The COVID-19 pandemic has forced litigants to wrestle with the dilemma of waiting for a jury trial or moving forward more expeditiously by way of a bench trial.  Recently, the Appellate Division, Fourth Department, and the Court of Appeals passed on the issue of undue influence arising out of a Surrogate’s Court bench trial.

In Matter of Kotsones, following a non-jury trial, the Surrogate’s Court denied a decedent’s will probate, and granted a petition to invalidate the decedent’s lifetime trust and certain lifetime real estate transactions.  The Surrogate’s Court determined that the will, trust, and real estate transactions, all part of the decedent’s estate plan, were the product of undue influence.  The Appellate Division reversed and the Court of Appeals affirmed.  The case provides a helpful summary of the law applicable to claims of undue influence, and New York appeals courts’ power on appeals from non-jury trials.

The case turned in large part on the issue of whether the alleged undue influencers were in a confidential relationship with the decedent.  The Appellate Division reiterated the well-settled rule that where a confidential relationship exists between the beneficiary and the decedent, an inference of undue influence will arise, and require the beneficiary to come forward with an explanation of the circumstances of the transaction, to demonstrate that it was fair and free from undue influence.

The Surrogate’s Court held that the petitioner alleging undue influence had met his initial burden of establishing the existence of the confidential relationship between the alleged undue influencers and the decedent.  The Appellate Division disagreed, observing that the hallmark of a confidential relationship is inequality in power and dealing.  The Appellate Division found that while the record established that the alleged undue influencers held a position of trust with decedent, and assisted the decedent with her finances, that decedent was actively and personally involved in managing her own financial affairs, and plainly stated her motives for her actions.  The Court held that under these circumstances, the petitioner failed to meet his initial burden of establishing that the relationship of the alleged undue influencers with the decedent was of such an unequal or controlling nature as to give rise to an inference of undue influence.

With no inference of undue influence, the Appellate Division reiterated that the heavy burden of proving undue influence requires a showing of the exercise of a moral coercion, which restrained independent action and destroyed free agency, or which, by importunity that could not be resisted, constrained the testator to do that which was against his or her free will.  The Appellate Division agreed with the trial court in finding that the alleged undue influencers wanted to benefit from decedent’s estate, and that one of them assisted decedent in preparing the estate plan and effectuating the transactions in question.  The Appellate Division held that “the relevant inquiry, however, is not what [the alleged undue influencers] may have wanted, asked for, or facilitated, but rather whether decedent’s free will, independent action, and self-agency were overcome by their conduct.”

According to the Appellate Division, the petitioner simply did not carry the heavy lift of his burden to prove undue influence.   The Appellate Division found that the record reflected that the decedent played an affirmative role in effecting the disputed transactions based on her stated personal motives, and that there was no indication that she, at any relevant time, lost her free will or agency.  Among the facts that the Appellate Division found compelling in reaching its conclusion was that the decedent had direct conversations with her attorney, instructing him to revise her estate plan, and explaining her motives for her desired changes.  The court also found it relevant that numerous non-beneficiaries established the decedent’s capacity and the decedent’s active management of her own affairs during the relevant time frame (albeit with the assistance of one of the alleged undue influencers).

The Court of Appeals affirmed the Appellate Division.  However, the Hon. Jenny Rivera dissented.  According to the dissent, the Appellate Division’s decision was predicated largely on trial testimony that the decedent participated in the contested transactions and revisions to her estate plan.  But the dissent looked at other testimony in the record, which suggested that the decedent’s participation was merely the result of the alleged undue influencers’ coercive influence.  The dissent’s view was that the Surrogate, who observed the trial testimony first hand and had the opportunity to see and hear the witnesses and assess their demeanor, was in a better position to assess credibility.

While it is impossible to know how the case would have been decided if it were tried before a jury, the standard of review would have been different on appeal.   Where the Appellate Division concludes that jury has made erroneous factual findings, the Appellate Division must order new trial, since it does not have power to make new findings of fact in an appeal arising from a jury verdict.  In non-jury cases, however, the Appellate Division does have power to make new findings of fact and change the verdict. Litigants should, of course, consider this among many other factors when deciding whether to wait or to proceed to a bench trial under the current circumstances.

Following up on the question posed in a post from a few years ago: when clients ask whether they can “sue for legal fees,” the courts continue to reiterate that the answer is almost always no; that the American Rule still controls.  Recent decisions in the contexts of trusts and estates litigation and guardianship litigation speak to fee shifting and exceptions to the American Rule.

Article 81 Guardianship Proceeding

In Matter of Milton R., the Appellate Division, Second Department, reversed the Nassau County Supreme Court’s (Daniel R. Palmieri, J.S.C.) orders and judgments awarding the petitioner legal fees under a fee shifting agreement on the law and the facts.  The case was decided in the context of a Mental Hygiene Law Article 81 Guardianship application where the petitioner sought twice to remove his brother as his father’s attorney-in-fact and health care agent, and twice failed in achieving this goal.

