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New Disclosure Requirements Regarding Commissions to an Attorney-Executor |
By: Lawrence N. Berwitz, Esq. & Maureen Rothschild DiTata, Esq.
Berwitz & DiTata LLP
Garden City, New York |
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In 1995, the legislature addressed the issue of the appointment of an attorney draftsman, or an attorney affiliated with the draftsman, as the executor, enacting Section 2307-a of the Surrogate's Court Procedure Act (SCPA). As originally enacted, Section 2307-a, requires that a testator who wishes to appoint his or her attorney or an affiliated attorney as an executor be informed, prior to will execution, that A(a) subject to limited statutory exceptions, any person, including an attorney, is eligible to serve as an executor; (b) absent an agreement to the contrary, any person, including an attorney, who serves as an executor is entitled to receive an executor's statutory commissions; and (c) if such attorney or an affiliated attorney renders legal services in connection with the executor's official duties, such attorney or a then affiliated attorney is entitled to receive just and reasonable compensation for such legal services in addition to the executor's statutory commissions. The failure to give such notice will preclude issuance of Letters Testamentary to the attorney draftsman or affiliated attorney nominated in the will. In addition, in the absence of a written acknowledgment of disclosure, signed by the testator and witnessed by at least one person, Section 2307-a imposes a statutory limitation of one-half of the statutory executor's commission for attorneys acting as executor. Under the statute, the written disclosure may be executed before, simultaneously with, or after the execution of the will.
Because the statute did not specify whether the acknowledgment must be by a separate writing or whether it was permissible to include it as a provision in the will, inconsistency among the judiciary has resulted. The New York County Surrogate's Court held that, to reduce the potential for over-reaching by the attorney draftsman, the acknowledgment of disclosure had to be a separate writing. In re Estate of Pacanofsky and Estate of Hinkson, 186 Misc. 2d 15, 714 N.Y.S.2d 433 (Sur. Ct. N.Y. Co. 2000). The Nassau Surrogate reached the same conclusion in In re Bruder, N.Y.L.J. Mar. 15, 2001, at 25 (Sur. Ct. Nass. Co. 2001). The Bronx Surrogate, declining to follow Pacanofsky, came to the opposite conclusion in In re Estate of Winston, 186 Misc. 2d 332, 717 N.Y.S.2d 879 (Sur. Ct. Bronx Co. 2000).
This conflict has been resolved with an amendment to Section 2307-a, signed by the Governor on November 16, 2004 and effective immediately. The amendment adds new language to Section 2 of the statute. It now specifically requires that the written acknowledgment of disclosure be set forth in a separate writing, which writing may be annexed to the will. The amendment also requires that the written acknowledgment of disclosure now contain an additional notice: that, absent execution of the disclosure acknowledgment, an attorney who serves as an executor shall be entitled to one-half the commissions he or she would otherwise be entitled to receive.
It is noteworthy that Section 2307-a (9), as enacted in 1995, was expressly applicable to wills executed on or after January 1, 1996 and, irrespective of the date of the will, to estates of decedents dying after December 31, 1996. With respect to wills executed prior to January 1, 1996, it provided that the subdivisions requiring notice to the testator and written acknowledgment of disclosure would not apply if the testator acknowledged receipt of the disclosure required in a writing that substantially conformed with the model language provided. Regrettably, the amendment does not address or update this subdivision. Practitioners would be well advised to contact clients who have nominated their attorney or an affiliated attorney as executor, provide them with the additional notice and request an acknowledgment of disclosure as specified in the amended section.
Editors Note: The author’s are with Berwitz & DiTata LLP, a Garden City based Elder Law firm. This firm concentrates in Estate and Retirement Distribution Planning; Estate Administration and Elder Law.
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