Family Law & Guardianship Service
Proper guardianship of minor children is of the utmost importance for almost all parents. Whether it’s a divorce you are going through or just playing on the safer end, appointing a guardian for the protection of your children, next to you ought to be in reliable hands.
Guardianship of minors is one thing; the state of New York has laws for the Guardianship of intellectually handicapped or developmentally challenged adults as well; the same can be said for adults who have become incapacitated in the later stages of their lives. Since the state of New York recognizes persons over the age of 18, legally ‘adults’, an article 17-A guardianship certificate is field in the Surrogate’s Court, proving that the ‘adult’ said, is either incapacitated or/and developmentally disable.
This is where my work begins, as Guardian Ad Litem or GAL, it is my job to ensure the best interests of the child and the adult responsibilities cases are diligently seen to.
Family law matters in the Surrogate’s court settings most often involve issues related to the elective share, an estate share to which the surviving spouse is entitled by operation of law. New York case and statutory law imposes upon New York State resident spouses many duties during life; a spouse cannot avoid some of those duties in death. The surviving spouse is entitled to a minimum share of the deceased spouse’s estate. The law carefully defines the amount to which a surviving spouse is entitled. The share to be paid cannot be avoided by most inter vivos transfers, but as with any right, it can be affected by the claimant’s words and actions. The provisions of Estates, Powers and Trusts Law 5-1.1-A (EPTL) affect the manner in which the elective share is measured, its character and from what property it shall be paid.
Size and Character of the Elective Share
A spouse’s elective share equals the greater of (1) $50,000 or (2) one-third of the net estate (as discussed and defined below).1 The calculation of a spouse’s elective share is not based upon the size of his or her own assets, regardless of the source of such assets. The elective share is a pecuniary amount, not a fractional share of the estate. Thus, income earned by the estate prior to its distribution will not be included, nor will the appreciation or depreciation of estate assets be taken into account.
The computation of the surviving spouse’s elective share is only part of the process. The share of the testamentary provisions to which the surviving spouse is entitled is his or her elective share amount, reduced by certain interests passing to him or her. The amount as so reduced equals the surviving spouse’s “net elective share”.
A decedent’s estate consists of the property passing under his or her will, property passing by intestate distribution pursuant to EPTL 4-1.1, plus the “testamentary substitutes” described in EPTL 5-1.1-(b)(1).A decedent’s net estate is determined by reducing the decedent’s estate by debts, administration expenses and reasonable funeral expenses. For right of election purposes, the decedent’s estate includes all property of the decedent wherever situated. Thus, the surviving spouse has a right of election against real and other property of the decedent located outside New York State.
Who pays debts and administration expenses
Not all obligations are treated as debts for purposes of defining the net estate. If they were, an individual could easily defeat his or her spouse’s right of election simply by executing a contract to bequeath his or her estate to some other individual or individuals. New York courts, for example, have held that an obligation contained in a separation agreement to bequeath a portion of an individual’s estate or specific assets to a former spouse is subordinate to a subsequent spouse’s right of election. The beneficiary of a contract to make a bequest often is viewed by the courts as a legatee rather than as a creditor. In contrast, a decedent’s obligation under a separation agreement to make post-death alimony payments is treated as a debt that reduces the estate that is subject to the right of election. The distinction between the two is tenuous. A debt that matures on the death of a decedent spouse seems to fall somewhere between the two. It is unclear how it will be treated under EPTL 5-1.1-A.
Only those administration expenses that are reasonable and proper may be deducted from the decedent’s estate in determining his or her net estate. If the executor of a decedent’s estate cannot establish that certain expenses are necessary for the proper administration of the estate, then such expenses are not deductible as administration expenses for purposes of calculating the elective share.
Gratuitous Transfers and Gifts
Gratuitous transfers of property made after August 31, 1992, and within one year of the decedent’s death, are treated as testamentary substitutes pursuant to EPTL 5-1.1-A(b)(1)(B), except to the extent that such transfers are excludable from gift tax by operation of Internal Revenue Code § 2503(b) (I.R.C.) (the annual exclusion, which in 2014 is $14,000 per donee and is adjusted for inflation in $1,000 increments) and I.R.C. § 2503(e) (the exclusion for amounts paid for tuition or medical care). The amount excluded from gift tax under I.R.C. § 2503(b) as a result of the spouse’s election to split the gift also is not taken into account in determining the aggregate transfers within one year of death.
Gifts causa mortis are not encompassed within EPTL 5-1.1-A(b)(1)(B) because they are specifically designated as testamentary substitutes under clause (A).20 Also excluded from the operation of clause (B) are transfers of interests in retirement plans and releases of presently exercisable general powers of appointment, which are specifically dealt with in clauses (G) and (H), respectively.