The initial guardianship proceeding settled by way of an agreement, whereby the respondent’s role as attorney-in-fact and health care agent was undisturbed.  The agreement contained a mandatory mediation provision, and also provided that the “prevailing party” in any litigation arising out of the agreement would be entitled to recover attorney’s fees from the defaulting party.   It was not long before the petitioner took his next shot to remove the respondent as his father’s attorney-in-fact and health care agent, alleging that the respondent breached the settlement agreement by, among other things, failing to provide home health care aides for his father as required under the agreement, and refusing to mediate under the settlement agreement’s alternative dispute resolution provisions.  Petitioner sought an award of attorney’s fees pursuant to the settlement agreement’s fee shifting provisions.

The court denied the petitioner’s request to remove respondent as his father’s attorney-in-fact and health care agent.  This was no surprise, because the courts ought to afford respect and deference to a person’s advance directives in the absence of any genuine and material defalcation.  However, the court ruled that the respondent breached the settlement agreement by refusing to mediate in accordance with the terms of the settlement agreement, and as a remedy for this breach, awarded attorney’s fees to petitioner pursuant to the settlement agreement’s fee shifting provision.  Thereafter, the court conducted an inquest to determine the amount of attorney’s fees to be awarded. Following the inquest, the court, inter alia, issued money judgments to the tune of approximately $175,000.

Without much discussion, the Appellant Division, Second Department corrected the motion court’s stark deviation from applicable law.  It applied the familiar rule that where an agreement provides for fee-shifting to a prevailing party, a party will only be determined a prevailing party if it is successful with respect to the central relief sought.  This determination requires consideration of the true scope of the dispute litigated, followed by a comparison of what was achieved within that scope.  The Appellate Division Second Department determined that the petitioner achieved nothing, or at least nothing that could warrant shifting his investment of $175,000 into the litigation.  While the case is generally unremarkable, the takeaway might be that the Appellate Division did not find anything inherent in Article 81 guardianship proceedings that can justify deviation from the American Rule absent the explicit statutory exceptions in the Mental Hygiene Law or contract. The wide discretion granted to the trial courts in Article 81 Guardianship proceedings has its limits.

Trusts and Estates Litigation

Surrogate’s Court litigation often presents exceptions to the American Rule, and the Nassau County Surrogate’s recent order in the tortured estate of Oleg Cassini illustrates as much. The exceptions to the American Rule in estate litigation arise naturally because many claims against estate fiduciaries are derivative of the beneficiaries’ interests in the estate.

In Cassini, the Nassau County Surrogate cited the American Rule, but explained that in trusts and estates litigation there are circumstances where fees incurred by a beneficiary will be paid as an estate expense (as opposed to being borne by the beneficiary alone).  In certain cases, an attorney litigating on behalf of a beneficiary who has benefitted the entire estate through his or her services may be compensated from estate assets by order of the Surrogate.  This is by virtue of statutory authority, namely, Surrogate’s Court Procedure Act § 2110, which provides in subparagraphs (1) and (2), in relevant part:

At any time during the administration of an estate and irrespective of the pendency of a particular proceeding, the court is authorized to fix and determine the compensation of an attorney for services rendered to a fiduciary or to a devisee, legatee, distributee or any person interested … The court may direct payment therefor from the estate generally or from the funds in the hands of the fiduciary belonging to any legatee, devisee, distributee or person interested.

In Cassini, the Court allocated legal fees incurred by counsel on behalf of estate beneficiaries against the general estate on the grounds that it benefited the estate as a whole.  The Surrogate’s Courts have consistently followed this approach (and sniffed out and denied reimbursement of legal fees to beneficiaries who were acting for their own benefit), which can be considered an exception to the American Rule.

Further, as previously discussed by my colleagues, the Court of Appeals decision in Matter of Hyde has made it clear that the courts have great discretion to allocate legal fees in Surrogate’s Court litigation, as Surrogate’s Court Procedure Act § 2110 can be used as a fee shifting mechanism among warring parties to an estate litigation.  The Surrogate’s Courts have not been shy about exercising that discretion as illustrated by decisions that have issued since Hyde.

In the recent case Matter of Lee, New York County Surrogate’s Court granted a motion for summary determination that decedent’s father was disqualified as a distributee and beneficiary for failure to support decedent pursuant to EPTL 4-1.4 (a)(1) (Matter of Estate of Lee | NYLJ, Apr. 2, 2021, p.22, col 3 [Sur Ct, NY County 2021])

The court noted the tragic underlying facts. Decedent died at age 14, survived by his divorced parents. Decedent’s mother, who was the custodial parent and administrator of the estate, petitioned for the father’s disqualification and moved for summary judgment.

EPTL 4-1.4 (a)(1) provides two separate grounds for disqualification. A parent is denied a distributive share if he or she (1) fails to support, or (2) abandons the child while the child is under the age of 21, “unless the parental relationship and duties are subsequently resumed and continue until the death of the child” (id.).

The issue in Lee was not abandonment, but failure to support. Notably, a parent’s ability to pay support is essential to the calculus in determining disqualification on this ground pursuant to the statute.

