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.

With the spread of COVID-19 in this State, New York’s government has taken unprecedented steps to address many issues that the COVID-19 pandemic has raised. One of those unprecedented steps is the recent issuance of an Executive Order that temporarily authorizes the remote notarization of documents in New York until April 18, 2020.

As effective March 3, 2020, Executive Law § 29-a provides that, subject to the federal constitution, the state constitution, and applicable federal statutes and regulations, the Governor of this State may issue an Executive Order temporarily suspending any New York statute, among other things, “during a state disaster emergency, if compliance with [the subject statute] would prevent, hinder, or delay action necessary to cope with the disaster” (see Executive Law § 29-a[1]). Executive Law § 29-a authorizes the Governor to issue, by Executive Order, “any directive during a state disaster emergency”, such as an epidemic and a disease outbreak (see id.). The powers vested in the Governor, pursuant to Executive Law § 29-a, during a state disaster emergency are quite broad.

On March 19, 2020, Governor Cuomo issued Executive Order No. 202.7, which temporarily authorizes the remote notarization of documents in New York until April 18, 2020 (see N.Y. Governor’s Executive Order No. 202.7 [Mar. 20, 2020]). Executive Order No. 202.7 provides that “[a]ny notarial act that is required under New York State law is authorized to be performed” by “audio-video technology”, provided that certain conditions are met (see id.). The conditions that must be met are as follows:

  • “The person seeking the Notary’s services, if not personally known to the Notary, must present valid photo ID to the Notary 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 Notary (e.g. no pre-recorded videos of the person signing)”;
  • “The person must affirmatively represent that he or she is physically situated in the State of New York”:
  • “The person must transmit by fax or electronic means a legible copy of the signed document directly to the Notary on the same date it was signed”;
  • “The Notary may notarize the transmitted copy of the document and transmit the same back to the person”; and
  • “The Notary may repeat the notarization of the original signed document as of the date of execution provided the Notary receives such original signed document together with the electronically notarized copy within thirty days after the date of execution” (see id.).

As it relates to notarial acts, the practical effect of Executive Order 202.7 appears to be that, subject to the aforementioned conditions and until April 18, 2020, a person located in New York State can now have a notary public notarize his or her signature without having to physically appear before the notary public. A person need not risk exposing himself or herself to COVID-19 by going into a public place – whether it be an attorney’s office, a bank, or a post office – to have his or her signature notarized on a document that requires a notarial act in order to be valid. Likewise, during these unusual times in which nursing homes are largely closed to visitors, a notary public need not visit a nursing home resident in order to notarize the resident’s signature. In the context of the public health crisis in which we presently find ourselves, the possibility for the remote notarization of documents appears to be an appropriate response.

While Governor Cuomo’s authorization for the remote notarization of documents expires on April 18, 2020, it remains to be seen whether the “cat will be out of the bag” when the COVID-19 pandemic subsides. Indeed, it will be interesting to see whether New York’s Legislature follows the lead of several other states by enacting legislation that permanently authorizes the remote notarization of documents.

To Our Readers –

Although this is not an Estate Litigation topic, we thought you might be interested in this very timely article because of its impact on estate planning. Special thanks to our Estate Planning Group for preparing this content.

Be safe.

 

Wealth Transfer Opportunities with Devalued Assets

The COVID-19 pandemic continues to have far-reaching effects which are expected to be felt for months to come, if not longer.  The economy has been hit hard and the stock market has seen a dramatic reduction in value.  Trying to time the market is like trying to catch a falling knife and no one can be sure as to the duration and extent of losses.  Even though gifting may be the last thing on your mind, the current climate presents a unique opportunity for estate planning.

For 2020, a married couple can protect $23.16 million ($11.58 million per individual) in taxable assets from the federal gift and estate tax.  With proper planning, the same amount can often be protected from taxation in the estates of their children as well.  Additionally, the annual gift tax exclusion amount is currently set at $15,000 ($30,000 per couple).

The following are a few techniques to consider: (i) outright gifts, (ii) gifts to dynasty trusts, (iii) gifts to Grantor Retained Annuity Trusts (“GRATs”), (iv) sales to Intentionally Defective Grantor Trusts (“IDGTs”), (v) substitution of trust assets in IDGTs, and (vi) loans to family members.  Each technique is addressed below.

Outright Gifts

Outright gifts are useful.  They are simple and can be completed quickly.  Note, however, such gifts are included in the recipient’s estate for estate tax purposes and do not provide any spousal or creditor protection.

