As a New York estate lawyer I am often surprised by how casual clients are while drafting their wills. Having drafted a great deal of wills for New Yorkers here in Forest Hills, this process never ceases to amaze me. There should be nothing casual in the appointment of your executor in your last will and testament and here’s why.
Your named executor in your will will be your nominated fiduciary in the event of your passing. Your fiduciary is required to perform several functions here in New York. Those function are as follows; Your executor is bound by his or her obligation to pay all of the debts and creditors of your estate; Your executor is bound to marshal any and all assets of your NY estate; Your executor is bound to disburse those moneys to their rightful owners, the beneficiaries of your NY estate; and most importantly as your fiduciary your executor is obligated not to steal the assets of your estate.
You would be surprised how often this last part trips up fiduciaries entrusted with estate assets. If you think I am kidding I am not. This is an issue in all estates, big and small.
What are the benefits of being executor?
A nominated executor’s first role is to deliver an undamaged original copy of the decedent’s will, with its staples in place, to a NY estate lawyer for probate. Once admitted to probate the fiduciary goes from being a nominated executor to an actual executor.
As an executor in NY you are entitled to keep a list of expenses you incur in the administration of your duties as fiduciary and are entitled to full reimbursement out of the estate. However, those expenses incurred have to be causally related to the administering of the estate and to the benefit of the estate. Simply stated, no all expense paid trips to Tahiti on the estate’s dime, provided there are no estate assets requiring marshalling in the Tahitian islands.
As executor of a NY estate, you are entitled to an executor’s commission as promulgated by the New York Estates, Powers & Trusts Law (EPTL) for fulfilling your duties diligently.
What are the negatives of being executor?
An executor may be held personally liable to the estate for any and all estate assets whose value diminished in their custody due to their negligence. Yes you read this correctly.
For example A passes away leaving her sister B executor of her estate in A’s last will and testament. B admits the will to probate with the help of a NY probate lawyer and is appointed fiduciary of A’s estate. A leaves behind a stock portfolio worth $2 million of moderate to high-risk equities. While B is sleeping the equities market has a correction and A’s portfolio is now worth $1 million. B may now be liable to A’s beneficiaries for the difference in value of estate assets, meaning B may owe the estate $1 million.
What do you do when an executor is helping themselves to estate assets?
As a NY estate lawyer, our firm just removed a fiduciary in a New York estate. The beneficiaries of the estate retained our NY estate lawyers nearly 8 years after the appointment of the executor. It was learned that this particular executor had helped himself to nearly half of million dollars of estate assets over an 8-year period. Additionally this particular fiduciary failed to pay any and all property taxes on the estate properties allowing them to fall into tax foreclosure.
Once retained our NY firm was able to remove this executor within 90 days of our appearing in this action. However instances of fiduciary misconduct are rarely so obvious and much more difficult to discover let alone prove. Historically, Surrogate’s Courts in NY are reluctant to remove fiduciaries once appointed. Removing dishonest executors can be a legal nightmare often costing the estate more money than is missing.
Just to give you an idea how frustrating dealing with an executor could be, in 2010, an elderly man, Ladislav Fromelius, took out a contract on the executor of his sister’s estate. His sister passed away leaving her brother Ladislav $100,000.00, who claims the executor was refusing to disburse. After years of trying to force the executor to distribute the bequest legally Ladislav took matters into his own hands, hiring a hitman who was actually an undercover police office to break the executor’s legs. The executor of his sister’s estate just happened to be Ladislav’s ex-wife. Although Ladislav only received probation, as a NY estate lawyer I do not suggest taking matters into your own hands.
How can I prevent an executor from misappropriating estate assets?
As a NY estate lawyer I can answer this question by simply telling you to be very careful before appointing your executor. In some cases it is better to appoint your second cousin once removed whom you meet once a year for coffee that you trust rather than someone closer to you who you may not fully trust. Once appointed, even with the help of an experienced NY probate lawyer it can be very difficult to remove an executor.
If you or a loved one are thinking about planning their estates, or suspect a fiduciary of misappropriating funds, please feel free to call a NY estate lawyer at The Law Offices of Jason W. Stern & Associates for a free consultation at (718) 261-2444. Our Queens estate lawyers have nearly 45 years of combined NY estate law experience drafting and probating the wills for families like yours in the counties of Queens, New York, Kings, Bronx, Westchester, Rockland, Nassau, Orange and Dutchess. Our offices have also been probating the wills for families in New Jersey as well.
