The New York State Court of Appeals has just handed down a decision in The Matter of Hausman 2009 NY Slip Op 08854 which has upheld an Appellate Division decision setting aside a deed executed by the decedent in favor of an LLC formed by two of her children two weeks  before they actually filed the articles of organization with the secretary of state. The court ruled that because the  filing had not been made before the deed was executed, the corporation lacked the legal ability to take title to the property . The problem here that although the deed might have been ruled valid under the de facto corporations rule (which is what the Surrogate’s Court did initially), there needed to have been some colorable attempt to comply with the statutes governing the organization of corporations before the deed was executed. Because the children of the decedent failed to submit any proof that they had at least tried to file the articles of organization before the execution of the deed, it was determined that the conveyance had failed and the deed was set aside with the property ending up in the residuary of the estate. Since the residuary was to be shared equally between her children , per stirpes, the property was shared with the minor grandchildren of the decedent who had survived two predeceased sons.  

Bronx County Surrogate Lee Holzman, in a case of first impression, has found that a decedent’s posthumous non-marital son was entitled to posthumous DNA testing to determine his standing as a potential distributee of his late father. This decision on a motion in the Estate of Jermaine Michael Williams was rendered on December 3rd and was also reported in today’s New York Post appears to be the first time a request for posthumous testing was made on behalf of a posthumous child.

Continue Reading DNA Test Ordered By Surrogate In Case Of First Impression

As reported today by fellow lawblogger Karen Meckstroth in her Bay Area Wills, Trusts And Probate Report Blog  two Representatives have filed different bills to amend the Internal Revenue Code and to restore the estate tax which would otherwise terminate for one year in 2010. The bills proposed by Rep. Berkley (D.NY) and Rep. Schrader (D-OR) may each be viewed by clicking on the link provided by Ms. Meckstroth in her article. Both provide for an increase in the basic estate tax exemption to 5 million dollars. and for a reduction in the maximum estate tax and gift rate.

Continue Reading New Bills To Restore The Estate Tax In The Congressional Hopper

More than forty years after the death of Martin Luther King Jr., his children have resolved a bitter dispute over his multi million dollar estate. As reported by Bruce Carton in an article posted on Legal Blog Watch today, the lawsuits and countersuits stemming from charges of misuse of estate funds and seeking control over various assets have been settled, the family seeking to move on and preserve the legacy of their late father. An interesting sidelight of the story is that the estate retains a legal interest in the copyright of Dr. King’s famous "I Have A Dream" speech that thrilled those present at the March on Washington in August 1963 . In 1999, the 11th Circuit Court of Appeals ruled that  the "public  performance" of the speech, did not constitute "general publication’ so as to cause the copyright to be forfeited.

Recently, your faithful lawblogger attended a seminar at the local bar association which was emceed by Nassau County Surrogate John Riordan. The surrogate took this opportunity to discuss  the recently decided case of Schoeps v. Andrew Lloyd Webber Art Foundation which is reported at 884 NYS2d396. This First Department Appellate Division case is of interest on several levels. It deals with the attempt of  a German national to recover a multi-million dollar Picasso painting which he alleged was part of a huge art collection sold for a fraction of its true value when the Nazis were seizing Jewish assets in pre-war Germany.

Continue Reading Court Leaves Door Open For Foreign Heir To Exercise Fiduciary Rights

Like so many of my readers, the mere mention of the Generation Skipping Tax causes my eyes to glaze over.  I usually break into a cold sweat before I consult the books –and the experts– in order to deal with a particular  GST problem. Your faithful law blogger still believes in calling in the experts in GST estate planning situations, but I think you will find this article by Mark Powell Esq. in this month’s Journal of Accountancy  to be quite helpful .

 

The New York Times has just reported that a Westchester County Jury has convicted Anthony D. Marshall, 85 year old son of the late socialite Brooke Astor of fourteen counts of stealing from his mother’s estate. Also convicted of forgery was Francis X Morrissey, former attorney of Ms. Astor.  The jury returned its verdicts after twelve days of deliberations and after things had reached the point where it appeared that it may have reached an impasse which would have resulted in a mistrial.

Continue Reading Jury Convicts Brooke Astor’s Son and Her Former Lawyer For Plundering Her Estate

New York’s Fourth Department Appellate Division has laid down the marker for a trustee’s fiduciary responsibility in Capital Heat, Inc. v. Michael R. Blatner Family Trust reported at  882 N.Y.S.2d 632. This matter involved a life insurance agreement made by the plaintiff with the defendant trust when the trustee was also a shareholder and an employee of the plaintiff. In reversing a motion for summary judgment granted by the lower court against the trust for the value of the policy premium, the court ruled that "a fiduciary’s duty requires ‘not honesty alone but the punctilio of an honor the most sensitive’" with ‘ "undivided and undiluted loyalty to those whose interests the fiduciary is to protect’ ".

Your lawblogger has reported on this case because it sets forth the obligation of a trustee in a nutshell. Not even the slightest hint of self-dealing is tolerable in the relationship between a fiduciary and those whose interests he or she is to protect. Although this is a "bright line" distinction,  it is sometimes difficult for a fiduciary to recognize a problem when it occurs. Keep in mind that the obligation of a fiduciary is unforgiving and  — in the absence of either a duly executed release or a court order– without end. It is therefore important for trustees to carefully review their financial decisions with counsel in order to insure that they are acting appropriately.

New York State’s new form for a power of attorney which takes effect on September 1, 2009 marks a major change in the law. It may be found in Section 644 of New York’s General Obligations Law. As I reported earlier, the effective date of the law was postponed from this past February to give the bar a chance to become familiar with the new form and its pitfalls. The changes are so complex that a second law to amend the first and to correct some of its inconsistencies and shortcomings was needed. Unfortunately, those  unruly children who comprise the august body some folks call the New York State Senate were so busy this summer having what can only be seen as a legislative food fight that virtually no meaningful work was done for weeks and this most important piece of legislation has not yet been signed into law. This can only add to the possibility that the new law will become an attorney’s relief act.

Continue Reading New York’s New Power Of Attorney Mandated for September First

In a surprise move, the prosecution in the Brooke Astor trial rested its case, according to the New York Times. The trial has now been front page news in New York for three months.  The trial of  Ms. Astor’s son Anthony Marshall and his attorney Francis X Morrissey for allegedly forging a codicil to her will has had countless  twists and turns. Marshall and Morrissey are facing a total of 22 charges of conspiracy, scheming to defraud, larceny and forgery. This is enough to keep a battalion of lawyers busy at a cost of over $100,000 per week.

Continue Reading After Three Months, The Brooke Astor Trial Is Becoming –Dare We Say?– Boring