New York Estate Litigation: Recovering Estate Assets

Parisi, Coan & Saccocio, PLLC

People who handle another person's assets or property are known as fiduciaries. All fiduciaries, including executors, trustees, and agents under powers of attorney, are obligated to conduct themselves honestly and in accordance with the law. Fiduciaries must also act in the best interests of the trust or will in accordance with its terms, as well as collect and protect estate assets.

Breach of Fiduciary Duty

A breach of fiduciary duty occurs when one party fails to act in the best interests of another. Cases involving breach of fiduciary duty frequently arise when it appears that a third party is withholding assets from a decedent's estate. These assets may include bank accounts, stocks, property, and retirement accounts. It is the fiduciary's responsibility to pursue the recovery of the property or its value, and when there is doubt about whether a fiduciary acted appropriately, a beneficiary or other interested party may file an action against that fiduciary. In these cases, the Surrogate's Court Procedure Act establishes a statutory procedure for recovering estate property.

SCPA 2103 Discovery Proceedings

New York Consolidated Laws, Surrogate's Court Procedure Act - SCP § 2103 allows estate representatives to conduct extensive discovery to gather information about potential estate assets and to pursue a hearing or trial for the return of the property. According to SCPA 2103 SCPA §2103(2) sets forth the property that can be sought:

“Any and all personal or real property in which decedent had any interest, including choses in action, money deposited and all property rights of the depositor consequent on the deposit of money by a decedent, grantor or fiduciary or for his account with any authorized banking organization in respect of which the depositary claims no beneficial interest other than its proper costs, fees or expenses.”

An SCPA 2103 discovery proceeding is used in New York to discover assets in an estate and can be initiated against anyone who has “possession, control, knowledge, or information” about assets held in the estate.

A SCPA 2103 procedure has two phases: the discovery phase and the turnover phase. The purpose of the discovery process is to find out who took the property and get it returned to the estate. These proceedings can have a broad scope. Instead of proving beyond a reasonable doubt that the person in question has stolen the assets, the complainant need only show the court that the person in question: has the assets, knows where the assets are, or believes the person knows where the assets are. The discovery proceeding may be converted into a turnover proceeding (phase 2) if, after examination, the complainant still believes the individual in question is in possession of the assets.

It should be noted that when a beneficiary is involved, it is frequently more efficient to compel an accounting rather than initiate a SCPA 2103 discovery procedure. Beneficiaries or other interested parties, have the right to force the executor/trustee to provide an accounting of all the financial details of the estate. An accounting, if Ordered by the Court to be provided, must comply with the rules and requirements set forth under New York State Law. The accounting gives precise information on the assets that were in the decedent's estate at the time of their death. The estate accounting will often also detail any new property that has been added to the estate since the decedent passed away, how the estate funds were used, what property is still in the estate at the time the accounting is completed, and what will be done with the remaining assets.

Locating and recovering estate assets can be challenging. Financial transactions, missing or ambiguous documents, and concealed assets can all make it difficult to determine who owns what. In these types of cases, particularly when an executor may be attempting to conceal certain financial facts from the beneficiaries, clients in New York and North Carolina benefit greatly from Attorney Gerard Parisi's experience as an attorney, a Certified Public Accountant, and an auditor. Call 914-228-7448 or contact us online to schedule your consultation.

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