Property Payable Under a Thrift, Savings, Retirement, Pension, Deferred Compensation, Death Benefit, Stock Bonus or Profit-Sharing Plan, Account, Arrangement, System or Trust
Property payable under a thrift, savings, retirement, pension, deferred compensation, death benefit, stock bonus or profit-sharing plan, account, arrangement, system or trust is a testamentary substitute. This provision covers both qualified plans under I.R.C. § 401 as well as nonqualified plans. As to qualified plans with respect to which payment is in the form of a joint and survivor annuity for the participant and his or her spouse or the spouse is entitled to a survivor’s annuity if the participant dies after the annuity starting date, only one-half the value of the decedent’s interest in the property constitutes a testamentary substitute. Although the other half also passes to the surviving spouse, it is not charged against his or her elective share. Estates, Powers and Trusts Law 5-1.1-A(b)(1)(G) does not apply if the decedent designated the beneficiary or beneficiaries of the plan benefits on or before September 1, 1992, and did not change the beneficiary designation thereafter. A spouse’s waiver of the right to receive any such survivor annuity constitutes a waiver against the testamentary substitute. (Technically, a spouse must sign a consent to the participant’s waiver of such benefit.)
Surviving Spouse’s Burden of Proof
Joint bank accounts, joint tenancies or tenancies by the entirety are testamentary substitutes only to the extent that the decedent made the deposits or provided the consideration for acquisition of the property held jointly or by the entirety. If such a transfer benefits a third party, the surviving spouse has the burden of proving the decedent’s contribution. If the third party made all the contributions, there is no transfer by the decedent against which the surviving spouse can elect.
Where the spouse is the other joint owner, it will be conclusively presumed that the proportion of the decedent’s contribution is only one half. As a result, the spouse is deemed to own one-half in his or her own right and also has the right to elect to take one-third of the other (the decedent’s) half interest. See, however, In re Estate of Solomon, in which it was held that a residence purchased by the decedent and his wife prior to September 1, 1966, as tenants by the entirety did not constitute a testamentary substitute under clause (E) since it was not a “disposition of property . . . made after August 31, 1966.” Compare In re Estate of Cahill, where a contract to sell the property held as tenants by the entirety which was entered into on March 28, 1966 with the closing on November 17, 1966 was held to constitute a testamentary substitute because transfer of title is accomplished only by the delivery and acceptance of an executed deed, and title to the property was not conveyed until after August 31, 1966.
SCPA Article 17 governs the appointment, duties and authority of a guardian of an infant (any child under the age of 18). A guardian may be appointed of the person and property, of the person only, or of the property only of an infant. The proceeding is brought in the Surrogate’s Court of the County where the infant is domiciled or if he/she is a non-domiciliary but has property situated in that County. If an infant is to receive monies over the amount of $10,000.00 pursuant to the terms of a will, by the laws of intestacy, or by a wrongful death proceeding, a petition for guardianship is required by the Court. See FORMS for petition and supporting documents.
SCPA Article 17-A governs the appointment, duties and authority of a guardian of mentally retarded and/or developmentally disabled persons. For purposes of Article 17-A, it is a person who has been certified by one licensed physician and one licensed psychologist (or by two licensed physicians, at least one of whom has professional knowledge in the care and treatment of persons with mental retardation/developmental disability) as being incapable to manage himself/herself and his/her affairs by reason of mental retardation or developmental disability and that such condition is permanent in nature or likely to continue indefinitely. See
Guardian as fiduciary
The granting by the court of an administration or probate decree does not totally dispose of the matter. The fiduciary must still acquire evidence of his or her authority to act. Such evidence takes the form of letters. Depending on the nature of the fiduciary’s authority, different types of letters will issue: letters of administration to an administrator, letters testamentary to an executor, letters of trusteeship to a trustee, letters of guardianship to a guardian, etc. To receive letters, a fiduciary must be eligible and must qualify.
The criteria for determining eligibility of any fiduciary are contained in SCPA 707, which provides as follows:
Letters may issue to a natural person or to a person authorized by law to be a fiduciary except as follows:
- Persons ineligible
(a) an infant
(b) an incompetent
(c) a non-domiciliary alien except one who is a foreign guardian as provided in subdivision four of section one thousand seven hundred sixteen of this chapter, or one who shall serve with one or more co-fiduciaries, at least one of whom is resident in this state. Any appointment of a nondomiciliary alien fiduciary or a New York resident fiduciary hereunder shall be made by the court in its discretion
(d) a felon
(e) one who does not possess the qualifications required of a fiduciary by reason of substance abuse, dishonesty, improvidence, want of understanding, or who is otherwise unfit for the execution of the office.
- Persons ineligible in court’s discretion. The court may declare ineligible to act as fiduciary a person unable to read and write the English language. A person who is ineligible to receive letters is not rendered eligible by a nomination in the will. Thus, the attorney-draftsman should ensure that all nominated fiduciaries are eligible to serve at the time the will is drafted.