Attorney Ordered to Return $256,000 To Estate Administrator

I recently represented the Administrator of a Kings County estate in litigation against his former attorney. The attorney had represented the Administrator in the sale of estate real property and deposited the proceeds in his attorney escrow account. Instead of paying the proceeds from the sale over to the estate, he kept the money in his escrow account and proceeded to write checks to himself totaling over $197,000.

The attorney was uncooperative during the discovery process and failed to appear at court ordered conferences. After a hearing, we were able to establish that the attorney misappropriated over $256,000 – more than $197,000 in checks plus nearly $59,000 in funds unaccounted for. In her decision dated January 23, 2014, Surrogate Margarita Lopez-Torres directed the attorney to return the money to the Administrator of the estate with interest.

Moral of this story:  It is important for the Executor or Administrator of an estate to maintain an account under his or her control.  All estate funds should be deposited in the estate account as soon as possible.  Allowing the funds to be controlled by someone else, even the attorney, is a mistake and may expose the fiduciary to liability if the funds are misappropriated.

Matter of Jenkins, 2004-4481A,(Surrogate’s Court, Kings County, Decided January 23, 2014)

 

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