Gifts to Dynasty Trusts

Gifts to dynasty trusts, if structured correctly, have the added effect of removing the gifted property from the beneficiary’s estate.  If proper exemption is allocated to the gift, the future appreciation on the gifted property will not be subject to estate tax on the beneficiary’s death.  Furthermore, the gift will be protected from spouses and creditors.

Example: Jane transfers stock valued at $5 million (assume the stock was valued at $8 million before the crisis) to a trust for the benefit of her son, Bob, and she uses $5 million of her lifetime gift tax exemption.  Five years later, the stock has increased in value to $8 million.  Jane essentially removed $8 million from her estate and only used $5 million of her lifetime exemption.  The trust property (including future appreciation) will be available for Bob’s benefit but will not subject to estate tax on his death and will not be reachable by his creditors or his spouse.

Gifts to GRATs

A GRAT is a trust to which you transfer property and retain the right to receive annual payments for a set period of time.  If the GRAT is “zeroed out,” the remaining property left in the trust at the end of the term will pass to the beneficiaries without using any of your gift tax exemption.  GRATs are perfect when interest rates are low because any appreciation will pass to the beneficiaries tax free.  Starting on April 1, 2020, the interest rate is only 1.2%, which presents a rare opportunity to make transfers while still potentially removing substantial asset appreciation from your estate.

Example: Fred funds a GRAT with $10 million worth of stock and retains the right to receive an annuity payment of approximately $1.318 million annually for 8 years.  Assuming Fred survives for 8 years and the trust principal grows 5% annually, approximately $2.185 million will pass to the trust beneficiaries and Fred will not have used any gift tax exemption.

Sale to an IDGT

With a sale to an IDGT, an asset is sold to a trust in return for a promissory note (after the trust is funded with seed money).  Appreciation on the trust assets in excess of the sale price will pass to the beneficiaries of the trust estate tax free.  As discussed above, effectuating this type of transfer while interest rates are low enables you to pass more assets to your family, as the trust will have to pay less interest on the note.

IDGTs: Substituting of Assets

Oftentimes, the terms of an IDGT provide you with the power to substitute the IDGT’s assets for assets of equivalent value.  Exercising this power can be beneficial if a trust asset is expected to substantially decrease in value.  In that event, you can swap the asset with decreasing value for cash or another asset with increasing value.  As a result, your estate is ultimately reduced (with less property subject to estate tax) and any appreciation on the asset transferred to the IDGT will be removed from your estate for estate tax purposes.

Example: Sally owns real property currently valued at $10 million and expects the property value to increase.  An IDGT created by Sally owns stock also valued at $10 million, but the stock is expected to substantially decline in value.  Sally substitutes her real property for the IDGT’s stock, and dies ten years later when the stock is worth $2 million and the real property is worth $15 million.  Sally’s estate now includes property valued at $2 million while the IDGT, which is not subject to estate tax when Sally dies, has an asset with a value of $15 million.

Note that you should consider the tax basis in the property being substituted, as there could be potential gain or loss when the property is later sold.

In addition to the substitution example discussed above, consider the following scenario: if an IDGT over which you hold a power of substitution owns an asset with a low tax basis, substitute that low basis asset for a high basis asset that you own individually.  Upon your death, your heirs will receive a “step up” in basis in that low basis asset, which will reduce potential capital gain if the asset is later sold.

Transfers to a GRAT, sales to an IDGT, and substitution of IDGT assets remain powerful estate planning techniques, especially where clients no longer have substantial remaining gift tax exemptions to utilize.

Loans to Family Members

Consider making loans to family members or refinancing existing loans to take advantage of the extremely low interest rates (in April, the short term rate will drop to 0.91% and the midterm rate will drop to 0.99%).

As a reminder, on January 1, 2026, the federal estate, gift, and GST tax exemptions are set to revert back to their pre-2018 levels (approximately $5.49 million per individual), as indexed for inflation.  In fact, there is a real possibility that the exemptions will be reduced before 2026 depending on the outcome of the upcoming election.  At this time, we need to assume that the increased exemptions will go back to their previous levels, which means that there is a limited window to take advantage of the increased exemptions.

During this crisis, our main concern is that you and your loved ones remain safe and healthy.  Please feel free to contact us if you would like to discuss any of the above-mentioned techniques with an attorney.  Of course, we remain available to assist you with any other estate planning needs or inquiries, as it may be a prudent time to revisit your current estate plan and make sure that it works for you given the current climate.

