Potential Pitfalls of an Out of State Executor: Keep New York Estate Assets in New York

By  Jennifer F. Hillman

Pursuant to New York Surrogate Court Procedure Act ("SCPA") § 711, a fiduciary cannot remove property of an estate from New York without prior approval of the Court.  A violation of this duty could lead to suspension, modification of letters testamentary or removal of a fiduciary.  While this concept seems simple enough, the full import of this mandate is sometimes unrealized.  Particularly where the fiduciary is located out of state.

For example, mom dies in New York and daughter who lives in Connecticut receives letters testamentary.  Daughter cannot bring the furnishings, artwork or any personal property to her garage or storage unit in Connecticut.  The property cannot leave New York State, unless and until it is being finally distributed.  One common mistake occurs when opening the estate bank account and transferring assets.  This estate account must be opened in New York, even if it is a large bank with branches nationwide.

In Matter of Petrocelli, 307 A.D.2d 358, 763 N.Y.S.2d 74 (2d Dep't 2003) [enhanced version available to lexis.com subscribers], the executor of a New York estate deposited estate dividend checks into an estate account in a Connecticut bank where she was employed.  Objections were interposed that this removal of estate assets was in violation of SCPA 711(7).  Ultimately, the court determined that the conduct did not harm the estate because all of the money deposited in the subject accounts were reported in an estate accounting.  However, no fiduciary should put themselves in this position.

In Matter of Turrentine, 83 Misc. 2d 170, 371 N.Y.S.2d 615 (Sur. Ct. Schenectady County 1975) [enhanced version], the executor moved all of her accounts and assets of the estate to Texas and it was alleged that she had no intention of ever taking up residence in New York in the future.  While the court felt this was not an intentional violation of the law, it still deemed it necessary that all estate assets be delivered to the estate attorneys in New York to be kept in their custody until further court order.           

A fiduciary role is a serious undertaking that should not be taken lightly.  An out of state fiduciary should be particularly cognizant of SCPA 711(7) and other rules that may particularly affect them.  

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Jennifer F. Hillman is an attorney at Ruskin, Moscou Faltischek, P.C., Uniondale, New York where her practice focuses in the area of trust and estate litigation.  She can be reached at jhillman@rmfpc.com

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