After a death, the family sometimes discovers that bank accounts, real estate, investment portfolios or valuable personal property left the decedent’s name in the weeks, months or years before death. The transfer may have gone to a caregiver, a new spouse, a relative who saw an opportunity, or a financial advisor. In many of these cases the decedent lacked the mental capacity to authorize the transfer, was pressured or manipulated into it, or was simply defrauded. New York law gives the estate and the rightful heirs remedies to get the property back.
We represent beneficiaries, heirs, executors and administrators in litigation to recover property wrongfully transferred before death, and we defend recipients who are accused of it. The cases involve undue influence, lack of capacity, fraud, forgery, breach of fiduciary duty and abuse of powers of attorney, and we handle them in the Surrogate’s Courts of Manhattan, Brooklyn, Queens, the Bronx and Staten Island and the surrounding counties.
Understanding Pre-Death Asset Transfers in New York
Not every transfer before death is improper. Elderly people legitimately move assets for estate planning, to qualify for Medicaid, or to make gifts to children and grandchildren. The problem arises when the circumstances suggest that the decedent did not understand what was being signed, was pressured into signing it, or was deceived about what the document did.
The transfers that most often warrant a challenge take a few recognizable forms. The commonest is a deed of the family home in Manhattan, Brooklyn or Queens to one child or to a caregiver, cutting out the other heirs. Others are changes to the beneficiary designations on life insurance, IRAs, 401(k)s and annuities; the addition of a joint owner to an account that was individually owned, which converts it into a joint account with right of survivorship; transfer-on-death and payable-on-death designations placed on brokerage and bank accounts; and lifetime gifts of cash, jewelry, artwork or other valuables.
Two more categories involve a fiduciary. An agent under a power of attorney may transfer the principal’s assets beyond the authority granted or against the principal’s interests, and a trust may be created or amended in a way that diverts assets from the beneficiaries the decedent intended.
Legal Grounds for Recovering Pre-Death Transfers
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Undue Influence
Undue influence is the overriding of a vulnerable person’s free will by someone in a position of trust or power, to obtain a benefit. The claimant generally must prove motive, opportunity and the actual exercise of influence. Courts look at the decedent’s physical and mental condition, the relationship between the decedent and the alleged influencer, whether the influencer was involved in procuring the transfer, and whether the transaction was unnatural or inconsistent with what the decedent had said before.
Where a confidential relationship exists, for example between a caregiver and an elderly person or between a fiduciary and a beneficiary, and the person in the position of trust receives a substantial benefit, New York courts may shift the burden and require the recipient to explain the transaction.
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Lack of Mental Capacity
To make a valid gift or transfer, the transferor must understand the nature of the transaction, the property involved, and the natural objects of his or her bounty. A person with Alzheimer’s disease, dementia, stroke-related cognitive decline, a terminal illness or the effects of powerful medication may lack the capacity to sign a deed, change a beneficiary or authorize a wire transfer. Medical records, physician testimony and witness accounts are usually the critical evidence.
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Fraud and Forgery
Some transfers involve outright fraud or forgery: a forged signature on a deed, a false notarization, or a misrepresentation about what the document being signed actually does. Forensic document examiners, handwriting experts and investigators help establish these claims, and the same conduct may carry criminal liability under the New York Penal Law.
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Breach of Fiduciary Duty and Power of Attorney Abuse
Article 5, Title 15 of the General Obligations Law governs powers of attorney and imposes strict fiduciary duties on agents. An agent who uses the power of attorney to transfer the principal’s assets to himself, to make gifts beyond the gifting authority granted in the power of attorney (or, for forms signed before June 13, 2021, in the statutory gifts rider), or otherwise to self-deal is liable to return those assets. Executors, trustees and other fiduciaries who facilitate improper transfers can be held accountable in the same way. We discuss these cases further at power of attorney abuse and inheritance.
Remedies Available Under New York Law
The Surrogate’s Court in each county has broad authority to unwind an improper pre-death transfer and return the asset to the estate. Which remedy fits depends on what was taken and who holds it now.
| Remedy | What it does |
|---|---|
| Turnover proceeding under SCPA 2103 | Lets the executor or administrator compel a third party to return estate property in that person’s hands. |
| Discovery proceeding under SCPA 2104 | Examines, under oath, a person believed to have information about missing or transferred assets. |
| Constructive trust | An equitable remedy that requires the wrongful recipient to hold the property for the benefit of its rightful owner. |
| Action to set aside a deed | Cancels a fraudulent or invalid conveyance of real property and restores title. |
| Accounting by the agent | Compels an agent under a power of attorney to disclose every transaction made with the principal’s money. |
| Money damages | Compensatory damages and, in egregious cases, punitive damages. |
| Attorneys’ fees | May be recoverable in certain cases involving power of attorney abuse. |
The Surrogate’s Court Process
Most of these cases are litigated in the Surrogate’s Court of the county where the decedent lived; New York City has one in each of its five boroughs. The case begins with a petition that identifies the assets at issue, the people who allegedly received or hold them, and the legal grounds for recovery. After the petition is filed and served, the respondent answers.
The court then oversees discovery, which can include document production, depositions, subpoenas to banks and financial institutions, and expert evaluations. Many cases settle once the financial and medical records are on the table. When they do not, the matter is tried before the Surrogate.
Statute of Limitations
Time matters in these cases, and the deadline depends on the legal theory being asserted.
| Claim | Time limit |
|---|---|
| Fraud | Six years from the fraud, or two years from its discovery, whichever is later. |
| Breach of fiduciary duty | Three years where money damages are sought; six years for equitable relief. |
| Recovery of real property | Generally ten years. |
| Constructive trust | Typically six years. |
Because when the clock starts is often itself disputed, the safe course is to consult an attorney as soon as an improper transfer is suspected.
Evidence Needed to Build the Case
Recovering a pre-death transfer is an evidence-gathering exercise. The medical records establish the decedent’s cognitive condition at the time of the transfer. Bank statements, cancelled checks and wire records show where the money went; deeds and title histories show what happened to the real estate. Prior wills, trusts and beneficiary designations show what the decedent intended before the change. Communications between the decedent and the alleged wrongdoer, and the testimony of family members, friends, physicians and caregivers, fill in the circumstances. Where needed, expert reports from medical professionals, forensic accountants and handwriting analysts complete the picture.
Who Has Standing to Bring a Claim?
Several different people may be able to challenge a pre-death transfer, depending on the circumstances.
| Who | When they can sue |
|---|---|
| Executor or administrator | Has the primary authority to recover estate assets on behalf of the estate. |
| Beneficiary under a will | Where the beneficiary would have inherited the transferred property. |
| Intestate heir (spouse, child, other distributee) | Where the decedent died without a will. |
| Trust beneficiary | Where the transfer diverted assets away from the trust. |
| Co-agent or successor agent under a power of attorney | May seek an accounting from a prior agent. |
How We Handle These Cases
Litigation over pre-death transfers is among the most emotionally charged work in New York estate practice. It pits family members against one another, involves significant assets, and requires careful investigation of financial records, medical history and family relationships. We have litigated these cases in the New York, Kings, Queens, Bronx and Richmond County Surrogate’s Courts since 2008, we work with a network of geriatric psychiatrists, forensic accountants and document examiners, and we aim for an efficient resolution where one is available and a trial where it is not.
Taking the Next Step
If you suspect that a loved one’s assets were improperly transferred before death, or if you have received property and are now being accused of taking it improperly, act promptly. Evidence disappears, memories fade, limitation periods run, and assets get spent or hidden. Call us at 212-233-1233 or email [email protected] for a confidential consultation about your options.