Like other government institutions, New York State Surrogate’s Courts are figuring out how to function during the coronavirus pandemic. The first notice came on Friday, March 13, 2020.   Lawrence K. Marks, the Chief Administrative Judge of the State of New York’s Unified Court system released a memorandum addressing the pandemic and outlining the procedures that were being put in place to reduce courthouse traffic. The March 13 memorandum was silent as to the Surrogate’s Courts. Just two days later an updated protocol memorandum was released announcing that effective as of 5:00 p.m. on Monday, March 16, the Courts would be “postponing all non-essential functions of the courts until further notice.”   As the effects of the pandemic continue to materialize, court closures have become more extensive.   Below is some useful information pertaining to the Surrogate’s Courts across the State.

Announcement pertaining to NYC Surrogate’s Courts

In light of recent developments in the coronavirus public health emergency in New York State, ESSENTIAL APPLICATIONS ONLY will be considered by the Court. Please call the phone number or e-mail below before coming to Court:

Bronx County – 718-618-1894; emadera@nycourts.gov
Kings County – 347-404-9720; daquinn@nycourts.gov
New York County – 917-509-7218; dsanabri@nycourts.gov
Queens County – 718-298-0777; jlbecker@nycourts.gov
Richmond County – 718-675-8504; rcerrach@nycourts.gov

New York County Surrogate’s Court –http://ww2.nycourts.gov/courts/1jd/surrogates/index.shtml

IMPORTANT NOTICE

As part of the measures adopted by the NYS Unified Court System to combat the spread of COVID-19, the following actions are being implemented by the New York County Surrogate’s Court:

  • All matters scheduled to be heard at calendars from March 17, 2020 through April 10, 2020 are being adjourned administratively. Parties must not appear in court. Notices of future dates for court appearances will be sent by regular mail.

 

  • No trials or hearings will commence until further notice. This includes 17-A Guardianships and finalizations of adoptions. Trials or hearings that have been adjourned to a date in March or April will be adjourned again.

 

  • Until further notice, all papers must be filed by regular mail. If papers are brought to the courthouse in person, they are to be left in a box outside room 303. Court staff will contact petitioners or their counsel with directions once papers are reviewed.

 

  • Only essential personnel will be at work at the courthouse and delays should be expected in the review, processing and scheduling of matters.

 

  • Effective immediately, the court will no longer issue citations returnable before the court in March, April or May, 2020.

 

  • Parties with urgent matters may contact the Chief Clerk’s Office at (917) 509-7218. Meetings and conferences in urgent matters may be arranged and will take place by conference call or via Skype with the proper court personnel.

 

  • The terms of this notice are subject to modification as the need arises

The Queens County Surrogate’s Court issued a March 16, 2020 memorandum in furtherance of the Chief Administrative Judge’s highlighting specific procedures being taken by the Court. A copy of the memorandum can be found by clicking on the following link on the Court’s website –  COVID-19 New Procedure – March 16, 2020

The Bronx County Surrogate’s Court issued a notice laying out the actions being implemented by the Court to combat the spread of the coronavirus. A copy of the notice can be found by clicking on the following link on the Court’s website – Covid-19 Information, March 17

Nassau County issued an emergency notice postponing all non-essential functions until further notice. A copy of the emergency notice can be found on the Court’s website – http://ww2.nycourts.gov/doc/29321

Although the Nassau County courts previously planned to use the District Court building for filings during the period in which the courts are closed for non-essential functions, the Nassau County courts will be using the County Court building in Mineola (instead of the District Court building). For the Nassau County Surrogate’s Court, there will be one employee who is on premises and will sit at the Surrogate’s Court’s cashier’s window. New filings will not be accepted, except for true emergency applications (i.e., the alleged need for a temporary restraining order when a fiduciary has allegedly acted badly). The courts are attempting to limit traffic to a bare minimum in compliance with the government’s request.

C. Randall Hinrichs, the District Administrative Judge of Suffolk County issued Amended Order No. 22-20 on March 17, 2020. Pursuant to the order, all non-essential matter are administratively adjourned until a date on or after April 30, 2020. A copy of the Order can be found on the Court’s website by clicking on the following link – Administrative Orders, Operational Changes due to Coronavirus Crisis.

Please note that the Chief Judge’s memorandum states that in addressing essential applications, judges will exercise judicial discretion in a manner designed to minimize court appearance and traffic in the courts. The latest news related to the New York State Court System can be found by clicking on the following link – http://www.nycourts.gov/index.shtml

ADDENDUM

On 3/22/20 the Chief Administrative Judge of the Courts, issued an updated directive addressing the New York Court’s ever evolving response to the COVID-19 outbreak.  Per the directive, only “essential matters”, which are more fully described on Exhibit “A” of the Administrative Order may be accepted for filing by the courts.  As previously noted, in addressing these essential applications, judges will exercise judicial discretion in a manner designed to minimize court appearances and traffic in the courts.   The list of essential proceedings is subject to ongoing review and amendment as necessary. 

