

In 1984 Prince released his most famous work, the album Purple Rain. He explained the meaning of “Purple Rain” as: “When there is blood in the sky – red and blue = purple…purple rain pertains to the end of the world and being with the one you love and letting your faith/god guide you through the purple rain.” In Mr. Patrick’s case perhaps, we will one day soon know much more of the details surrounding Prince’s lyrics about a Saturday night – I guess that makes it all right – Little Red Corvette.

An Interview with an Estate Litigation Attorney

Q. What is an Estate Litigation Attorney?

A. An estate litigation attorney handles disputes in court after a person passes away. Those disputes may concern the validity of a will or trust. They may concern allegations of theft from the deceased person or the estate. Or they may involve proceedings to discover information. These are just a few of the many disputes that arise.

Q. What are some of the daily activities of an Estate Litigation Attorney? 

A. This will depend on the type of dispute and the client involved. The daily tasks often involve preparing pleadings, court conferences, conducting depositions, preparing discovery demands and responses, document review, settlement talks, motion practice, hearings, and trials.


Q. In which courts do you normally work?

A. An estate litigation attorney practices in Surrogate’s Court. Each county has its own court. These are often located in a large building or complex with other courts, such as the Supreme Court. The county for any given case will depend on the residence of the deceased person. We spend the most time in Surrogate’s Court in Albany, Saratoga, Rensselaer, and Schenectady.


Q. What can you do for an estate practitioner?

A. Often, the fiduciary of the estate will ask the drafting attorney to perform services for the estate. This may include filing a petition for probate or other administrative matters. When a dispute in the litigation arises, however, the estate should consider using an estate litigation attorney to assist in resolving the dispute. This may be for any number of reasons. The estate practitioner may be a material witness and unable to act as litigation counsel. Or he or she may have a busy practice or may be unfamiliar with litigation. Whatever the reason, we work closely with estate practitioners, handling the litigation matters (discovery, appearances, settlement talks, hearings, etc.), permitting them to focus on the estate administration aspects of the case.


Q. What can you do for someone who disagrees with the estate?

A. Yes, we also serve many persons who want to challenge the estate or defend against litigation brought by the estate against them. We can file objections or an answer on your behalf. We can obtain discovery and depose witnesses to ascertain facts. We can cross-examine witnesses and represent your interests during the hearing or trial. We can also defend you in litigation commenced by the estate against you to recover funds or other property. These are just some of the many ways we can assist you.


Q. How much does it cost?

A. The cost of each case varies depending on the nature of the litigation, the amount involved, and the anticipated time necessary to perform the services. We work with clients and can provide cost estimates and a breakdown of the anticipated services.

Why a Trust and Estate Litigation Lawyer is a Critical Part of Your Team.

