The Estate of Rudolph G. Gulbrandsen NY Slip Op 50814(U) presents some interesting aspects of the issue of conflict of interest involving a fiduciary. The decision, by Dutchess County Surrogate James D. Pagones was republished on May 15 at page 23 of the New York Law Journal and deals with the case of Sara Jane Gulbrandsen who was convicted of killing her husband Rudolph and is now serving a prison sentence for that crime.

While there is no issue in applying the well-settled principal of law that a killer shall not profit from his or her wrongdoing, a novel issue rises from the fact that the preliminary executrix of the decedent is also a close friend of the widow who is responsible for his death. This has drawn objections from Christine Basler, the decedent’s daughter who has applied to have an independent administrator CTA (meaning "with the will annexed") appointed to handle the balance of the matter in place of Laura Klinski who was nominated in the will by the decedent.

The reason for Ms. Basler’s concern is the relatively short statute of limitations which controls the right of an executor or administrator to commence an action for the wrongful death of the decedent. If such an action is not commenced within the statutory period, the estate will lose the ability to recover the portion of the joint assets of Mr. and Mrs. Guldbrandsen which belong to Sara Jane Gulbrandsen and which are not subject to forfeiture based upon her crime. If the preliminary executrix fails to bring such an action in time because she is the friend of the incarcerated spouse, the estate will obviously lose out.

Surrogate Pagones has ruled that since preliminary executrix Klinski has conducted her affairs appropriately to date, pending the submission of her accounting (which he has ordered), there is no reason to remove her from her fiduciary position. He has seen the conflict of interest here as "potential" and not deserving of action on the court’s part unless actual misconduct should occur.

Do you agree with the Surrogate’s take on these facts with less than one year remaining on the statute of limitations for the estate to take action ? If there is an appeal, will the Appellate Division affirm the lower court or will it direct the removal of the fiduciary? Will preliminary executrix Klinski take a cue from the decision and commence an action for wrongful death against her friend? Tune in for further details!