Section E of the list of essential proceedings includes “any other matter that the court deems essential. Consistent with the goal of the administrative order to limit new filings, this catch-all provision is designed to address the very rare cases where individual facts necessitate an immediate hearing notwithstanding current public health concerns; it will be interpreted restrictively. Persons who believe that a specific pending or new matter should be included in this highly restrictive group should apply to the court for this designation by emergency application, including a detailed explanation of the applicant’s rationale” (www.ny courts.gov/limited-filings.shtml).  Given the ongoing public health concerns, people should use the utmost discretion prior to bringing an emergency application.

 For further guidance on these issues please review the Chief Administrative Judge’s directive, AO/78/20, at www.nycourts.gov/whatsnew/pdf/AO-78-2020.pdf, along with the interpretive guidance at www.nycourts.gov/limited-filings.shtml. 

Since the last post to this blog on the evolving issue of access to a decedent’s digital assets (Death and Digital Content: Protecting Digital Assets After the Death of a User, March 29, 2019), New York Courts have issued a series of decisions that generally followed the leads of the Serrano and White decisions (as discussed in An Update on a Fiduciary’s Access to the Digital Records of a Decedent, December 19, 2017). This post provides (1) a summary of the legislative intent behind Article 13-A of the EPTL (“Administration of Digital Assets”), (2) a survey of the recent published decisions, (3) tips on applying for disclosure of a decedent’s digital assets, and (4) a discussion of the definition of “electronic communication.”

Legislative Intent

Article 13-A of the EPTL became effective on September 29, 2016. This law serves two primary purposes: (1) to enable a fiduciary to access and administer a decedent’s digital assets while respecting the decedent’s privacy;[1] and (2) to “restore control of the disposition of digital assets back to the individual and [remove] such power from the service provider.”[2] In short, the law is not intended to let a fiduciary simply “step into the shoes” of a deceased user and manage the decedent’s digital assets in the same way as tangibles (e.g., photos, letters). The law requires affirmative direction by an account holder to authorize access to digital assets in the event of death or incapacity.[3] Without express authorization by the user, disclosure is allowed if directed by a court. In the recent cases where a deceased user provided no express authorization for disclosure, to protect a decedent’s privacy by limiting access to non-content information of digital assets has been the established theme.

Recent Published Decisions

In Matter of Coleman (63 Misc 3d 609 [Sur Ct, Westchester County 2019]), the parents of a decedent who died unexpectedly in his sleep at the age of 24 petitioned for a court order directing Apple to disclose data stored in decedent’s iCloud account for the purposes of marshaling decedent’s digital assets, identifying decedent’s medical issues, and determining whether any legal action should be commenced. Apple was cited but defaulted. Finding that the petitioners had not “amply demonstrated” the need to access the content of decedent’s digital assets for estate administration, Surrogate Sall allowed disclosure of non-content digital assets in favor of protecting decedent’s interest in not consenting to disclosure of the content, without prejudice to a new application establishing that disclosure of content information would be necessary.

Similarly, in Matter of Murray (NYLJ, Oct. 21, 2019, at 30 [Sur Ct, Suffolk County]), Surrogate Whelan denied the application for access to content information of electronic communications stored in decedent’s iPhone and associated with decedent’s Apple ID. Petitioner alleged that the information contained in the data was reasonably necessary for the administration of the estate and would particularly “assist in determining the source of drugs obtained by [decedent].” Apple agreed to “transfer ownership of the Apple ID to petitioner” only if a court order specifies, among others, that petitioner is “the ‘agent’ of the decedent and her authorization constitutes ‘lawful consent.’” The Court acknowledged the “delicate balance between a decedent’s right to privacy and a fiduciary’s duty to marshal estate assets,” as emphasized by former Surrogate Cyzgier in Matter of White (NYLJ, Oct, 3, 2017, at 25, col 1 [Sur Ct, Suffolk County]). Finding a lack of proof to substantiate the nexus between the content information sought and administration of the estate, the Court only allowed disclosure of a catalogue of electronic communication (i.e., non-content information).

