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My elderly relative is getting the shaft from estate lawyers in NY

post #1 of 15
3/11/09 at 8:55pm
Thread Starter 
An elderly relative of mine has been receiving monthly payments from her deceased stepmother's estate for the past 10 years. She receives the interest income from the estate, and then when she passes away, the bulk of the estate will be split among 7 heirs that her stepmother named.

The law firm handling the estate (which is in NY, but my relative now lives in Georgia) just sent her a letter stating that they've over-paid her to the tune of $40,000 over the last 10 years, and they will send her no further payments until the overpaid amount is rectified.

Now, she's panicked, of course, because her social security alone barely makes a dent in her monthly expenses.

She's come to depend on and expect the amount of money she received every month, and bought a condo, so she has mortgage payments, association fees, etc.

It seems to me that if they screwed up and sent her too much money, they should have to eat it by taking it out of their own fees (and I'm sure they pay themselves very well for taking care of the estate). But then, I'm not a lawyer.

She can't afford to hire a lawyer now of course, especially not knowing if she has a legal leg to stand on.

Any advice I can pass along to her about how to proceed next would be much appreciated.

EDIT: I forgot to also mention that part of the money she received every month came from a post office building (which her stepmother owned) that the government rents- the rental money was part of that.

Also, in the letter, they also said that they are doing an 'accounting' and upon completion, it will be filed with the surrogate's court of Rockland county and a 'citation' will be issued and served upon her and the 'remainder persons' (the 7 heirs, I gather) along with the copy of the accounting.
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post #2 of 15
3/11/09 at 10:11pm

Re: My elderly relative is getting the shaft from estate lawyers in NY

She should probably hire a CPA to audit the estate's books. Not sure how much cheaper than a lawyer that would be.
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post #3 of 15
3/12/09 at 9:09am

Re: My elderly relative is getting the shaft from estate lawyers in NY

So, they're saying they were sending her an extra $333 every month, huh? You'd think someone would have noticed that before 10 years had passed. The big question is if they are right or not about the mistake. A forensic accountant or CPA is the way to go in this, especially given the amount, which is substantial.

She may also wish to contact an estate or contract attorney, who may also be able to provide guidance. As it stands now, though, she has to take their word for it until she can prove otherwise.
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post #4 of 15
3/12/09 at 11:00am

Re: My elderly relative is getting the shaft from estate lawyers in NY

Obviously you should talk to a real lawyer. Initial consolation should not be that much. If it were me I would go back to the firm handling the estate and talk to them first. If they played hardball, bringing up these points might soften them up a little. They mismanaged the account and due to their error, your relative is now suffering hardship and could be due compensation. A bleeding heart newscaster could do a live news cast filming in front of their office showing how their firm's mistake could now put an elderly woman out of her condo and make her homeless. I am not necessarily saying that she can keep the $40K, but they should work with her to find a solution that works for everybody and not just themselves.
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post #5 of 15
3/12/09 at 11:05am

Re: My elderly relative is getting the shaft from estate lawyers in NY

It is not out of the ordinary for such mistakes to occur, but the estate's lawyers owe her an accounting, which she would receive as matter of right if she petitioned the court overseeing the estate.

Where did the stepmother reside? Where are the attorneys located?
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post #6 of 15
3/12/09 at 11:48am

Re: My elderly relative is getting the shaft from estate lawyers in NY

I agree with getting a lawyer even though she will have difficulty paying for one.

I'm wondering if she was really receiving interest on the estate. Interest implies that the estate consists of money in a bank, CD, etc.

Many estates consist of investments in mutual funds and stocks which pay dividends rather than interest. The value of the funds & stocks have plummeted in the past year and a half. If she was receiving income based on the value of the estate in mutual funds and stocks it would be quite possible for the value of the estate to be $40,000.00 below the paying threshold established for the estate.

Forgive my terminology. I'm not an attorney or investment advisor so I'm not up on the correct terms to use.
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post #7 of 15
3/12/09 at 1:06pm
Thread Starter 

Re: My elderly relative is getting the shaft from estate lawyers in NY

Quote:
Originally Posted by Michael Reuben

It is not out of the ordinary for such mistakes to occur, but the estate's lawyers owe her an accounting, which she would receive as matter of right if she petitioned the court overseeing the estate.

Where did the stepmother reside? Where are the attorneys located?

In the letter, they also said that they are doing an 'accounting' and upon completion, it will be filed with the surrogate's court of Rockland county and a 'citation' will be issued and served upon her and the 'remainder persons' (the 7 heirs, I gather) along with the copy of the accounting.

What exactly does 'citation' mean?

Her stepmother lived in Rockland county, which is also where the attorneys are.
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post #8 of 15
3/12/09 at 1:09pm
Thread Starter 

Re: My elderly relative is getting the shaft from estate lawyers in NY

Quote:
Originally Posted by Jay Taylor
I agree with getting a lawyer even though she will have difficulty paying for one.

