End of Blockbuster Year in Trusts and Estates Law

, New York Law Journal

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Ilene Sherwyn Cooper
Ilene Sherwyn Cooper

The year 2013 was an important one for trusts and estates, with legislative proposals moving forward, and significant judicial opinions affecting the practice being issued. As the year came to a close, and the new year began, practitioners continued to benefit from instructive decisions from the Surrogate's Court bench. Consider the following.

Fiduciary Ordered Removed

In a bitterly contested estate pending before the Surrogate's Court, Richmond County, the decedent's granddaughter petitioned to have her father removed as trustee of the trust created for her benefit, on the grounds of maladministration and self-dealing. The principal asset of the trust was a parcel of realty consisting of four rental units that the fiduciary managed.

At a hearing of the matter, the respondent/trustee admitted that he commingled trust funds with his own personal accounts, stating that he was unaware that he was forbidden to do so. The respondent further admitted that although he was a plumber by trade, he performed various home improvements, unrelated to plumbing, on the real property belonging to the trust, for which he was compensated less than the going rate. He claimed that he performed this work in an effort to save the trust money. Additionally, when questioned about the kinds of services he rendered, as well as the financial transactions of the trust that took place during his stewardship, the respondent conceded that he failed to maintain any such records, albeit he did have some receipts for materials purchased by him for the upkeep of the premises.

The court opined that it was the respondent's responsibility to protect the corpus of the trust for the benefit of his daughter, and to provide her with a substantiated explanation of the numerous questionable transactions he had engaged as trustee. Based on the foregoing testimony, and the many other admissions of wrongdoing made by the respondent on the record, the court concluded that he had failed to fulfill his role as fiduciary, by commingling trust funds with his own, failing to keep accurate records, and self-dealing.

Accordingly, the respondent was removed as trustee, and ordered to account.

In re DeSantis, NYLJ, Nov. 26, 2013, at p. 25 (Sur. Ct. Richmond County)

Late Filing of Objections

In In re Pisacano, the Surrogate's Court, Nassau County, authorized the decedent's son to file objections to the probate of the decedent's will despite petitioner's claims that they were untimely.

The record revealed that in response to the submission of a decree by the petitioner, the decedent's son filed objections to probate alleging, in support thereof, that the decree was premature. The petitioner requested that the objections be rejected and the decree signed.

It appeared that following the completion of Surrogate's Court Procedure Act (SCPA) 1404 examinations, and following a discussion with counsel for the petitioner, counsel for the decedent's son "understood" that the deadline for the filing of objections would be 10 days from the receipt of the transcripts. This understanding was never reduced to writing or a stipulation between counsel. Moreover, counsel for the petitioner maintained that neither he nor his associate "recalled" there being any such understanding or discussion with his adversary. At the time the objections were submitted for filing by the decedent's son, the transcripts of the SCPA 1404 examinations had not yet been received.

The court noted that SCPA 1410 requires that objections be filed 10 days after completion of examinations under SCPA 1404 unless there is a stipulation otherwise between the parties, or the court fixes a different date. Nevertheless, it observed that pursuant to CPLR 3012(d) the court was given the discretion to relieve a party from a default in pleading or appearance upon a showing of a reasonable excuse. Moreover, the court noted that pursuant to the provisions of CPLR 2004 it had the discretion to "extend the time fixed by any statute, rule or order for doing any act, upon such terms as may be just and upon good cause shown."

Accordingly, based upon the foregoing, and recognizing that the surrogate's overriding concern is that only valid wills be admitted to probate, the court, in the exercise of discretion, authorized the late filing of the objections.

In re Pisacano, NYLJ, Dec. 13, 2013, at p. 47 (Sur. Ct. Nassau County)

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