Most recently, Surrogate Sall has denied an Administrator’s SCPA 2103 petition for access to content information of a decedent’s Google e-mail and directed disclosure of a catalogue only (Matter of Paragon, NYLJ, Dec. 20, 2019, at 21, col 2 [Sur Ct, Westchester County]). Disclosure of e-mail content was sought to ascertain decedent’s intent regarding disposition of certain real property. Even if disclosure of contents of e-mails could be reasonably necessary to estate administration, the Court found that granting unfettered access to decedent’s e-mail (which was also used for decedent’s law practice) “would more likely than not” allow access to communication protected by attorney-client privilege.

Tips on Applying for a Court Order Authorizing Access

The published decisions indicate that courts tend to be sympathetic to a fiduciary seeking access to a decedent’s digital assets, which is often precipitated by an unexpected, tragic loss. Nevertheless, because custodians usually require a court order absent an express authorization by a decedent, New York courts are restrained to allow access only to: (1) non-content information of electronic communications in the form of a catalogue, and (2) digital assets that are not electronic communications, e.g., photos stored in iCloud (Matter of Swezey, NYLJ, Jan. 17, 2019, at 23, col 3 [Sur Ct, NY County]), and information contained in Google Calendar and Contacts (Matter of Serrano, 56 Misc 3d 497 [Sur Ct, NY County 2017]).

The decisions indicate two typical routes to apply for disclosure of digital assets: (1) a small estate proceeding (SCPA Article 13), or (2) an SCPA 2103 proceeding. In a small estate proceeding, the court usually issues a certificate under SCPA 1304(5) directing a non-party custodian to disclose certain digital assets, whereas in a discovery proceeding, process is issued to the custodian. Although it might seem innocuous to dispense with process on custodians who tend to default even when they are served with process, a procedural conundrum might emerge in a small estate proceeding when a non-party custodian later appears to oppose the order.

In applying for a court order directing disclosure of a decedent’s digital assets, a fiduciary must provide sufficient information to assist the court (Matter of Bass, NYLJ, Jun. 25, 2019, at 22, col 4 [Sur Ct, NY County 2019] [dismissing the application without prejudice after petitioner failed to provide the required information]). “Sufficient information” includes the following:

  1. Specific information needed and where it is stored;
  2. The reason why the information sought is reasonably necessary for the administration of decedent’s estate (i.e., the nexus);
  3. Basis for petitioner’s knowledge of the accounts associated with the decedent;
  4. Custodian’s specific requirement for disclosure, e.g., proposed court order; and
  5. Information regarding whether the decedent provided any direction for disclosure or otherwise consented to such, and whether the decedent prohibited disclosure.  (see Matter of Gager, NYLJ, Jun. 28, 2019, at 27, col 1 [Sur Ct, NY County 2019]):

In light of the popularity of digitalized assets and paperless records, the need for a fiduciary’s access to a decedent’s digital assets will only increase. To facilitate a fiduciary’s access, the law should burden neither the custodians nor the courts. Before a standard procedure can be implemented to address the particular needs for ordered disclosure, courts will entertain applications for access on a case-by-case basis. An application that provides the above information tailored to the specific needs will hopefully streamline the process.

Stones Left Unturned—What is “Electronic Communication”?

The stricter requirement for disclosure of content information of electronic communications under Article 13-A of the EPTL can be ascribed to its roots in the federal law. The definition of “electronic communication” derives from the Wiretap Act (18 USC §§ 2510-22) as Title I of the Electronic Communications Privacy Act of 1986 (“ECPA”). Recognizing that “law must advance with the technology to ensure the continued vitality of the fourth amendment” 33 years ago (S Rep 99-541, 99th Congr, 2nd Sess, reprinted in 1986 US Code Cong & Admin News at 3559), Congress enacted the ECPA to amend the federal wiretap law of 1968 by extending to “electronic communications” the privacy protection against unauthorized interception (id. at 3555).

The Stored Communications Act (“SCA”), which is Title II of the ECPA, sets forth internet users’ statutory privacy rights against government surveillance by limiting the government’s ability to compel service providers to disclose users’ information and by restricting service providers from voluntarily disclosing such information to the government (18 USC §§ 2701-12). Specifically, it prohibits custodians from disclosing (1) contents of a communication in their electronic storage to anyone, and (2) non-content information to any governmental entities (18 USC § 2702 [a]). Voluntary disclosure of content information is permissible “with the lawful consent of the originator or an address or intended recipient of such communication” (18 USC § 2702 [a][3]). In the context of disclosing a decedent’s digital assets to a fiduciary, the custodians are concerned about violating the federal law. Rather than acknowledging a fiduciary’s consent as “lawful consent” under the federal statute (id.; see Ajemian v Yahoo!, Inc., 478 Mass. 169 [2017] [finding that fiduciary could “lawfully consent” for disclosure of contents of decedent’s email]), the RUFADAA and New York law require proof of a decedent’s consent or a court order for disclosing content information of electronic communications