The Surrogate’s decision relied on the Family Court’s 2008 determination of respondent’s support obligations after a hearing at which movant and respondent could present evidence and testify. The same Family Court decision held that respondent had willfully refused to pay child support and disallowed any downward modification of his support obligations. Movant showed that respondent owed a total child support arrears in the sum $74,294.49, and had paid only $3,955 for child support during the last five years of decedent’s life.

The court found that movant satisfied her burden that respondent not only failed to support decedent because he was unwilling, but never resumed payment to the extent of his ability prior to decedent’s death.

In opposing the motion, respondent contended that: (1) his support obligation fixed by the Family Court was inaccurate because it neglected the fact that he had no income during his incarceration in Afghanistan before his release in 2006; (2) movant sought to alienate him from decedent; and (3) the Family Court was biased against him based on his sexual orientation.

Applying the doctrine of res judicata, the court declined to take a second look at the propriety of respondent’s support obligations. However, it stated that the doctrine, which should not be mechanically applied, may allow a court to subsequently “examine a variety of non-exclusive factors to determine the preclusive effect, if any, of a prior judgment,” such as a significant change in law.

The “significant change in law” was the 2010 amendment to the Family Court Act § 451(3)(a) which allows modification of a child support order “upon a showing of a substantial change in circumstances.” Specifically, the amended law provided the following:

Incarceration shall not be considered voluntary unemployment and shall not be a bar to finding a substantial change in circumstances provided that such incarceration is not the result of non-payment of a child support order, or an offense against the custodial parent or child who is the subject of the order of judgment (Matter of Lee, supra).

Although this provision can be applied “retroactively [] to the date of filing of the petition to modify” (id.), the Surrogate found that respondent never followed through his petitions to modify the 2008 support determinations, and therefore, the court was restrained to find respondent’s claim barred by res judicata.

The Surrogate rejected respondent’s remaining arguments, finding that the alleged bias and alienation could have been raised in the Family Court or in an appeal. The court further found that the Family Court’s determination dispensed with the need for a hearing to determine respondent’s ability to pay, and movant’s ability to provide for decedent was no defense against respondent’s failure to support. Accordingly, the court held that respondent failed to resist the motion.

 

When thinking of the Surrogate’s Court, jurisdiction over eviction proceedings does not normally come to mind. Yet, over the past 18 months, the Surrogates of New York and Bronx counties have found cause to order an eviction from estate or trust property in order to facilitate its sale. Consider the following:

In In re Jenkins, 2020 NYLJ LEXIS 1723, the Surrogate’s Court, Bronx County, was confronted with an application, characterized as the equivalent of a proceeding pursuant to SCPA 1902, to sell the decedent’s interest in a parcel of realty, and to evict the decedent’s grandson from the premises. The application was supported by two of the decedent’s granddaughters. However, it was opposed by the decedent’s grandson, who stated that he wished to buy the realty, but for a price less than the contract price.  The court noted that courts have liberally granted SCPA 1902 (1), (6) and (7) applications to sell realty over the objections of some of the co-tenants in common who derived their interest in the realty from the decedent, provided that there is a sufficient nexus between the relief requested and the administration of the decedent’s estate.

The record revealed that the decedent died on August 18, 2006 owning several parcels of realty. Letters of administration issued to her son on June 12, 2007. Thereafter, one of the decedent’s granddaughters commenced a compulsory accounting proceeding in October, 2015 not only seeking an accounting for almost a decade of stagnation, but more importantly for payment of her distributive share.

In view of the foregoing, and the delay in administering and distributing the estate for the 14 year period since the decedent’s death, the court, although sympathetic to the decedent’s grandson, granted the petitioner’s application, and issued a warrant of eviction, which was stayed for thirty days in order to allow the grandson to vacate the premises voluntarily.

Prior to the decision in Jenkins, the Surrogate’s Court, New York County, (Anderson, S.) in In re Flender, 2019 NY Slip Op 33676(U), issued a warrant of eviction from trust property finding that it was in the best interests of the beneficiaries, and in keeping with the intent of the testator.

The subject proceeding had been commenced by the co-executors and co-trustees of the estate against the decedent’s daughter, her companion, and their two children. The decedent’s daughter opposed the application alleging that the executors had withheld a distribution of funds to which she, and/or a trust for her benefit, was entitled, and thus, effectively deprived her of her right to purchase the premises within the time frame authorized under the decedent’s will.  After denying the petitioners’ motion for summary judgment, the court held a three day evidentiary hearing to determine whether the daughters’ failure to purchase the property was due to petitioners’ abuse of discretion as trustees of trusts in which the daughter had a beneficial interest.

In determining that the petitioners acted properly in denying the daughter certain requested distributions, the court first considered the provisions of the decedent’s will which directed that the property be sold. Secondly, the court recognized that the will of the decedent expressly conferred absolute discretion on the petitioners as to how and when to invade the trust principal with which they were entrusted. The court noted that while this discretion could not be abused, where a fiduciary’s discretion is exercised in good faith, it may not be superseded by a court’s own sense of what might be wiser or fairer. Assessed within this context, the court found that there was no evidence of bad faith or misconduct in the petitioners’ refusal to make a substantial invasion of trust principal in order to enable the daughter to purchase the subject property, which was demonstrably beyond her means. Indeed, it appeared that the daughter would have been unable to maintain the property even if she obtained the requisite funds to satisfy the purchase price.