1. You have a lawyer for your personal matters and perhaps for your business. Many people have strong relationships with excellent lawyers that they trust. Trusted advisors should be relied on to work with subspecialists in order to make certain that your rights are protected. In some instances, people may attack the fiduciary and his conduct. They claim that their inheritance was defeated due to a fiduciary breach of duty or mismanagement, and they may seek to deny the fiduciary earned commissions. Estate litigation attorneys will protect your rights, whether you are looking to defend or, alternatively, challenge the actions of the estate attorney and others involved in the decedent’s estate planning.
2. You want answers and perhaps not a fight. The law clearly allows for this approach and if you are not careful your efforts will be perceived incorrectly or as a fight. Beneficiaries and distributes have an absolute right to ask: Why? With the proper guidance answers can be obtained without a full-blown fight.
3. The decedent told you or the estate attorney that there would be problems. Problems often originate from individuals likely to complain, estranged relatives, family or friends, caregivers and sometimes even charities.
4. Your instinct that something is off or simply not right is often correct. Many clients cannot state with exact certainty what is wrong, but they know something is not right. For example, many clients are appointed as the Executor only to find that they are faced with attacks on the estate, hostile creditor claims or worse yet, a sibling who claims that the deceased parent deeded the family house in its entirety to that sibling before death.
5. You acted as the decedent’s power of attorney during her life. Now, on her death all of your hard work and faithful service is being unfairly scrutinized and criticized by people who were nowhere to be found during all of the times of decedent’s need.
6. The decedent’s power of attorney abused the power of attorney powers. Sadly, this unlawful misconduct is common and often gets past the survivors. In many cases the power of attorney is used to make gifts to oneself, family or others. In other cases, the power of attorney is used to take money out of decedent’s bank accounts in manners that abuse the trusting relationship. In some instances, the power of attorney is used to retitle assets from the name of the decedent into the power of attorney’s name alone.
7. The estate attorney is called upon to testify. The law in New York allows persons who may object to a will to require the attorney draftsperson and the subscribing witnesses, as well as the nominated executor to testify under oath in the courtroom with the Surrogate Judge present as to how the will came about and the circumstances of the signing. Another instance where this arises is where the estate seems to be far along and wrapping up and a financial accounting of the affairs of the estate is being scrutinized. While the first witness in court is often the fiduciary, the lawyer handling the estate may be examined as a witness with respect to her actions and her fees. An estate litigation attorney can help prepare the estate attorney and other witnesses to testify and present a strong case.
8. There was a divorce. Your parents divorced many years ago and that matter has long since been closed. The decedent, your father or mother, remarried a person with another family, i.e., often their children. On your father’s death, his surviving spouse asserts that there is nothing in the estate for you. In fact, you are provided with a copy of his will and it states that everything passes to her – his loving surviving spouse. On its face the answer sounds plausible, however, the trap for the unwary is failing to ask what your father’s separation agreement or divorce decree may say with respect to how he may have provided for you on his death in connection with his divorce from your mother.
9. The gross estate simply seems too small. You may be the fiduciary tasked with handling the estate and you sense that assets may be missing or undisclosed. It seems that bank statements may be missing or that there are actually items of property that you believed the decedent to own that are in the possession of others. A legal action or lawsuit can be commenced to recover that property or to discover the true facts as to the missing assets.
10. Life and insurance and other assets with designated beneficiaries. A very common approach to planning the modern estate is to utilize life insurance and designate beneficiaries for it as well as for 401k and other retirement assets and accounts. The beneficiary designation transactions generally require a higher degree of capacity on the part of the decedent. The standards are not simply those that relate to wills, but rather are what are commonly referred to as the contract standard, rather than testamentary standard. Sometimes this legal standard makes it more difficult to defend the validity of the transactions. Sometimes signatures are unwitnessed and forged. In those cases, the beneficiary designations are highly susceptible to challenge and more difficult to defend.

The Possible Grounds to Object: Fraud

Another possible objection to probate is fraud. The Objectant has the burden of proof on this objection. “To establish fraud, it must be shown that the proponent knowingly made a false statement that caused decedent to execute a will that disposed of his [or her] property in a manner different from the disposition he [or she] would have made in the absence of that statement” (Matter of Clapper, 279 AD2d 730, 732 [3d Dept 2001], quoting Matter of Coniglio, 242 AD2d 901, 902 [4th Dept 1997]).

Prior to filing objections, you have the option to conduct a SCPA 1404 exam. This is your opportunity to explore a possible fraud objection. At the exam, you should inquire about statements made to the decedent by the testifying parties and others. You should also inquire about the truthfulness and the materiality of the statements and their effect on the decedent.

If you uncover evidence of fraud, you should assert a fraud challenge in your objections, along with the allegations supporting the elements of it, with references to the false statements, the persons who made them, and the dates or time periods when the statements were made. If the statements may have affected only a portion of the will, you may want to allege in your pleading that specific portions of it (as well as the entire will) are invalid as a result of the fraud.

Even if you do not have strong evidence of fraud at the early pleading stage of the proceedings, you should still assert the fraud challenge in your objections to preserve it for later. You should have the opportunity during post-objection discovery to question additional witnesses, including the beneficiaries and named fiduciary, about possible false statements and their effect on the decedent.

If after discovery there is no basis to continue a fraud challenge, you should consider withdrawing this objection. Otherwise, the Surrogate’s Court will likely dismiss a weak fraud challenge on summary judgment. Even if the estate does not seek summary judgment, asserting a weak fraud challenge beyond discovery may be a waste of trial resources, and it will distract from the stronger objections in the case.