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After Half a Century, Surviving Same-Sex Partner Tries to Inherit His Partner’s Estate

Posted on: October 25th, 2016 by Art Leonard No Comments

It seems that anything that could go wrong did go wrong – legally speaking, that is – when William Cornwell died on June 19, 2014, believing he had made a will leaving his entire estate to Thomas Doyle, the man with whom he had shared his life for more than half a century. Cornwell had not involved a lawyer in preparing and signing the will, apparently, because no lawyer would have made the simple mistake he made: getting only one person to witness the will.  After Cornwell died, Doyle turned to Sheila McNichols, Cornwell’s niece and a longtime friend to the two men, “for comfort, support and advice,” said Doyle in a sworn petition filed this month in the New York County Surrogate’s Court.  He showed her the will, and she suggested taking it to her lawyer, Peter Gray, to handle probate.

 

Gray immediately saw the problem. The New York courts will not accept a will unless there are at least two sworn witnesses to the signing.  Indeed, the will form that Cornwell used had spaces indicated for two witness signatures, but one was blank.  The instruction sheet that came with the will form did not specifically say that two witnesses were required, although the instructions referred to witnesses in the plural several times.  Gray advised Doyle that the will could not be accepted for probate, and because the men had never married, Doyle had no rights as a surviving unmarried partner.  The estate would go to Cornwell’s intestate heirs, two nephews and two nieces, all living in California, three of whom had virtually no relationship with Cornwell or Doyle.

 

This was a big blow to Doyle, now 85, because his living arrangements depended crucially on the rental income from the other apartments in the West Village brownstone on Horatio Street where he and Cornwell had lived together since 1961, and his ability to continue occupying the ground floor apartment without paying rent. Although they had moved in as tenants after living together elsewhere beginning in 1958, in 1979 the owner decided to sell the building and Cornwell, who had greater resources to finance the purchase, bought it, setting up a corporate entity to own and operate it, and putting Doyle on the board. That building and the rental income it generates is the estate’s main asset.  Cornwell and Doyle had lived on their social security checks and the rental income.  Now Doyle was reduced to his individual monthly social security check (smaller than Cornwell’s, because Cornwell had the good paying job while Doyle was a freelancer with sporadic income), having no pension or other resources.

 

Although the men lived together and considered themselves spouses, they had never taken any step to formalize their relationship. In the time they lived together, New York City had passed a domestic partnership ordinance in the 1990s, then in this century surrounding states and finally New York State in 2011 had changed their laws to allow same-sex couples to marry, but these men never registered their partnership or formally married.  Doyle says they were planning to marry, and had even purchased rings in anticipation of a ceremony, but in the end it seemed too much of an effort, as Cornwell was in poor health for some time prior to his death. The only legal documents of their relationship are health care proxy forms the men had made in 2002 (properly witnessed by two people, by the way), and joint bank account statements.

 

According to Doyle, McNichols told him that she felt this situation wasn’t right, Doyle should not be shut out after more than 50 years. She retained Gray to draft an agreement by which the heirs would renounce their interest in the estate in favor of Doyle, and provide that the ownership of the building would go to Doyle as well.  At the same time, Doyle would execute a will leaving everything to McNichols.  This plan seems to have proceeded at first, since Doyle’s attorney attached to the petition a copy of McNichols’ signed agreement to renounce her inheritance, as well as an affidavit she signed for filing in the probate court. Doyle swears that he trusted and relied on McNichols to help him with decisions, named her as his power of attorney and made her joint owner of his bank account.  He depended on her to convince the other relatives to fall in with this plan.

 

But the other heirs were not willing to go along with it. Doyle claims that the two nephews had never even met Cornwell, and the other niece only met him fleetingly as a child, and none of them knew Doyle. Evidently the allure of a monetary windfall from a “rich uncle” was too powerful. Suddenly, Doyle was confronted with the contention that the papers McNichols signed were not valid, merely “samples,” that McNichols and one of the nephews had been appointed by the Surrogate to administer the estate, to sell the brownstone, and to split up the proceeds among the heirs.  Indeed, according to a New York Times article published on October 23, the building is now in contract for about $7 million.  The Times also reports (although Doyle does not mention it in his petition), that the nieces and nephews offered to let Doyle continue living in the building by including a clause in the sales contract under which he can stay for up to five years at a nominal rent of $10 a month, and that he would receive $250,000 from the proceeds of the sale, but Doyle, stiffened by the heirs’ resistance, decided to sue for the full inheritance he claims Cornwell intended to leave him.

