As our ability to work and conduct business remotely continues to expand and become more widely accessible, the likelihood that an individual will establish a financial footprint in more than one geographical location will increase. What happens if a non-domiciliary passes away with property located in New York or with significant ties to New York? How will a New York Surrogate’s Court accept jurisdiction in the Estate and to what extent? This article is a primer on these issues.

The Surrogate’s Court has jurisdiction over the estate of a nondomiciliary who owns real and/or personal property in New York or has a cause of action for wrongful death against a domiciliary of New York.1 Anon-domiciliary is a person whose permanent residence is somewhere other than New York (a “foreign” jurisdiction).

A proceeding relative to the administration of the estate of a nondomiciliary is governed by Article 16 of the Surrogate’s Court Procedure Act (the “SCPA”). SCPA §1602 provides for the ancillary probate of a Will. SCPA §1605 provides the circumstances in which New York will entertain applications for the original probate of a Will of a non-domiciliary.

SCPA §1602: Ancillary Probate

When a Will of a non-domiciliary has already been admitted to probate in the decedent’s domicile jurisdiction, it can be submitted for ancillary probate in New York pursuant to SCPA §1602.2 The only grounds for contesting an application for ancillary probate are that the conditions prescribed in SCPA §1602(1) have not been met or that the Will was denied probate in another jurisdiction.3

The Surrogate’s Court’s jurisdiction over these types of matters is based on the location of property in New York. A proceeding is required in New York to appoint a fiduciary to handle the administration of New York sourced assets and/or to prosecute One Decedent, Multiple Jurisdictions: What’s Your Next Step In New York? the cause of action for wrongful death. Most often, an ancillary proceeding is sought when a nondomiciliary decedent owns New York real property. However, an ancillary proceeding may also be commenced if a non-domiciliary decedent owns a vehicle, a boat, or a bank or brokerage account at a financial institution with a principal place of business in New York.

While all Surrogate’s Courts in New York have jurisdiction over an ancillary probate proceeding, the proper venue is one “(a) where the nondomiciliary decedent left property, … (b) where personal property belonging to the non-domiciliary decedent has since his death, disappearance or internment come into and remains unadministered, or (c) of the domicile of the person against whom a nondomiciliary left a cause of action for wrongful death.”4 If venue may lie in more than one county, for example, if the decedent owned several parcels of real estate in different counties in New York, the court in which the first proceeding is commenced has, and shall retain, jurisdiction for the purposes of all matters related to that decedent.5

If a petitioner attempts to commence a second ancillary proceeding, such proceeding will be dismissed. For example, in Estate of Walsh, petitioner attempted to seek ancillary probate in Bronx County after initially filing for ancillary probate in Westchester County because Westchester County requested additional documents prior to granting the petition.6 In support of its decision to dismiss petitioner’s application, the Surrogate of Bronx County stated since petitioner already opted to proceed in Westchester County “it would constitute an inappropriate countenancing of forum shopping” for the Bronx County Surrogate’s Court to entertain petitioner’s application.7

A petition for ancillary probate may be made by “any creditor, public administrator, county treasurer or person interested or to whom letters may issue” under Article 16.8 The class of persons entitled to receive ancillary letters testamentary are, in the following order, (1) the person listed in the Will to administer the property located in New York, (2) the person who received letters in the domiciliary jurisdiction or the person designated in the Will to administer property wherever located, (3) the person acting in the domiciliary jurisdiction to administer to the estate, and if none of such persons are available or qualify, (4) a person entitled to receive letters of administration c.t.a.9 The petition for ancillary probate must specify the property located in New York and the value and nature of such assets. The petition must also adequately identify the connection to the county in which the petition is being filed.

Exemplified copies of documents f iled in the foreign jurisdiction must be presented with the application. This includes a copy of the Will, the Decree or Order admitting the Will to probate and the Letters issued in the foreign jurisdiction.10 It may be that the foreign jurisdiction requires different evidence or documents to establish the validity of the Will and who was appointed as fiduciary. For example, many foreign jurisdictions do not have “letters testamentary,” but have a functional equivalent, such as a “Certificate of Executorship” which is issued in Germany. The Surrogate’s Court may request an affirmation or affidavit from a noninterested party, such as an attorney licensed to practice law in the foreign jurisdiction, explaining the documents submitted or the lack thereof, and/ or the general process and foreign statutes for establishing the validity of the Will in the foreign jurisdiction.

The New York State Department of Taxation and Finance (“NYSDTF”) is a necessary party to an ancillary probate proceeding and for that reason, a Waiver and Consent must be obtained or the NYSDTF must be cited to complete jurisdiction. The reason for this requirement is that the NYSDTF wants to verify that the decedent was not a New York domiciliary at the time of death and to make sure that any New York State estate tax due on the decedent’s assets located in New York is paid. The NYSDTF requests the following documents to issue a Waiver and Consent: documentation relative to the ancillary probate proceeding (i.e., death certificate, copy of the documentation related to the original probate, and a copy of the proposed ancillary probate petition), a completed New York State Estate Tax Domicile Affidavit (Form ET-141) and Stipulations Reserving Domicile (Form ET-20).11 If the documentation submitted is satisfactory, the NYSDTF will issue a Waiver and Consent to the ancillary probate of the Will.

Upon the issuance of ancillary letters, the fiduciary has the authority to administer and distribute the assets located in New York.

