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Warren's Heaton on Surrogate's Court Practice
Copyright 2017, Matthew Bender & Company, Inc., a member of the LexisNexis Group.
5-67 Warren's Heaton on Surrogate's Court Practice 67.syn
Care and Disposal of Personal Property
Linda B. Hirschon, Greenberg Traurig, New York;Andrew L. Martin, Esq. Chief Court Attorney--Referee, Surrogate's Court, Nassau County;Eugene E. Peckham, Surrogate, Broome County;C. Raymond Radigan, Chairman, EPTL-SCPA Legislative Advisory Committee;Joshua S. Rubenstein;Peter N. Wells, former Surrogate, Onondaga County;* Chapter 67 was revised by Hon. C. Raymond Radigan, Chairman, EPTL-SCPA Legislative Advisory Committee; Ruskin Moscou Faltischek, P.C., Uniondale, NY, and Andrew L. Martin, Esq., Chief Court Attorney-Referee, Surrogate's Court, Nassau County
Other than property set aside for the family exemption, which does not become part of the decedent's estate, all personal property is chargeable with payment of debts unless specifically disposed. The executor takes unqualified title of all personalty not specifically bequeathed, and holds it as a trustee for the benefit of: (1) the creditors of the estate and (2) the beneficiaries of the estate. The fiduciary has a qualified title to specifically bequeathed property, which may only be applied in the discharge of debts after first exhausting all other property. The chapter covers procedures for inventory and appraisal, procedures for handling cash and other liquid assets, as well as the fiduciary duty to arrange proper storage and maintain insurance, and the fiduciary duty to earn interest on funds during administration. A decedent's leasehold interest becomes personal property of his estate, absent a specific bequest. The estate is liable for the rent and other obligations until the lease terminates or the lessor releases the estate. Cooperative apartment shares of stock and a lease assigned to those shares are considered personal property of the estate; however, the chapter also discusses contrary cases in which the decedent died before cooperative shares were issued.
A fiduciary's powers and duties as to stocks and bonds are governed by the Fiduciary's Powers Act and Prudent Investor Act sections of the EPTL. Under the EPTL, unless otherwise provided by will, a fiduciary may sell decedent's property at a public or private sale on terms most advantageous to those interested; further, creditors and legatees can't reach a good faith purchaser. The executor ordinarily has the duty to sell the assets for payment of debts or distribution, and the EPTL prescribes the order of sale for payment of administration expenses, reasonable funeral expenses, debts, and taxes. While the EPTL no longer distinguishes between real and personal property, in practice personal property is usually sold first. Testamentary provisions may indicate an order of preference as well. Beneficiaries have the right to object, seek an accounting, and seek to enjoin a sale, and fiduciaries cannot engage in self dealing. Fiduciaries generally should not purchase estate property unless authorized by the will or trust instrument, although they may petition the court. Fiduciaries should also avoid sale of property on credit.
Finally, the chapter discusses how to petition the court for advice and direction regarding the sale of estate property, and includes forms for this purpose. The chapter notes, however, that courts are reluctant to grant advice and direction if advice would merely substitute business judgment. Results have varied where executors have sought advice about pledging securities, refinancing mortgages, and resolving conflicts between co-fiduciaries.
Warren's Heaton on Surrogate's Court Practice (Matthew Bender) provides comprehensive coverage and analysis of New York Probate and Estates practice issues. Accepted by the courts as the leading authority on practice in Surrogate's Court, topics include jurisdiction, intestacy, probate, appointment of representatives and guardians, estate administration, fiduciary duties, accounting, commissions and fees, litigation, Federal and New York estate tax, and construction of wills and trusts. The treatise covers case law affecting substance and procedure; analysis of SCPA, EPTL, and related statutes; procedural guidance; and over 1,000 forms including official New York Surrogate's Court Forms and current Federal and New York estate tax forms with explanations. The treatise also covers Reformation and Trust-splitting issues, Supplemental Needs Trusts, Uniform Transfers to Minors, and Revocable Living Trusts.
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RELATED CHAPTERS: (View)
For a complete discussion of jurisdiction and procedural matters, see Chapter 2, Jurisdiction; Powers of the Surrogate. For discussion of securities, see Chapter 62, Collecting Assets of the Estate. For discussion of the family exemption, see Chapter 63. For further discussion distinguishing real property, see Chapter 68, Disposition and Management of Real Property of Estate. For an in-depth discussion of the Prudent Investor Act, and a fiduciary's duties as to investment of estate assets, see Chapter 70, Fiduciary Investment Power. See also Chapters 150-175 for discussion of property for tax purposes.
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