My colleagues have written on the enforceability of in terrorem clauses, and the courts continue to confront challenges in reconciling the testator’s intent to impose an in terrorem condition with the rights of beneficiaries to challenge the conduct of their fiduciary. The New York County Surrogate’s Court’s recent decision in Matter of Merenstein provides further
In Matter of Sinzheimer, the New York County Surrogate’s Court held that a corporate co-trustee that had been “removed” pursuant to the terms of the trust agreement was not required to deliver the trust’s assets to the sole individual trustee where the individual defied the instruction in the trust instrument to appoint a successor corporate co-trustee. The perceived objectivity on the part of the removed corporate trustee figured prominently in the Court’s decision sustaining its decision to withhold delivery of trust assets to the individual trustee until a new corporate trustee had been appointed. Brian Corrigan discusses the decision in our latest post.
Continue Reading Removed Corporate Trustee’s Refusal to Turn Over Trust Assets to Individual Trustee Was Prudent and Appropriate
Although one of the many duties of an executor is to marshal and appraise estate assets, and, depending on the terms of the governing instrument, liquidate them for purposes of distribution, the fulfillment of these duties may, at times, result in fiduciary liability. That was the case Matter of Billmyer, a recent decision emanating from the Second Department. Ilene Cooper discusses the decision in our latest entry.
Continue Reading Fiduciary Imprudence: When the Sale of an Asset Results in a Surcharge
A nominated executor is obliged to secure estate assets even before the issuance of letters testamentary. But what if the nominated executor expends personal funds to preserve assets that she erroneously believed to belong to the estate? Is she entitled to reimbursement? The Oneida County Surrogate’s Court recently addressed this situation in Matter of Timpano. Brian Corrigan discusses the case in our latest entry.
Continue Reading Executor’s Duties Before Receiving Letters
In Matter of Rivas, Surrogate Calvaruso of Monroe County addressed multiple legal issues pertinent to trustees, including but not limited to exoneration clauses, the Prudent Investor Act, delegation of investment responsibilities, and a fiduciary’s duty of loyalty. Frank Santoro discusses the case in our most recent entry.
Continue Reading Construction, Exoneration, Delegation, and Fiduciary Duty
This week’s entry discusses a recent decision rejecting an executor’s attempt to “sell” the decedent’s house to herself for the price of $10.
Continue Reading Court Rejects Executor’s Attempt to Sell House To Herself For $10
Questions often arise regarding a nominated executor’s authority to commence an action on behalf of the estate prior to the issuance of letters testamentary. These must be answered on a case-by-case basis.
In general, the authority of an executor “is derived from the will, not from the letters issued by the Surrogate” (see Matter of Yarm, 119 AD2d 754 [2d Dept 1986]). Thus, the executor’s duty to preserve estate assets arises immediately upon the testator’s death.
Pursuant to EPTL §11-1.3, a named executor of a will that has not yet been admitted to probate “has no power to dispose of any part of the estate of the testator before letters testamentary or preliminary letters testamentary are granted, . . . nor to interfere with such estate in any manner other than to take such action as is necessary to preserve it” (emphasis added). It is the language of this statute, and the similar words of its predecessor, Surrogate’s Court Act §223, that the courts have used as a guide in determining the circumstances under which named executors without letters may commence actions on behalf of the estate for which they are nominated to serve. Because the statute provides that a named executor may take actions that are necessary to “preserve” an estate, courts’ interpretations of the statute have established a fine line between those actions that are commenced for purposes of preservation, and those that constitute “active management” of estate affairs.