As such, the court found the record amply supported the petitioners’ conclusion that the daughter and other trust beneficiaries would be better served by avoiding depletion of the trust assets in order to enable the daughter to continue to reside in the property. In fact, the court observed that the decedent’s direction in his will that the premises be sold soon after her death reflected her intention that the property be utilized as a source of liquidity for his children’s trusts, an objective that would have been undermined by a reduction of the trust funds in order to accommodate the daughter’s requested invasion of principal.

Accordingly, the court granted the petitioners’ application, and directed a turnover of the premises, and that an order be settled providing for the issuance of a warrant of eviction.

Given the travel restrictions that have arisen during the COVID-19 pandemic, it is unlikely that many recently-commenced adult guardianship proceedings have led to jurisdictional disputes in courts in different states.  Pre-pandemic, however, in anticipation of commencing adult guardianship proceedings, parties moved the subjects of those proceedings from one state to another, presumably to gain a strategic advantage in forthcoming guardianship disputes.  Indeed, this happened so often that a majority of states in the Nation enacted a uniform law in order to address it.  This blog post addresses the New York version of that uniform law, and a New York case applying it to an interstate guardianship dispute, both of which are likely to be relied upon as pandemic-related travel restrictions ease, and interstate guardianship disputes become more common than they are at the moment.

The Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act (“UAGPPJA”) is intended to “resolve jurisdiction issues in guardianship proceedings when two states have connections with the individual over whom guardianship is sought” (see Matter of J.D.S., 70 Misc3d 556, 558 [Sur Ct, New York County 2020]).  UAGPPJA does so by “providing a more streamlined and predictable process, saving state funds and conserving judicial resources, and reducing the possibility for abuse and expense of the alleged incapacitated person and that person’s family and caretakers” (see id.; Schwaber & Kafer, P.C. v Alpizar, Index No. 157599/2020, 2021 WL 408231, at *2 [Sup Ct, New York County Feb. 5, 2021]).  A majority of states in this Country have adopted UAGPPJA (see J.D.S., 70 Misc3d at 558).

As effective on April 21, 2014, New York’s version of UAGPPJA is codified in Article 83 (“Article 83”) of the Mental Hygiene Law (“MHL”) (see MHL § 83.01).  Article 83 applies to adult guardianships that parties commence under Article 81 of the MHL and Article 17-A (“Article 17-A”) of the Surrogate’s Court Procedure Act (“SCPA”) (see MHL § 83.15; SCPA § 1758[1]).[1]

In Matter of J.D.S., New York County Surrogate Rita Mella rendered what appears to be the first reported decision addressing whether a court in New York, or another state, was the appropriate forum for a guardianship dispute concerning a person under a disability (see J.D.S., 70 Misc3d at 557-65).  The proceeding concerned J.D.S., a thirty-five year-old respondent whose parents were divorced (see id.).  Prior to 2016, J.D.S. lived with his mother for the majority of his life, including a significant period of time in North Carolina (see id.).  In 2016, J.D.S. moved to New York to live with his father and stepmother (see id.).  In 2018, J.D.S. left New York to live with his mother (see id.).  In July 2018, the father filed a guardianship petition in North Carolina, which prompted the mother to do the same and ultimately gave rise to a consolidated guardianship proceeding in that state (see id.).  In September 2018, the father and stepmother commenced an Article 17-A guardianship proceeding, and petitioned for “a determination that New York is J.D.S.’s home state”, in New York County Surrogate’s Court (see id.).  In November 2018, a North Carolina court clerk advised the Surrogate’s Court that a North Carolina court had determined (a) North Carolina to be a “significant-connection state” under UAGPPJA, and (b) New York to be J.D.S.’s “home state” (see id.).  Surrogate Mella then held a hearing to determine whether to “exercise jurisdiction over this guardianship proceeding or if North Carolina . . . is the more appropriate forum” under Article 83 (see id.).

Based upon the evidence presented at the hearing, Surrogate Mella determined that North Carolina was a more appropriate forum for the guardianship dispute involving J.D.S. (see id.).  In doing so, the Surrogate relied upon the factors set forth in MHL § 83.23: (a) J.D.S.’s “expressed preference to stay in North Carolina”; (b) the absence of any evidence of abuse or neglect toward J.D.S., or any suggestion that “North Carolina was less capable of protecting J.D.S. from harm” than New York; (c) J.D.S. had spent significantly more time in North Carolina (with his mother) than in New York (with his father and stepmother); (d) J.D.S. was located significantly closer to the North Carolina guardianship court than the New York Surrogate’s Court; (e) J.D.S.’s assets were modest, and it would be less burdensome for J.D.S. to travel to a North Carolina guardianship court than to the New York Surrogate’s Court; (f) most of the witnesses who would testify at a guardianship hearing were located in North Carolina; (g) either the New York Surrogate’s Court or the North Carolina guardianship court would be well equipped to promptly determine whether to grant a guardianship of J.D.S.; (h) although the New York Surrogate’s Court had more recent familiarity with J.D.S., both the Surrogate’s Court and the North Carolina court had guardianship petitions concerning J.D.S. before them; and (i) nothing in the hearing record undermined a New York Guardian ad Litem’s conclusion that the North Carolina courts “are bound to play a more robust monitoring role than their New York counterparts under SCPA Article 17-A” (see id.).  Accordingly, pursuant to Article 83, Surrogate Mella declined to exercise jurisdiction over the New York Article 17-A guardianship proceeding (see id.).