 

Although he didn’t have a retainer agreement with Gray, Doyle says he regarded Gray as his attorney and trusted him to advise on how to protected his legal rights, but Gray never suggested any legal strategy to advance Doyle’s claim. Doyle says that some friends suggested he get another legal opinion, so he spoke with Polly Eustis, who confirmed Gray’s opinion that Doyle had no standing to inherit Cornwell’s estate.  Eventually, however, he found Arthur Schwartz and Jamie Wolf, his current attorneys, who have devised a new strategy on his behalf.

 

It seems that Doyle and Cornwell had gone to Pennsylvania in 1991 to purchase a show dog together, and Doyle has the American Kennel Club registration certificate with the date of the sale, listing the two men as the owners. He also claims that they had a good friend in New Hope whom they visited several times on vacations.  The significance of this is that under Pennsylvania law until January 2005, cohabiting individuals who spent time together in that state could be considered to have a common law marriage, and New York courts have recognized Pennsylvania common law marriages in determining whether an individual who was not formally married to a partner is to be considered a surviving spouse.  Doyle’s lawyers have constructed an intricate argument based on New York and Pennsylvania cases seeking to persuade the Surrogate’s Court that Doyle should be recognized as Cornwell’s sole heir, the surviving spouse of a man who had no children, and thus should inherit the entire estate.  Their argument crucially depends on a court retroactively applying last year’s Supreme Court Obergefell marriage decision more than a decade into the past in order to find that two men spending time living together in Pennsylvania prior to 2005 had a common law marriage that New York will recognize.  The will that Cornwell signed may not be admissible for probate, but it would be admissible as evidence to support Doyle’s claim that the two men considered themselves to be married and that Cornwell planned to leave everything to Doyle.

 

This is a difficult argument to make in retrospect, so Schwartz and Wolf face an uphill battle in the Surrogate’s Court. Doyle’s petition is vague on some of the kinds of facts that would be helpful to his case, such as exactly when and for how long he and Cornwell stayed in New Hope on their vacation trips.  All the affidavits submitted with the Petition to bolster his case come from Doyle’s relatives and neighbors in New York.  There are no affidavits from anybody in Pennsylvania to corroborate Doyle’s recollections about those trips.  The affidavit by Sheila McNichols, signed two years ago, refers to the men as lifetime partners and domestic partners, but not as spouses.    This isn’t surprising, since it was prepared under Gray’s supervision, before Doyle met his current lawyers, who first suggested the common law marriage theory after interviewing Doyle about the details of his relationship with Cornwell and their lives together.  New York court decisions have accepted common law marriage arguments based solely on the testimony of the alleged surviving spouse, but the cases have usually mentioned more details that a court would likely rely upon to support marital intent, such as the couple having had a religious ceremony or exchanged rings before a gathering of friends.

 

Doyle’s lawyers will also have to convince the court to waive various deadlines that were missed while Doyle was letting McNichols and Gray take the lead in handling the estate affairs. Doyle’s claim should have been filed shortly after Cornwell’s death, not more than two years later, but he argues in his petition that he only recently learned from his current attorney about his legal right as a common law surviving spouse.  In a written argument accompanying the petition, Schwartz and Wolf contend that Doyle had reasonably relied on Gray and McNichols’ assurances that he would be taken care of, and he “did not think that he needed to pursue any sort of litigation to inherit from this estate.”

 

There are plenty of cautionary tales here for couples in similar situations. If significant property is involved in a relationship, getting a competent lawyer to prepare and supervise the execution of legal documents (including wills) is essential.  Whether to marry is a decision that couples need to weigh carefully, but the benefits in terms of inheritance rights are substantial, especially taking into account the spousal deduction if an inheritance will be large enough to generate federal or state tax liability.  Even at the mundane level, surviving spouses may get a death benefit from social security or from the decedent’s employer’s benefits plan, and monthly social security payments at the higher rate enjoyed by their deceased spouse.  These men first got together when these things weren’t spoken about, and the idea of same-sex marriage seemed a pipe dream in 1958!  Unfortunately for Doyle, they failed to keep up with the times.