Absent congressional intent to preempt probate law in the ECPA (see Ajemian v Yahoo!, Inc., 478 Mass. at 178), the definition of “electronic communication” as adopted from the Wiretap Act could interfere with a fiduciary’s estate administration under Article 13-A of the EPTL. For example, when a decedent shared Google calendar entries or photos stored in iCloud with another individual, was there transfer of information that should prohibit disclosure of such calendar entries and photos under the SCA? The interpretation of a fiduciary’s access to a decedent’s digital assets is truly a work in progress.

 

 

[1] NYSBA memorandum in support of the proposed legislation (the “NYSBA Memo”), page 1.

[2] New York State Assembly Memorandum in Support of Legislation A 9910A (the “Assembly Memo”).

[3] The NY law was modelled after the Uniform Law Commission’s Revised Uniform Fiduciary Access to Digital Assets Act (2015) (the “RUFADAA”) which was endorsed by major service providers like Facebook and Google. As of January 26, 2020, the RUFADAA has been adopted and enacted by 44 states and introduced in four other states and District of Columbia (Uniform Law Commission).

 

New York CPLR 3122(d) provides that the “reasonable production expenses” incurred by a non-party’s compliance with a subpoena shall be defrayed by the party issuing the subpoena. May a non-party’s counsel fees related to responding to a subpoena involving the production of electronically stored information be included as part of the “reasonable production expenses”?

This largely unsettled question was recently answered in the affirmative by Surrogate Peter J. Kelly in Matter of Khagan, 2019 NY Slip Op 29352 [Sur Ct. Queens Co. Sept. 18, 2019], who noted that “there is a dearth of Surrogate’s Court opinions on this issue”. Upon consideration of the limited relevant case law, the policy behind the statute, and the facts giving rise to the document discovery dispute, the Court awarded a non-party $40,000 in counsel fees and $5,571.28 for an e-discovery vendor’s services, pursuant to CPLR 3122(d). The Khagan decision presents an instructive analysis that may guide both attorneys issuing subpoenas duces tecum and those advising clients in receipt of such subpoenas.

Factual Background

Khagan involved a contested trustees’ accounting where the trust owned real property in Manhattan. The trustees retained the non-party as a consultant to assist in the development of that property. The property was never developed and the objections to the trustees’ accounting challenged payments from the trust to the non-party consultant.

In response to subpoenas served by the objectants, the non-party’s counsel inquired about payment of the reasonable costs of production and was informed that the objectants would share those costs equally. None of the communications between counsel about the subpoenas, over a period of months, concerned the non-party seeking counsel fees. There was some discussion between the attorneys about limiting the scope of the subpoenas, but no agreement was reached.

The non-party’s attorney advised the objectants’ counsel that approximately 20,000 electronically stored files had been collected which would need to be reviewed before production. Following the non-party’s attorneys’ review, 11,650 records were deemed responsive and not privileged and then shared with the trustees’ counsel for their own privilege review.

The responsive records were ultimately placed on a flash drive and the non-party’s attorneys conditioned delivery to the objectants on their payment of (i) e-discovery vendor invoices totaling $5,571.28 and (ii) the non-party’s legal fees of $92,076.04. The objectants refused and the non-party moved, pursuant to CPLR 3122(d), to compel the objectants to pay such expenses as “reasonable production expenses” incurred in responding to the objectants’ subpoenas.

NY CPLR 3122(d)

CPLR 3122(d) provides that “[t]he reasonable production expenses of a non-party witness shall be defrayed by the party seeking discovery.” The policy behind the rule is that a non-party should not be burdened with the costs of litigation to which that non-party is not related, especially when those costs may be significant. The statute does not define what constitutes “reasonable production expenses.”

The Non-Party’s E-Discovery Vendor Fees

In Khagan, Surrogate Kelly recognized that beyond the actual copying/reproduction, “there are labor related costs in the search, retrieval and production of the documents, and often the expense of an e-discovery professional. Logically these costs incurred by a non-party should unarguably be compensable as reasonable production expenses.”

In support of its motion, the non-party submitted invoices from an electronic discovery vendor for services in facilitating the collection, hosting and production of the records totaling $5,571.28. The Court ordered the objectants to pay this amount in full.