As the first reported decision in which a New York court applied Article 83 to determine the appropriate forum for an adult guardianship dispute, J.D.S. provides an excellent roadmap for guardianship courts and practitioners who are confronted with interstate guardianship disputes.  Indeed, J.D.S. illustrates the factors that a New York court must consider in evaluating whether New York, or another state, should preside over an adult guardianship proceeding.

 

[1]             Article 83 also sets forth the process for transferring a guardianship granted in one state to another state (see MHL §§ 83.31 and 83.33).  This blog post does not address the guardianship transfer issue.

In an April 2020 post to this Blog entitled “The Remote Witnessing of Estate Planning Documents during the COVID-19 Pandemic,” my colleague Cheryl L. Erato addressed Governor Cuomo’s Executive Order authorizing the remote witnessing of wills.  Since April 2020, trusts and estates practitioners have questioned, from a public-policy perspective, how well the remote witnessing of wills works, and speculated about litigation that is anticipated to arise therefrom.

Until earlier this week, a Surrogate’s Court had not addressed the admission of a remotely witnessed will to probate.  By Decision and Order, dated January 25, 2021, Broome County Surrogate David H. Guy issued what appears to be the first reported New York decision addressing the admission to probate of a remotely witnessed will (see Matter of Ryan, 2021 NY Slip Op 21010 [Sur Ct, Broome County Jan. 25, 2021]).

In Matter of Ryan, the testator’s health quickly took a turn for the worse, causing the testator to be admitted to a hospital at a time when COVID-19 restrictions prevented visitors from entering the hospital.  As a result, the testator’s attorney’s office caused the testator’s original will to be delivered, in a sealed envelope, to the testator by a social worker at the hospital.

The testator’s counsel also arranged for the social worker to serve as a “videographer” for the testator’s execution of the will, using a cell phone camera for that purpose.  The testator’s counsel and two staff members from the attorney’s office virtually “‘attended’ and participated in the execution ceremony via a computer [in the attorney’s] office.”  Having previously received a copy of the testator’s driver’s license, the testator’s counsel and the attorney’s staff confirmed the testator’s identity during the execution ceremony.

After the testator opened the sealed envelope containing the will and reviewed the instrument, the testator affirmatively responded that “the instrument he was about to sign was his will,” and that “he wished for [the attorney’s] staff to serve as witnesses to the execution of [the]” will.  The testator signed the will, with the testator’s attorney and his staff watching the testator do so on their office computer.  “The cell phone angle was such that [the testator] could be seen signing the document in front of him.”  Immediately after the testator signed the will, “the original was driven back to [the testator’s attorney’s] office, where [the testator’s attorney’s] two staff executed the attestation clause and the witness affidavit, which had been stapled with the original will in a will cover.”

Relying upon Estates, Powers and Trusts Law (“EPTL”) § 3-2.1, Surrogate Guy found that the execution ceremony summarized above satisfied the statutory formalities for due execution of a will in New York.  The Surrogate reasoned that, although the testator “was not physically present in the same room as the witnesses, [the witnesses] were able to see him execute the will, in real time, using the cell phone camera and the computer.”  The Surrogate further reasoned that, given the COVID-19 restrictions that were in place at the time, the execution ceremony satisfied the “presence requirements” set forth in EPTL § 3-2.1.

Equally important, Surrogate Guy held that the testator’s execution of the will satisfied the provisions contained in the Executive Order authorizing the remote witnessing of wills.  The Surrogate explained that the “Executive Order anticipates that witnesses may sign an electronically transmitted copy of the signature page of the will and may, but are not required to, sign the original signature page of the will, if received within 30 days of its signature by the testator.”

While Ryan presents the first published decision in which a Surrogate’s Court addressed the remote witnessing of a will, Ryan certainly will not be the last one.  It will be interesting to see whether Surrogates in counties other than Broome County conclude that similar circumstances satisfy the statutory formalities set forth in EPTL § 3-2.1 and the Executive Order authorizing the remote witnessing of wills.

When a child is born to parents who are not married, the child oftentimes must satisfy Estates, Powers and Trusts Law (“EPTL”) § 4-1.2 (which requires, among other things, an order of filiation, an acknowledgement of paternity by the father, or other clear and convincing evidence of paternity, such as genetic-marker testing) in order to inherit from his or her father (see EPTL § 4-1.2).  However, as the Appellate Division’s recent decision in Tiwary v. Tiwary illustrates, a child born of parents who are not married at the time of the child’s birth, but who subsequently marry each other, generally need not satisfy EPTL § 4-1.2 in order to inherit from his or her father.  The reasons why are discussed below.