 

The case is pending before New York County Surrogate Nora Anderson, who signed the document appointing the co-administrators and authorized the sale of the building.

 

Same-Sex Couples: Avoid Intestacy and Avoid Litigation!

Posted on: August 18th, 2013 by Art Leonard No Comments

An August 8 decision by the Superior Court of Pennsylvania (an intermediate appellate court) shows why same-sex couples, especially in states that do not provide any legal status for same-sex couples, should take the trouble to make wills and other legal documents to deal with contingencies, pending the time that same-sex marriage becomes available in the state.  Although the court’s ruling in In re Estate of Richard A. Devoe, 2013 Pa. Super. LEXIS 2129, may eventually turn out well for his surviving former domestic partner, James B. Mooney, some prudent advanced planning could have avoided some of the mess that resulted when Devoe unexpectedly died intestate in his 40s as the result of an accident at home, survived (in addition to Mooney) by his parents and two siblings.

Under Pennsylvania law, when an unmarried person without children dies without a will but is survived by his parents, the property (real estate, goods, money) that he owns at his death goes to his parents.  (When a marriage person without children but with surviving parents dies, the surviving spouse automatically gets $30,000.00 plus half of the remaining balance of the estate, the other half going to the parents.) When a person dies without a will, the court will appoint somebody to administer the estate, and preference will normally be given to surviving relatives, such as siblings or parents.  And a surviving unmarried same-sex partner will be pretty much left out in the cold to fend for himself.  Things can get complicated, as they did in this case.

The opinion for the court by Judge Shogan is a bit terse in relating the facts.  Shogan describes Mooney and Devoe as “at one time, domestic partners,” but does not make clear whether their partnership had ended prior to Devoe’s death.   Perhaps they had registered as domestic partners with the city of Harrisburg.  They bought a resident there in 1998 as “joint tenants with the right of survivorship,” a status that means if one of them dies, the other automatically becomes the sole owner of the property.  Both of their names would be on the deed of purchase.  The opinion does not mention whether they bought this property with cash, and does not mention them having jointly taken any kind of loan to finance their purchase.  The opinion also doesn’t mention whether, when Devoe later took out a mortgage loan against the property in 2008, the men were still domestic partners.  One suspects they were not, but the opinion doesn’t specify.  At any rate, Devoe took out this loan in order to purchase some commercial property, which he leased to a company, Monard Testing, LLC, of which he was a 5o% owner.  (So, in effect, he borrowed against his home in order to finance his business.)  Mooney had no interest in the business.  Until his death, Devoe continued to make the payments on this loan.

In October 2009, Devoe, then age 43, died when he fell down the stairs at home, without having made a will.  Upon Devoe’s death, Mooney became the owner of the residence, which was encumbered by the balance due on the mortgage Devoe had taken out the previous year.  given how mortgages work, less than a year of payments would mean that the principal due at that point was close to the full amount of the loan, since a large share of monthly payments in the early years of a mortgage goes to interest. 

In January 2010, the court appointed Devoe’s brother and sister to be co-administrators of his estate.  Mooney asked them to have the estate pay off the outstanding loan against the house.  (Recall that upon Devoe’s death, Mooney became sole owner of the house, so it was not part of the estate.)  The administrators declined, stating that the estate did not have the cash to do so, and would not have any cash until they could sell off some of the assets held by the estate, which included the commercial property (whose purchase, recall, was financed by the mortgage against the residence), Devoe’s ownership share in the business, and some personal property (like his BMW).  Although the estate contacted the bank about the mortgage loan and said they intended to pay it, they asked the bank to hold off on any foreclosure while the estate got together the necessary funds, but they never did pay it, having evidently figured out that because the estate no longer owned the property, they didn’t have to pay it, and the bank filed a foreclosure action.

In February 2010, Mooney filed a Notice of Claim with the Estate for the principal amount of the loan that was due, but no money was forthcoming.  Mooney then sold the house in September 2010, using the proceeds to pay off the bank loan and put a stop to the foreclosure proceeding.  The next month, the Estate sold the commercial property privately to one of Devoe’s friends for less than he had paid for it, and later sold Devoe’s interest in the business to his business partner for a pittance.  The Estate did not sell any of Devoe’s personal property (including the BMW), purportedly for “sentimental” reasons.  When the Estate filed its petition for a final settlement, Mooney filed objections, seeking to be repaid the $132,400.00 that he had to cough up to clear the title to the residence before he could sell it.  (He sold it for about $136,000.00.)