The Non-Party’s Legal Fees

In further support of its motion, the non-party submitted its attorneys’ time records totaling $92,076.04 for services related to the objectants’ subpoenas. The Court noted there is no specific reference to attorney’s fees at CPLR 3122 nor are there many decisions addressing whether attorney’s fees are included as “reasonable production expenses”.

While the Surrogate’s Court does not have rules governing e-discovery, the Surrogate found a review of such rules in the Commercial Parts of Nassau County and New York City instructive. The Court observed that the procedure followed here by the objectants and non-party “did not remotely comply with any of these guidelines, especially with respect to the discussion of costs.”

The Court held:

Upon the court’s reading of the statute, case law, commentaries and various court rules for the commercial parts, and considering the rational[e] underlying the rule, the court is of the opinion that legal fees incurred by a non-party conducting e-discovery in complying with a subpoena are potentially reimbursable in Surrogate’s Court proceedings [footnote omitted].

In reaching this decision, the Court considered the following factors:

 

  • The breadth of the subpoenas’ demands;

 

  • The lack of any showing by the objectants as to why the information sought from the non-party could not be gleaned from the trustees’ own records or how the trustees’ documents were inadequate;

 

  • The failure to reach an agreement on reducing the scope of the subpoenas;

 

  • The lack of prior notice given by the non-party that it would seek reimbursement for legal fees;

 

  • The non-party’s relationship with the trustees in the management of the trust; and

 

  • That expenses for the non-party’s counsel to draft objections to the subpoenas and confer with the trustees’ counsel should be excluded from what the objectants pay.

Thus, of the $92,076.04 sought by the non-party for counsel fees, as “reasonable production expenses” related to the subpoenas, the Surrogate awarded $40,000.

The Court cautioned that its decision should not be read as a license to a non-party to incur fees that it would not deem reasonable and necessary if the non-party were shouldering the burden. The Court added that, “in the absence of a prior agreement between the demanding party and the non-party, such fees are subject to the exercise of the court’s power to limit or deny them to prevent unreasonable expense or other prejudice to any person as the circumstances may present (see CPLR 3103[a]).”

Conclusion

Although the Uniform Rules for Surrogate’s Court do not contain provisions governing e-discovery, the rules of other Courts on this topic may prove instructive, as they were to the Surrogate in deciding Khagan.[1] An early good faith meet and confer between counsel concerning the scope and cost (including cost shifting) of such discovery may allow discovery to proceed more efficiently and potentially avoid a party from incurring significant, and unexpected, litigation costs.

 

[1] See, e.g., Commercial Division, Nassau County Guidelines for Discovery of Electronically Stored Information (“ESI”), http://www.nycourts.gov/courts/comdiv/nassau.shtml

 

 

“The attorney client privilege, the oldest among common-law evidentiary privileges, fosters the open dialogue between lawyer and client that is deemed essential to effective representation” (Spectrum Sys. Intern. Corp. v Chem. Bank, 78 NY2d 371, 377 [1991] [quotation marks and citations omitted]). While an otherwise privileged communication can lose the protections of the privilege by reason of waiver, either intentionally or inadvertently, two principles complicate application of the rules governing waiver in Surrogate’s Court proceedings. The first such principle is that the attorney client privilege belongs to the client and, generally speaking, only the client can waive the privilege (see generally Manufacturers and Traders Tr. Co. v Servotronics, Inc., 132 AD2d 392, 400 [4th Dept 1987] [“the attorney-client privilege belongs to the client and can be waived only by the client”]).  The second such principle is that, in New York State, the privilege survives the death of the client (see Matter of Riconda, 90 NY2d 733, 740 [1997]). While it is well established that the right to waive the privilege also survives the death of the client, case law is still developing concerning who can effectuate a post-death waiver and in what circumstances.

Recently, in Matter of Thomas, 2019 NY Slip Op 08293 (4th Dept Nov. 15, 2019), the Appellate Division, Fourth Department, addressed whether the executor of an estate is authorized to waive a decedent’s attorney client privilege, an issue of first impression in that Department. Agreeing with the Second and Third Departments, the Fourth Department answered the question in the affirmative. Perhaps more significantly, the Court held that the executor in that case could waive the privilege regardless of his self-interest in the testimony of the decedent’s former counsel, and over the petitioner’s objection that the executor’s success in the proceeding would result in the exclusion of an asset from the estate and, thus, would not benefit the estate.