Under Domestic Relations Law § 24, a child born to parents who are married at the time of the child’s birth is presumed to be “the legitimate child of both” parents (see Domestic Relations Law § 24[1]).  A similar presumption of legitimacy arises when a child is born to parents who are not married at the time of the child’s birth, but who subsequently enter into “a civil or religious marriage,” or consummate “a common-law marriage where such marriage is recognized as valid” (see id.).  Where a child’s legitimacy is presumed, “the child is legitimated for all purposes of New York law,” including inheritance (see Tiwary v. Tiwary, Docket Nos. 2019-5671 and 2020-2665N, 2020 NY Slip Op 07479 at *1 [1st Dep’t Dec. 10, 2020]).

In Tiwary, the plaintiff’s mother gave birth to the plaintiff in 1973 (see id.).  Two years after the plaintiff’s birth, the plaintiff’s mother married the decedent (see id.).  At some point after the plaintiff’s birth, the decedent consented, in writing, to add his name to the plaintiff’s birth certificate as the plaintiff’s father (see id.).  When the decedent died, a dispute arose as to whether the plaintiff should be treated as one of the decedent’s distributees, since the plaintiff’s birth occurred before the decedent married the plaintiff’s mother (see id.).

Although the Supreme Court denied the plaintiff’s motions for a summary determination that he was the decedent’s distributee, the Appellate Division modified the Supreme Court’s order, holding that the plaintiff was the decedent’s marital child; and recognizing the plaintiff as the decedent’s distributee (see id.).  In doing so, the Appellate Division explained that the plaintiff should be presumed to be the decedent’s legitimate child, since (a) the plaintiff’s birth certificate constituted prima facie proof that the plaintiff’s mother and the decedent were the plaintiff’s parents, and (b) the decedent married the plaintiff’s mother after the plaintiff’s birth (see id.).

As Tiwary illustrates, a child born to parents who are not married at the time of the child’s birth, but who subsequently marry, is presumed to be a marital child.  Such a child’s legitimacy generally will be presumed for all purposes of New York law, including inheritance from the child’s father.

Stipulations of settlement often serve as the objective in Surrogate’s Court litigation, ending disputes and the ongoing expense of controversy. Towards that end, stipulations of settlement, while sometimes the subject of 20-20 hindsight by a party, are generally found enforceable. Indeed, the Court of Appeals has recognized that “[s]tipulations of settlement are favored by the courts and not lightly cast aside…Only where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation.” Hallock v. State of New York, 64 NY2d 224 (1984), citing Matter Dolgin Eldert Corp., 31 NY2d 1, 10; Matter of Frutiger, 29 NY2d 143, 149-150.

Within this context, the New York County, Surrogate’s Court, in In re Hassine, addressed a motion to vacate two pre-trial stipulations — a Joint Stipulation of Undisputed Facts and a Joint Statement of Issues (the “Stipulations”) — entered into by the movants’ prior counsel. The motion was made by the sole residuary beneficiaries of the estate during the course of contested consolidated proceedings for the settlement of the executor’s account, and to remove the executor and appoint the residuary beneficiaries as successor co-executors of the decedent’s estate.

In support of their applications, the movants asserted that the subject Stipulations should be vacated on the grounds that (1) they were the result of a mistake by prior counsel; and (2) prior counsel lacked the authority to enter the agreements. Specifically, the movants claimed that when the executor’s counsel first circulated drafts of the Stipulations, they had expressed their disagreement with some of the terms to their prior attorney, who had long represented them, and they believed that he was editing the agreements accordingly. They further asserted that after their lawyer unexpectedly left his firm, movants were not aware that the attorneys who took over the case had submitted the unedited versions of the Stipulations to the Court.

Citing the opinion in Matter of Frutiger, supra, the Court observed that a stipulation will not be set aside without a showing of good cause therefor, such as fraud, collusion or mistake. Within this context, and based on the record, the Court concluded that the movants had failed to demonstrate that any mistake had been made by prior counsel, no less identify what mistakes they claim were made. Rather, they essentially asserted that there was a miscommunication between them and the attorneys at prior counsel’s office, which, according to the Court, could have been remedied or avoided.

Further, the Court held that the movants had failed to establish that the prior firm was without authority to enter into the Stipulations. The Court noted that in executing the Stipulations, the prior firm was exercising its judgment as to the content of the agreements, which counsel was expectedly required to do in managing the pending proceedings. In view thereof, the Court held that no basis existed to vacate the Stipulations.

All too often co-fiduciaries do not see eye to eye in the administration of an estate or trust. They can usually work through their disagreements, but when they cannot, and their arguing and finger pointing have reached a level where their administration reaches a stand-still, one fiduciary might seek to remove his co-executor or co-trustee.