The trial court denied Mooney’s petition for payment, finding that since he was not personally obligated on the loan, he had paid it off as a “volunteer,” and was thus not entitled to reimbursement.  The Superior Court reversed. 

“Upon careful review of the record,” wrote Judge Shogan, “we are compelled to disagree with the conclusion reached by the trial court in its refusal to apply the doctrine of equitable subrogation.  Rather, we are constrained to conclude that the trial court erred in finding that Mooney could not be equitably subrogated as a surety who provided financing for a defaulting debtor, Decedent and the Estate.”  In this case, “it is undispute that the Estate defaulted on the HSBC Loan, issued solely to Decedent, and HSBC initiated foreclosure proceedings on the Residence, which was owned by Mooney.  Mooney testified that he was compelled to sell the Residence in order to stop the foreclosure proceedings on the Residence, protect his own personal credit, and satisfy the HSBC Loan. . .  Thus, due to the Estate’s refusal to pay the HSBC Loan, Mooney had a legal duty to compensate HSBC with proceeds from the sale of the Residence, by virtue of the mortgage granted upon the Residence.  It makes no difference that Mooney’s legal duty was triggered following the default by Decedent and the Estate.  The law will not penalize a surety for good faith conduct that resulted in a party being completely and promptly paid.  Further, allowing subrogation will not cause injustice to the rights of others.  Accordingly, we conclude that the trial court abused its discretion in reaching a contrary conclusion with regard to this issue.”  Having decided on this theory, the court said there was no need to address Mooney’s alternative theories for recovery, including that the Estate (and, ultimately, Devoe’s parents) would be unjustly enriched if not required to compensate Mooney for paying off the mortgage loan against the property.  (They would be unjustly riched because they enjoyed the proceeds from sale of the commercial property, which Devoe had bought using the money from the loan he took out against the residence.)

The ambiguous wording of facts by the court makes it difficult to unravel this story, which reads quite differently depending upon whether Mooney and Devoe were still domestic partners at the time of Devoe’s death, or whether they had separated, with Mooney moving out.  If the men were no longer domestic partners when Devoe applied for the mortgage loan against the house, one has to question why HSBC was willing to make the loan without insisting on including Mooney as a debtor, since both men’s names presumably appeared on the original deed of sale of the residence to them?  Shouldn’t Mooney’s permission have been required, inasmuch as he would become owner of the property in case Devoe died, and the property was being encumbered by the loan.  If Devoe had made a will, instructing his executor to pay off the loan upon his death notwithstanding that ownership of the residence would not be part of his estate, the problem in this case would not have occurred; the executor would have sold the commercial property and used the proceeds to pay off the mortgage on the residence (and Moooney’s sale of the property shows that it could be sold for more than the remaining principal balance of the loan). 

If Pennsylvania recognized same-sex common law marriages, or had a marriage equality or civil union law in place under which Devoe and Mooney could have become legal spouses, this would likely have played out differently, even had Devoe died intestate.  But the lack of such a legal framework makes it all the more important for same-sex couples to make wills, financial powers of attorney, and other documents against the possibility of unforeseen accidental death.

Things are moving along in the quest for marriage equality in Pennsylvania.  The ACLU has filed a lawsuit, premised on the reasoning of U.S. v. Windsor, to challenge the existing legal ban on same-sex marriage.  Presumably, a Pennsylvania court could, even in the absence of this lawsuit, rule in another case that a cohabiting same-sex couple should be considered to have a common law marriage, using fedearl equal protection doctrine to overturn earlier Pennsylvania precedents to the contrary.  One county clerk (in Montgomery County) and one mayor (in Allegheny County) have engaged in civil disobedience on this issue, performing marriages for same-sex couples, and a lawsuit by the state government is on file seeking injunctive relief against them.  Things are definitely coming to a boil in Pennsylvania.  The court’s ruling in Estate of Devoe is just one more piece of evidence that the state’s failure to adjust its legal framework to take account of same-sex couples and their business dealings is an example of governmental negligence.  Time to update the law to cope with the reality of modern family life in PA.