Thomas involved a dispute among the decedent’s children (and the issue of a post-deceased child) over the ownership of a closely held company, New York State Fence Company (“NYSFC”), previously owned by the decedent. The respondent in the proceeding was one of the decedent’s sons, the executor of his estate. He did not identify any shares of NYSFC as assets of the decedent’s estate. The petitioners, other issue of the decedent, commenced a proceeding challenging numerous real estate transactions between the respondent and the decedent, as well as the respondent’s failure to identify any shares of NYSFC as being assets of the estate. They sought to impose a constructive trust claim, based on the fact that the respondent failed to produce any records reflecting the transfer of the stock from the decedent to himself, or any records reflecting respondent’s payments for the stock.

The Surrogate dismissed the constructive trust claim, and, in a prior decision, the Fourth Department reinstated it (see 124 AD3d 1235 [4th Dept 2015]). Then, in another decision, the Fourth Department held that the Surrogate erred in directing a verdict in favor of the respondent at the close of the petitioners’ proof (see 148 AD3d 1764 [4th Dept 2017]). This decision was grounded in the Court’s determination that the Surrogate erred in determining that the petitioners had the burden of proof to establish that the stock had not been transferred to the respondent. The Fourth Department held that where an asset is not included in the inventory of the estate based upon a fiduciary’s assertion that he is the owner of the asset, it is the fiduciary’s burden to show a legal and sufficient reason for withholding it.

Which brings us to the third appeal. Upon remittal, the Surrogate held a nonjury trial during which the respondent, in his capacity as executor, waived the decedent and his deceased wife’s attorney-client privilege, and their former counsel thereafter testified that she did not include a specific bequest with respect to NYSFC in the Decedent’s most recent will because he had already transferred those shares to the respondent. The Surrogate accordingly determined that the respondent satisfied his burden and specifically established that the shares of NYSFC were sold and transferred to him prior to the Decedent’s death.

The petitioners appealed, arguing, inter alia, that existing case law, from the Second and Third Departments, permit waiver of the attorney-client privilege by an executor only if the waiver benefits the estate. They asserted that excluding an asset from the estate would only benefit the respondent, not the estate or its beneficiaries.

In affirming the Surrogate’s determination, the Court relied heavily on the Second Department’s decision in Mayorga v Tate, 302 AD2d 11 (2d Dept 2002). In that case, a legal malpractice action brought against the decedent’s attorneys, the court held that the assignee of the executor of the decedent’s estate could waive the decedent’s attorney client privilege and compel production of the attorney’s file concerning the decedent. The court provided a detailed discussion concerning New York’s attorney-client privilege statute, CPLR § 4503, noting that it merely codifies the common law. Further, the court noted that while the statute expressly permits the “client” to waive the privilege, the common law “has always provided that an executor may, in the interest of the estate, waive the attorney-client privilege of the deceased client.” The court stated that “it makes no sense to prohibit an executor from waiving the attorney-client privilege of his or her decedent, where such prohibition operates to the detriment of the decedent’s estate, and to the benefit of an alleged tortfeasor against whom the estate possesses a cause of action[.]” It concluded that, “under the terms of CPLR 4503, just as under the common law, an executor may waive the attorney-client privilege of his or her decedent[.]”

The Fourth Department also noted that the Third Department reached the same determination in Matter of Johnson, 7 AD3d 959 (3d Dept 2004), lv denied 3 NY3d 606 (2004).

Rejecting the petitioners’ argument that Mayorga and Johnson only support an executor’s waiver of the attorney-client privilege if the waiver benefits the estate, the Fourth Department noted that, subsequent to Mayorga, the Second Department permitted a waiver in Matter of Bassin, 28 AD3d 549 (2d Dept 2006). In Bassin, a proceeding in which the decedent’s daughter sought to recover for the estate certain real property the decedent had deeded to her son, the court permitted a waiver to allow the decedent’s attorney to testify regarding the decedent’s intent in executing the deed in favor of her son.

Nevertheless, it is quite possible to reconcile the determinations in Thomas and Bassin – where an executor was permitted to waive privilege even though the result was a determination that the estate had no interest in a valuable asset – with a general rule that an executor may waive a decedent’s attorney-client privilege only “in the interest of the estate.” In the universe of trust and estate law, the primary focus of most proceedings is giving effect to a decedent’s intent. One could well argue, therefore, that ascertaining a decedent’s intentions with respect to the descent, distribution, and ownership of his or her assets after death is both “in the interest of the estate” and “benefits the estate.” This is true even where, as in Thomas, the estate is deprived of an asset as a result.