The grounds for removal are specifically enumerated in SCPA § 711, and they include the following: (1) at the time or after letters were issued, the fiduciary was or has since become ineligible or disqualified to act; (2) the fiduciary has wasted or improperly applied the assets of the estate, made investments unauthorized by law, or otherwise improvidently managed or injured the property in his charge; (3) the fiduciary willfully or neglected to obey a lawful court order; (4) the letters were obtained by a false suggestion of a material fact; (5) per the terms of a will or trust, the fiduciary’s role was to act upon the occurrence of an act which has occurred; (6) the fiduciary failed to notify the court of a change in address within 30 days after such change; (7) the fiduciary removed property from the state without prior court approval; (8) the fiduciary does not possess the requisite qualifications by reason of substance abuse, dishonesty, improvidence, want of understanding, or is otherwise unfit to act as fiduciary; (9) in the case of a guardian, where he has removed or is about to remove from the state or where the interests of the infant will be promoted by the appointment of another person as guardian; (10) in the case of a testamentary trustee, where he has violated or threatens to violate his trust or is insolvent or is otherwise deemed unsuitable; (11) in the case of an inter vivos trustee, where the Supreme Court could have cause to remove the trustee, or suspend or modify the appointment; and (12) where a fiduciary fails to file an account after being directed by the court to do so.

Where the orderly administration of an estate or trust comes to a standstill because of friction between co-fiduciaries, SCPA § 711(8), a “want of understanding” of what it means to be a fiduciary provides a basis for removal. But removal is not an easy task, as the courts give great deference to a testator’s choice of fiduciary. Thus, where the facts supporting the removal petition are disputed, the courts will generally not remove a fiduciary without a hearing. But this is not always the case. There are instances where the record supports removal without a hearing.

This is exactly what occurred in the recent decision in Estate of Sullivan. There, the decedent’s will nominated his siblings, James and Judith, as co-executors of his estate. James brought a petition to remove Judith as co-executor on the grounds that her refusal to engage with him—essentially abdicating her role as fiduciary—hindered his ability to effectively administer the estate. Specifically, James alleged that after he was granted court permission to sell a parcel of real property, Judith failed to share certain pertinent information with him regarding the tenants and she had maintained disorganized records of the leases, which prolonged that sale for 18 months. James also alleged that Judith frustrated his ability to see other real properties belonging to the estate by refusing he remove her personal belongings from the buildings, disputing how to list the properties for sale, and refusing to meaningfully engage in discussions with him regarding necessary repairs to the buildings. According to the decision, this deadlock continued even after counsel for James and Judith had seemingly reached an agreement on the issues during a court conference, and drafted a stipulation in that regard.

James sought to remove Judith as a fiduciary under SCPA §711(6) and (8). Judith filed objections to the petition, but the Court granted the petition and removed Judith as fiduciary withhold holding a hearing. Critical to the Court’s decision was the fact that Judith did not dispute the allegations in the petition or in James’s accompanying affidavit with any admissible evidence. She did not file an affidavit disputing any of the facts set forth in the petition or supporting her objections. Rather, she relied on an affirmation of her attorney who professed to have personal knowledge of the history of the administration of the estate. That affirmation along with a draft affidavit from Judith in which she merely “adopted and incorporated” her counsel’s statements was not sufficient for the Court. It stated:

An attorney affirmation not based upon personal knowledge has no evidentiary value. Zuckerman v. New York, 49 N.Y.2d 557, 560 (1980). While Judith’s counsel purports to have personal knowledge of the facts, it is Judith who is the co-executor and who must answer to the allegations that she has abdicated her fiduciary duties, delaying and thwarting efforts to resolve this estate.

The Court was also not satisfied with Judith’s objections to the petition, verified by counsel and not Judith, which were “sparse and evasive.” Particularly, the Court was not impressed with Judith’s denials of certain allegations because she “lacks sufficient information to form a belief” as to their truth. Indeed, a fiduciary’s very job is to personally know what is going on with the administration of an estate.

The Court found that Judith’s failure to refute the facts demonstrated her wanton understanding of what it meant to be a fiduciary, and concluded that removing her as co-executor without a hearing was proper. Additionally, the Court found that it could remove Judith without a hearing because she did not dispute that she moved and failed to give the Court the requisite notice (SCPA § 711(6)).

As our everyday life continues to be impacted by the novel coronavirus (COVID-19), Governor Andrew Cuomo has signed various executive orders to address the issues faced by the State and its residents during these unprecedented times.  In light of the executive orders that have been issued, the resulting closure of non-essential businesses, the quarantine orders and the aggressive social-distancing requirements, a recurring question being asked by both estate attorneys and their clients is: can estate planning documents be remotely executed and witnessed in accordance with New York State law?  As of April 7, 2020, the answer is clearly “yes.”

On April 7, 2020, the Governor issued Executive Order 202.14 (the “Executive Order”) which, among other things, modifies the laws concerning the execution of a last will and testament (see EPTL 3-2.1), a lifetime trust (see EPTL 7-1.17), a statutory gifts rider to a statutory short form power of attorney (see General Obligations Law 5-1514[9][(b]), real property instruments (see Article 9 of the Real Property Law), health care proxies (see Public Health Law 2981[2][a]) and an instrument to direct the disposition of a person’s remains upon their death (see Public Health Law 4201[3]).

