To serve as a fiduciary in a New York estate, a person is eligible except for the following:
- Non-domiciliary aliens, except a foreign guardian or a person who serves with a New York co-fiduciary;
- Convicted felons;
- Persons who do not possess the qualifications required of a fiduciary by reason of substance abuse, dishonesty, improvidence, want of understanding, or who are otherwise unfit of the execution of the office;
- Persons who cannot read or write English if the court in its discretion declares them ineligible.
This list of ineligible persons is enumerated in SCPA 707.
What Does Not Make A Person Ineligible To Serve As A New York Fiduciary?
If a nominated fiduciary’s issues do not fall within SCPA 707, the fiduciary is considered eligible to serve in New York. A fiduciary is not ineligible because the person is:
- Physically disabled;
- Indebted to the estate;
- Hostile to a beneficiary (unless such hostility interferes with the estate administration);
- A creditor of the estate; or,
- A person with a conflict of interest with the estate.
Failure To Possess the Qualifications Required of A Fiduciary
Perhaps the most ambiguous ground rendering a person ineligible to serve as a fiduciary in New York is someone 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 of the execution of office. We have written about dishonesty as a ground rendering a person ineligible to serve here.
Regarding substance abuse, the abuse must be habitual or chronic.
For a person to be ineligible to serve as a fiduciary in New York because of “improvidence,” the improvidence must be such that the estate is unsafe or at risk of being lost or diminished if the person serves as the fiduciary. In Matter of Paterniak (Sur. Ct. Nassau County 2003) the nominated executor had effected a few “irregular” and “misguided” financial transactions while she held the decedent’s power of attorney. The Surrogate’s Court appointed her as fiduciary anyway because the court determined that she had safeguarded and accounted for all of the decedent’s assets.
In contrast, in Matter of Isaacson (Sur. Ct. Kings County 2008), a nominated executor who transferred large sums of money to himself while serving as attorney-in-fact for the decedent was found ineligible to serve as fiduciary of the New York estate.
Hostility that Interferes With the Administration of The Estate
An estate beneficiary does not want someone that has hostility towards them to serve as the fiduciary. However, New York law does not disqualify someone as a fiduciary for mere hostility. The hostility toward the beneficiary must be so severe that it interferes with the administration of the estate in order to be disqualifying.
An example of disqualifying hostility is Matter of Beharrie (Sur. Ct. Kings County). In Beharrie, the petitioner for letters was the mother of two of the decedent’s non-marital children. The petitioner did not get along with the mother of another of decedent’s non-marital children, refused to vacate the decedent’s property, and threatened litigation. In this case, the hostility was deemed to be severe enough to interfere with the estate administration, and thus the petitioner was ineligible to serve.
Does A Will Challenge Make A Fiduciary Ineligible To Serve In New York?
No. In Matter of Fodera, 465 N.Y.S. 2d 65 (2d Dep’t 1983), the proponent of the will offered the will for probate. The nominated executor objected to the probate of the will on the grounds that the will had been forged. The Surrogate’s Court admitted the will to probate, and also held that the nominated executor was ineligible to serve as fiduciary because of the challenge to the validity of the will. The appellate court reversed the surrogate court’s decision, holding that the will challenge did not render the nominated fiduciary ineligible to serve.
Can A Corporation Serve As A Fiduciary In New York?
Yes. A corporation can serve if it is a sole or residuary legatee of the New York estate. SCPA 1418(4) states:
A corporation incorporated within the territorial limits of the United States which is a sole or residuary legatee may act as administrator with will annexed although not specifically so authorized by its charter or by any provision of law.
A corporation can also serve as a fiduciary in New York if the charter of the corporation authorizes so serving. If the corporation is not authorized by its charter or under New York law, the corporation cannot serve.