Contesting a transfer at death happens when your loved one transferred their property to someone shortly before they died and you suspect that the transfer was problematic.
When it comes to estate planning, a lifetime transfer is a tool in any New York estate attorney’s arsenal. Usually, with these transfers, a person planning what will happen to their estate can make sure that property goes to his or her beneficiaries without going through the Surrogate’s Court, hope to avoid creditors or possibly plan for future nursing home stays using Medicaid. This can be very useful for someone planning their estate and their beneficiaries. However, lifetime transfers are not always done willingly or by someone with the required mental capacity to make the transfer. Sometimes undue influence is involved with lifetime transfers, and even duress.
Transfers made before death can be subject to some of the most contentious litigation when it comes to estates. This can especially be the case in matters where there are indications that property was transferred at death due to factors such as fraud or duress or where it looks like someone who held a power of attorney may have abused that power. It is unfortunately common that not all gifts are transferred all so innocently.
What You Need to Know When it Comes to Contesting a Transfer at Death
When we contest a transfer at death, we start with a demand for an accounting by the executor of the estate that includes both the property that existed in the estate before death and also the property that was transferred to others in the weeks, months and years before death.
In addition to asking for an accounting, you must understand the issues that arise around the statute of limitations when it comes to contesting transfers at death. While it is possible to contest the transfer at death, there is a limited time to do so, usually just a few years from the transfer, or, in the case of the wrongful use of a power of attorney, six years from the end of that power of attorney. While this does put limitations on the types of gifts that you can contest, the statute of limitations still does allow for a rather long period of time to contest a wrongful transfer at death. Failure to sue during this time could result in you missing out on your rights to even file suit if you feel your loved one’s property was improperly transferred.
A person dies, and it emerges that their house or bank account is not a part of their estate, because it was already transferred to someone before their death. Or, someone was named as a beneficiary on a bank account or a life insurance policy. The one it was transferred to claims that the decedent gave them the asset. The other relatives don’t buy the story, say that the decedent was tricked into transferring the property and wish to contest the transfer at death. To determine who’s right, we need to look into the three possible reasons someone transfers property at death – as a gift, as a “straw-man” to shield from liabilities, and because of being tricked.
Gift? – people do transfer their assets to a favorite relative to exclude all others.
“Straw-Man?” – People can transfer property to others in an attempt to avoid creditors or divorcing spouses, to avoid taxes, or to qualify for Medicaid. When a property is transferred for various avoidance reasons, the person who transfers the property orally tells the one getting the property that they are just a “straw-man,” keeping the property in title but really owning it for the benefit of the person who transferred it. In such cases, the person receiving the property promises the person giving the property to be a proper “straw-man,” to let the person who owned the property benefit from it during their lifetime and to distribute it to the owner’s heirs after the owner’s death.
Or, Fraud, Duress, Undue Influence or Lack of Capacity – People also transfer property without wanting to do so. Some people are so sick that they can be easily convinced to do anything. Some are so dependent on others that they are easily persuaded. Some are just slipped papers and told to sign them without knowing what they are signing. Some are misinformed about family or financial circumstances, made believe certain things that makes them transfer the property to someone they trust.
When a pre-death property transfer is discovered, the person whom the property is transferred to claims that it was a gift, and the people who are left out claim that the recipient is merely a “straw-man”, or that fraud or duress took place.
It is up to the one wishing to undo the transfer to prove why the transfer should be undone. However, if it can be proved that the recipient of the asset was in a position of trust with the one who transferred the asset, the burden of proof can shift towards the recipient.
You must keep in mind that contesting transfers at death is not something that should be taken care of without representation. Proving either incapacity, abuse of a power of attorney or fraud or duress when it comes to transfers of property can be incredibly difficult. Hiring a New York estate attorney to assist you every step of the way in such a matter is necessary to be sure that you have a chance to reverse such a transfer, recapture the property for the estate, and get access to the property that you believe you deserve. An attorney can file a proceeding for discovery of property and a proceeding for turnover of property of the estate. Your case can be even further complicated if you need to contest the will as well, as there is a much stricter time period involved when it comes to contesting a Will than there is for contesting a transfer at death.
If you are involved in contesting a transfer at death of real estate, bank accounts or insurance policies, and wish to speak with an attorney, you can call me at (212) 233-1233.