In its relevant part, the Executive Order provides the following:

  • For the purposes of Estates Powers and Trusts Law (EPTL) 3-2.1(a)(2), EPTL 3-2.1(a)(4), Public Health Law 2981(2)(a), Public Health Law 4201(3), Article 9 of the Real Property Law, General Obligations Law 5-1514(9)(b), and EPTL 7-1.17, the act of witnessing that is required under the aforementioned New York State laws is authorized to be performed utilizing audio-video technology provided that the following conditions are met:
    • The person requesting that their signature be witnessed, if not personally known to the witness(es), must present valid photo ID to the witness(es) during the video conference, not merely transmit it prior to or after;
    • The video conference must allow for direct interaction between the person and the witness(es), and the supervising attorney, if applicable (e.g. no pre-recorded videos of the person signing);
    • The witnesses must receive a legible copy of the signature page(s), which may be transmitted via fax or electronic means, on the same date that the pages are signed by the person;
    • The witness(es) may sign the transmitted copy of the signature page(s) and transmit the same back to the person; and
    • The witness(es) may repeat the witnessing of the original signature page(s) as of the date of execution provided the witness(es) receive such original signature pages together with the electronically witnessed copies within thirty days after the date of execution.

Laws Addressed by the Executive Order

EPTL 3-2.1 provides the formal requirements for the execution and attestation of a last will and testament.  The provisions addressed by the Executive Order are copied below:

  • EPTL 3-2.1(a)(2) states “[t]he signature of the testator shall be affixed to the will in the presence of each of the attesting witnesses, or shall be acknowledged by the testator to each of them to have been affixed by him or by his direction. The testator may either sign in the presence of, or acknowledge his signature to each attesting witness separately.”
  • EPTL 3-2.1(a)(4) states “[t]here shall be at least two attesting witnesses, who shall, within one thirty day period, both attest the testator’s signature, as affixed or acknowledged in their presence, and at the request of the testator, sign their names and affix their residence addresses at the end of the will. There shall be a rebuttable presumption that the thirty day requirement of the preceding sentence has been fulfilled. The failure of a witness to affix his address shall not affect the validity of the will.”

EPTL 7-1.17 provides the formal requirements for the execution, amendment and revocation of lifetime trusts:

  • EPTL 7-1.17(a)states “[e]very lifetime trust shall be in writing and shall be executed and acknowledged by the person establishing such trust and, unless such person is the sole trustee, by at least one trustee thereof, in the manner required by the laws of this state for the recording of a conveyance of real property[1] or, in lieu thereof, executed in the presence of two witnesses who shall affix their signatures to the trust instrument.”
  • EPTL 7-1.17(b), in pertinent part, states “[a]ny amendment or revocation authorized by the trust shall be in writing and executed by the person authorized to amend or revoke the trust, and except as otherwise provided in the governing instrument, shall be acknowledged or witnessed in the manner required by paragraph (a) of this section, and shall take effect as of the date of such execution.”

General Obligations Law 5-1514(9)(b) requires a statutory gifts rider to a statutory short form power of attorney to “[b]e signed and dated by a principal with capacity, with the signature of the principal duly acknowledged in the manner prescribed for the acknowledgment of a conveyance of real property, and witnessed by two persons who are not named in the instrument as permissible recipients of gifts, in the manner described in subparagraph two of paragraph (a) of section 3-2.1 of the estates, powers and trusts law. The person who takes the acknowledgment, under this paragraph, may also serve as one of the witnesses.”

Public Health Law 2981(2)(a) states “[a] competent adult may appoint a health care agent by a health care proxy, signed and dated by the adult in the presence of two adult witnesses who shall also sign the proxy. Another person may sign and date the health care proxy for the adult if the adult is unable to do so, at the adult’s direction and in the adult’s presence, and in the presence of two adult witnesses who shall sign the proxy. The witnesses shall state that the principal appeared to execute the proxy willingly and free from duress. The person appointed as agent shall not act as witness to execution of the health care proxy.”

Public Health Law 4201 provides that a person designated in a written instrument executed pursuant to the provisions of this section has the prior right to control the disposition of the remains of a decedent over any other individual.  The written instrument must be in proper form as exemplified in Pub Health § 4201(3) and must be signed and dated by the decedent and the agent and properly witnessed.

Article 9 of the Real Property Law is titled “Recording Instruments Affecting Real Property” and encompasses §§ 290-336.

*  *  *

Indeed, without the issuance of the Executive Order, many individuals were unable to obtain access to the assistance they so required to duly execute their estate planning documents.  Health care facilities and hospitals are generally closed to the public, non-essential attorneys are required to work remotely from home, and to request witnesses to physically participate in a document execution ceremony is imprudent, if not impossible.  The Executive Order permits a person to duly execute their estate planning documents in the virtual presence of the supervising attorney (if any) and the requisite witnesses, while they all remain in the safety of their respective residences (or health care facility or hospital).  The Executive Order not only averts the risk of an individual exposing himself or herself to the virus, it provides the ability to those most impacted by the virus to have their estate planning documents duly executed.

The Executive Order is in effect for thirty days until May 7, 2020.

The Executive Order can be found at: https://www.governor.ny.gov/news/no-20214-continuing-temporary-suspension-and-modification-laws-relating-disaster-emergency

[1]  The Executive Order addresses Article 9 of the Real Property Law.