I'm wondering if she was really receiving interest on the estate. Interest implies that the estate consists of money in a bank, CD, etc.

Many estates consist of investments in mutual funds and stocks which pay dividends rather than interest. The value of the funds & stocks have plummeted in the past year and a half. If she was receiving income based on the value of the estate in mutual funds and stocks it would be quite possible for the value of the estate to be $40,000.00 below the paying threshold established for the estate.

Forgive my terminology. I'm not an attorney or investment advisor so I'm not up on the correct terms to use.
I forgot to also mention that part of the money she received every month came from a post office building (which her stepmother owned) that the government rents- the rental money was part of that.
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post #9 of 15
3/12/09 at 1:44pm

Re: My elderly relative is getting the shaft from estate lawyers in NY

Quote:
Originally Posted by MielR
In the letter, they also said that they are doing an 'accounting' and upon completion, it will be filed with the surrogate's court of Rockland county and a 'citation' will be issued and served upon her and the 'remainder persons' (the 7 heirs, I gather) along with the copy of the accounting.

What exactly does 'citation' mean?

Her stepmother lived in Rockland county, which is also where the attorneys are.
A "citation" is just the name used in New York State for the court paper issued in a probate matter. In any other state, they'd say "notice" and the court would be called a "probate" court instead of a "surrogate's" court. The peculiarity of New York terminology just adds to the problems for an outsider trying to figure things out in a situation like this.

I'm not an estates attorney, but I'm sending you a PM with the name of one. Rockland is little far from his office, but he's worth a call. He's a friend, he's solid, and he knows his way around a surrogate's court.
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post #10 of 15
3/12/09 at 2:05pm
Thread Starter 

Re: My elderly relative is getting the shaft from estate lawyers in NY

Thank you so much, Michael.

She's had trouble with this firm ever since her stepmother died.

Any time she called to ask a question, or to question something they did, they treated her very rudely, like she was a gold-digger.

She hired a lawyer very early on to try and have them removed from handling the estate, but that didn't work, obviously.

A few months ago, she received a payment from them that was half of what she normally got- with no warning. When she phoned them,
one of the lawyers told her that they'd been overpaying her and that it was 'his fault'. He said at the time he was working on the
accounting, and that she'd probably be receiving payments that were much less than what she was used to getting due to the overpayment, but he never said she'd be getting NOTHING.

Thanks again!
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post #11 of 15
3/12/09 at 2:18pm

Re: My elderly relative is getting the shaft from estate lawyers in NY

Quote:
She hired a lawyer very early on to try and have them removed from handling the estate, but that didn't work, obviously.
Without knowing the specifics, I can't say I'm surprised. That's almost impossible to do, unless there's hard evidence of serious misconduct.

I'm just glad this was close enough geographically that I had a name to send you. Good luck!

(And in case anyone reading this is wondering: I don't accept referral fees. I won't get a thing out of this except the satisfaction of knowing that Miel was referred to somebody capable.)
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post #12 of 15
3/12/09 at 4:31pm
Thread Starter 

Re: My elderly relative is getting the shaft from estate lawyers in NY

Thanks, Michael - and thanks to everyone else for their advice, too!
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post #13 of 15
3/12/09 at 6:09pm

Re: My elderly relative is getting the shaft from estate lawyers in NY

When you see the accounting of the estate it will be important to know the specific language of the portion of the trust which grants her income.

It is common to see language allowing the income beneficiary access to additional assets (corpus - or principal) when necessary for health, education, support, or maintenance. If this trust includes that it should be her free pass. If the language is there then a simply worded letter to the trustee asking him to explain how he can reconcile that with his refusal to disporse more funds (worded nicely - really) should suffice. If they don't respond then they are HUGELY liable for breaking fiduciary duty (so send it registered). If that language is not there - well - I hope Michael's attorney is up for a fight.
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post #14 of 15
3/12/09 at 6:10pm

Re: My elderly relative is getting the shaft from estate lawyers in NY

Mier, I showed your post to a friend of mine who is a lawyer in Brooklyn and handles similar cases. Here is his initial response....

Quote:
Well, actually as I was reading the email, and before I got to the bottom of it, I was thinking that she should demand an accounting by the trustee. But, it sounds like they are going to do it for her. So, if the accounting petition is not served and filed soon, she has the right to petition the court for an accounting. That way, she can figure out if she got too much money or not over the years.
Obviously, if she was overpaid, the trustee may have the right to withhold payments due to its error.

Good luck!!
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post #15 of 15
3/12/09 at 9:04pm

Re: My elderly relative is getting the shaft from estate lawyers in NY

Quote:
So, if the accounting petition is not served and filed soon, she has the right to petition the court for an accounting. That way, she can figure out if she got too much money or not over the years.
Obviously, if she was overpaid, the trustee may have the right to withhold payments due to its error.
More or less what I said above. When a Brooklyn lawyer and a Manhattan lawyer agree, it must be true.
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