SCPA §1605: Original Probate

There are certain situations where an original probate of the Will of a non-domiciliary may be sought in New York (rather than ancillary probate). SCPA §1605 bestows discretion on the Surrogate’s Court to entertain such applications. When considering whether to exercise its discretion under this section and admit the Will of a non-domiciliary to original probate, the Court should consider:

“the nature of New York’s contacts with the decedent and [the decedent’s] estate, including (1) the location of decedent’s assets; (2) the residence of the nominated fiduciaries and beneficiaries; (3) the expense of proving the will in the decedent’s domicile; (4) the decedent’s request, if any, for New York probate; and (5) the good faith of the proponents.”12

Another factor routinely considered is whether the law of the decedent’s domicile “discriminate[s] against New York fiduciaries named in the Will.”13

In Matter of Proios, the Surrogate of Nassau County admitted the Will of a Colorado resident to original probate because the decedent did not leave any probate assets in Colorado and the cause of action on behalf of the decedent’s estate was situated in New York.14 In Matter of Nelson, the Will of a Pennsylvania domiciliary was admitted to original probate by the Surrogate of New York County because the propounded Will contained a provision which indicated the decedent contemplated New York probate, there was litigation related to the Estate pending in New York, the nominated fiduciaries and attesting witnesses resided in New York and all but one interested party consented to probate in New York.15

On the other hand, in Matter of Nevai, the Surrogate of Westchester County court refused to entertain original probate of the Will of a Florida domiciliary.16 In support of its decision to deny the application, the Court stated that while the Will nominated two of four fiduciaries that would not
qualify to serve in Florida, there were two individuals that were eligible to serve.17 This fact, coupled with the fact that there was a pending proceeding in Florida, which was in the midst of being litigated, led the Court to conclude that it would be prejudicial to entertain the application for original probate in New York.18

If, on the other hand, a Will has been granted probate in another jurisdiction, original probate of that Will is not permitted in New York except under limited circumstances, i.e. “(a) in a case where the court is satisfied that ancillary probate would be unduly expensive, inconvenient or impossible under the circumstances, (b) where the [decedent] has directed in such will that it shall be offered for a probate in this state or (c) where the laws of [the decedent]’s domicile discriminate against domiciliaries of New York either as a beneficiary or a fiduciary.”19

In summary, the decision whether to admit the Will of a non-domiciliary to original probate in New York is entirely discretionary and fact specific, and this should be taken into account when deciding the best avenue to pursue.

Estate Planning Considerations

While the SCPA permits New York courts to entertain jurisdiction over the estate of a non-domiciliary, these proceedings can prove to be both time consuming and expensive. Therefore, a practitioner representing a non-domiciliary with New York sourced assets (most often real estate) should address whether such New York sourced assets can be structured in a way such that original and/or ancillary probate need not be necessary.

Possible estate planning strategies include, but are not limited to, (1) establishing a revocable trust to hold New York sourced assets, (2) titling the New York sourced assets such that they pass by operation of law (i.e., joint owners or transfer-on-death designations) and/or (3) creating an entity structure such as a limited liability company to own New York sourced assets. The determination as to which, if any, of these strategies work for must be made by the practitioner, following an evaluation of the client’s assets, wishes and desires.

Conclusion

In summary, proceedings related to the estate of a non-domiciliary of New York can be complex and fact-specific. It is important for trusts and estates practitioners to be well versed in these proceedings and the laws regarding the estate of a non-domiciliary in order to meet the needs of any such client.

1. See SCPA §206; see also In re Estate of Nevai, 7 Misc. 3d 188, 190 (Sur. Ct., Westchester Co. 2005).
2. See SCPA §1602(1); see also Matter of Obregon, 91 N.Y.2d 591, 599 (1998).
3. See SCPA §1602 (2).
4. SCPA §206(1); see Sheahan v. Rodriguez, 753 N.Y.S.2d 664 (Sur. Ct., Bronx Co. 2002).
5. See SCPA §206(2).
6. See Matter of Walsh, 491 N.Y.S.2d 84 (Sur. Ct., Bronx Co. 1985).
7. Id.
8. SCPA §1609.
9. SCPA §1604.
10. See Matter of Hahnel, 88 Misc.2d 524, 524-530 (Sur. Ct., New York Co. 1976) (granting ancillary letters on German holographic Will based on Decrees and decisions of German court).
11. See https://www.tax.ny.gov/pdf/current_forms/et/au67.pdf
12. See SCPA 1605(1); see also In re Estate of Nevai, 7 Misc. 3d 188, 190 (Sur. Ct., Westchester Co. 2005).
13. See Matter of Gadway, 123 A.D.2d 83, 86-87 (3d Dep’t 1987) (granting original probate to Will of Florida domiciliary because decedent had substantial assets in New York, the Will was executed in New York, a majority of beneficiaries resided in New York and Florida law prohibited Petitioner from serving as fiduciary); see also Matter of Brown, 107 Misc.2d 970, 971-973 (Sur. Ct., New York Co. 1981).
14. See Matter of Proios, 37 Misc. 3d 1230(A), at *3 (Sur. Ct., Nassau Co. 2012); see also Matter of Goldstein, 34 A.D.2d 764 (2d Dep’t 1970) (admitting Will of Florida domiciliary to original probate because all assets were located in New York, the Will was drafted and executed in New York, most beneficiaries preferred New York probate and fiduciaries would be disqualified from serving in Florida).
15. See Matter of Nelson, 125 Misc.2d 451, 454-455 (Sur. Ct., New York Co. 1984).
16. See In re Estate of Nevai, 788 N.Y.S.2d at 845.
17. Id.
18. Id.
19. SCPA §1605(2).

 

This article was published on the Nassau Lawyer on March 5, 2023.