Surrogate Kristin Booth Glen
In a contested estate accounting action, the remaining issue was whether post-death expenses relating to income-producing property were deductible when calculating the “net estate” when determining the spousal elective share. Decedent owned a condo apartment that was under lease at the time of his death. Decedent’s executor entered into a new lease thereafter, and subsequently sold the unit after the second lease expired. The court noted $100,000 of rental income was earned after decedent’s death, and expenses for the unit chargeable to income were $217,035. Executor argued the carrying charges should be deducted as administrative expenses when computing the net estate for purposes of the elective share. The spouse disagreed, arguing it would be inequitable to diminish her share by expenses incurred to produce income she would not receive. The court agreed, finding the executor did not establish the carrying charges incurred after expiration of the first least were necessary for the proper administration of the estate. It found the expenses allocable to the term of the second lease were not “reasonable and proper,” thus were not deductible as administration expenses.