ACTIONS BY CREDITORS AND OTHER PERSONS AGAINST DISTRIBUTEES AND TESTAMENTARY BENEFICIARIES
PART 1. LIABILITY OF DISTRIBUTEES AND TESTAMENTARY BENEFICIARIES AND ACTION THEREON
Section 12-1.1 Liability of distributees and testamentary beneficiaries. 12-1.2 Order of liability; preferences. 12-1.3 Extent of liability; judgment debtor`s right to indemnity and contribution.
PART 2. RULES GOVERNING ACTION TO ENFORCE LIABILITY
Section 12-2.1 Action not impaired by failure of creditor or other person to present claim to representative as prescribed by law. 12-2.2 Action may be a joint or several; right to implead. 12-2.3 Effect of application to surrogate to sell real property. 12-2.4 Effect of judgment. 12-2.5 Title of bona fide purchaser from distributee or testamentary beneficiary protected.
PART 1. LIABILITY OF DISTRIBUTEES AND TESTAMENTARY BENEFICIARIES AND ACTION THEREON S 12-1.1 Liability of distributees and testamentary beneficiaries (a) Subject to the other provisions of this article, distributees and testamentary beneficiaries are liable, in an action, to the extent of the value of any property received by them as such, for the debts and reasonable funeral expenses of a decedent, the expenses of administering his estate and all taxes for which the estate is liable, which have not previously been recovered from the personal representative or from any other source described in paragraph (b). (b) No liability may be imposed upon such distributees or testamentary beneficiaries, under paragraph (a), unless plaintiff establishes satisfactorily to the court that he cannot fully satisfy his claim: (1) Because there is insufficient property of the estate available for such purpose in the hands of the personal representative; (2) By action against persons prior in liability to the defendant, under paragraph (a) of 12-1.2, because such persons are not amenable to suit in this state, are insolvent or for any other reason cannot be made to answer for their liabilities; or (3) By the enforcement, under 3-3.6, of any lien, security interest or other charge he holds against property of the decedent specifically disposed of by will or passing to a distributee, or against the proceeds of any policy of insurance on the life of the decedent payable to a named beneficiary. S 12-1.2 Order of liability; preferences (a) Distributees and testamentary beneficiaries are liable, as provided in 12-1.1, in the following order: (1) Distributees. (2) Residuary beneficiaries. (3) General beneficiaries. Demonstrative beneficiaries shall be treated as general beneficiaries, to the extent that the property or fund charged with a demonstrative disposition has adeemed. (4) Specific beneficiaries. Demonstrative beneficiaries shall be treated as specific beneficiaries if the property or fund charged with any demonstrative disposition has not adeemed, to the extent of the value of such property or fund. (5) A surviving spouse to whom a disposition has been made which qualifies for the estate tax marital deduction. (b) The order of liability provided in paragraph (a) shall not apply to the liability for an estate or other death tax, under the law of this state or of any other jurisdiction, with respect to any property required to be included in the gross tax estate of a decedent under the provisions of any such law. The apportionment of such estate or other death tax, and the liability, under 12-1.1, of distributees and testamentary beneficiaries consequent to such apportionment are governed by the provisions of 2-1.8. (c) The express or implied intention of the testator to prefer certain beneficiaries shall be effective to vary the order of liability prescribed by paragraph (a). (d) If, in an action under this article, it is established to the satisfaction of the court that: (1) The defendant is liable for the payment of two or more claims, preference in the payment of such claims must be given in the order prescribed by law for payment of the debts of the decedent and the obligations of his estate. (2) An unsatisfied claim exists which is legally preferred to that of the plaintiff, the existence of such unsatisfied claim is a defense to the action if the aggregate value of the decedent`s property passing to defendant and other persons in his order of liability does not exceed the amount of such unsatisfied claim; if in excess of the amount of such unsatisfied claim, the plaintiff may recover such ratable share of the excess as the amount of his claim bears to the claims of all persons in the same order of preference as his.
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Introduction to Wills
Introduction to Trusts
Rights of surviving
family members
S 12-1.3 Extent of liability; judgment debtor`s right to indemnity and contribution (a) Although subject, under paragraph (a) of 12-1.1, to a judgment in the full amount of the value of any property received by him, which may exceed his ratable obligation as described herein, the maximum liability to which a distributee or testamentary beneficiary is subject under this article is his ratable obligation, in the proportion that the value of the decedent`s property passing to him bears to the value of all such property passing to distributees or beneficiaries, as the case may be, within the same order of liability as his under paragraph (a) of 12-1.2. (b) Any person against whom a judgment is obtained under this article, upon payment thereof, is entitled: (1) To be indemnified by any person prior to liability to him under paragraph (a) of 12-1.2, who remains liable under this article but against whom recovery was not available for a reason set forth in subparagraph (b) (2) of 12-1.1. (2) To contribution, for any sum paid in excess of his ratable obligation as described in paragraph (a), from any person within the same order of liability as his under paragraph (a) of 12-1.2, but only to the extent that such person`s ratable obligation is unpaid.
PART 2. RULES GOVERNING ACTION TO ENFORCE LIABILITY S 12-2.1 Action not impaired by failure of creditor or other person to present claim to representative as prescribed by law The failure of the plaintiff to present his claim to the personal representative as prescribed by law shall not impair his right to maintain an action against distributees or testamentary beneficiaries under this article; but nothing contained herein shall extend the time limited for the commencement of an action to enforce plaintiff`s claim. S 12-2.2 Action may be joint or several; right to implead An action may be brought against one or more of the persons subject to liability under this article. A person against whom an action is brought may implead, pursuant to the provisions of CPLR article 10 governing impleader, any person who may be liable to him for indemnity or contribution under paragraph (b) of 12-1.3. S 12-2.3 Effect of application to surrogate to sell real property If, during the pendency of an action to enforce a liability created by this article against a distributee or devisee of real property, a proceeding is pending or is subsequently commenced for the judicial settlement of the account of the personal representative, the action insofar as it affects any real property of the decedent shall be stayed until the accounting proceeding is concluded without an application for an order, under SCPA article 19, to dispose of real property of the decedent for the payment of debts, funeral or administration expenses having been made or, if made, without such an order having been granted. If such an order is granted, the action shall be dismissed as to the real property ordered to be disposed of and the plaintiff remitted to the enforcement of his rights against the proceeds of the real property held by the personal representative. Nothing contained herein precludes a person from asserting any right he may have under this article with respect to any other property of the decedent. S 12-2.4 Effect of judgment A judgment recovered in an action brought under this article is preferred, as a lien on any property of the decedent passing to a defendant against whom the judgment was recovered, to a judgment obtained against such defendant on his personal obligation. S 12-2.5 Title of bona fide purchaser from distributee or testamentary beneficiary protected The entry and filing of a judgment recovered against a distributee or testamentary beneficiary in an action brought under this article does not affect the rights of a prior purchaser, in good faith and for valuable consideration, from such distributee or beneficiary of any property of the decedent which would otherwise be subject to such judgment, unless, in the case of real property, a notice of pendency had been filed prior to such purchase. When the subsequent purchaser is protected, the judgment is enforceable against the judgment debtor to the extent of the net proceeds received by him upon the disposition of the property.