Matter of S.M.M.Z.
Annotate this CaseDecided on April 29, 2010
Sur Ct, Bronx County
In the Matter of the Guardianships of S.M.M.Z., A.M.Z.Z. and S.M.N.Z., Infants
2009-363
Rosenbaum & Rosenbaum, PC, (Andrew B. Roth, Esq., of counsel) for petitioner, mother of the infants.
William A. Bottiglieri, Esq., Guardian ad Litem for infants.
Lee L. Holzman, J.
This is an application by the mother and guardian of the property of three infant children for leave to use the infants' funds to purchase realty located in the Town of Mamaroneck, Westchester County (the property). The petitioner's desire to purchase a home in this location is understandable as she is the sole shareholder of a restaurant located in Mamaroneck. Each infant received approximately $64,000 from a court-approved sale of Bronx realty in which each infant and the petitioner had a one-fourth interest (see Matter of S.M.M.Z, A.M.Z.Z. and S.M.N.Z., NYLJ, June 19, 2009, at 32, col 4). To acquire the property, the petitioner proposes to obtain a purchase money mortgage in the amount of $375,000, and pay the balance of $245,000 from funds belonging to the infants and the petitioner, thereby entirely liquidating the infants' accounts. The petitioner thereafter would have to pay all future charges necessary to carry and maintain the property herself.
To verify that the petitioner was capable of making the payments required to maintain and carry the home, the guardian ad litem appointed for the infants (GAL) requested that she verify her income and he spoke to her accountant. After a discussion with the accountant, the GAL learned that the petitioner received a relatively small salary from the corporation which showed small profits. As a result, the GAL voiced concern about the petitioner's ability to carry the property, given her reported income and the minimum monthly expenses of $3,515 for mortgage, insurance and real estate tax payments. In response to these concerns, the petitioner indicated that her father would provide financial assistance, if necessary, and further, she currently has approximately $86,000 in savings which would act as a reserve fund to make payments. The GAL recommended approval of the application with the following conditions: (1) the petitioner be permitted to withdraw all but $15,000 from each child's fund and be required to pay an additional $45,000 from her own funds; (2) the Guardian Clerk and the GAL are to be notified in [*2]the event that the petitioner is late in making the payments for the mortgage, real estate taxes and insurance; and, (3) the petitioner and each child are to hold title to the property as tenants in common.
The surrogate's court is vested with broad authority in controlling the affairs of an infant, and such affairs will be closely supervised by the court on behalf of its ward (see 4-48 Warren's Heaton, Surrogate's Court Practice § 48.08 [1] [2010]; Matter of Title Guar. & Trust Co., 242 App Div 80 [1934], affd 271 NY 537 [1936]). In making its determination the court is motivated by what is in the best interests of the infant (Latterman v Guardian Life Ins. Co., 280 NY 102 [1939]). Requests for substantial withdrawals from infant's funds are closely scrutinized by the court as a guardian of an infant is obligated to preserve, protect and manage an infant's property (SCPA 1723) and "shall not make or suffer any waste, sale or destruction of such property" (Domestic Relations Law § 83).
The court cannot ignore the numerous, painful foreclosure proceedings that are occurring presently on a daily basis. Recently, the court indicated that any applications seeking to utilize an infant's funds to purchase realty in which the infant and other family members will reside will be denied unless it is established by clear and compelling proof that: (1) there is a minimal risk that the infant's investment will be lost; (2) the infant's funds will not be needed in the future to pay for expenses relating to the realty; and, (3) even if a portion of the infant's funds are lost, there remain sufficient funds to meet the infant's needs during minority (see Matter of B.M.B., NYLJ, Mar. 24, 2010, at 34, col 3).
As indicated by the GAL, there is a genuine concern that the petitioner will not be able to carry the property based upon her demonstrated income. This raises the possibility that the petitioner will default in her obligations. Should that occur, the infants' funds might be squandered, leaving them without any assets for their future support. It appears that the conditions suggested by the GAL would serve only to forewarn the court and the GAL of pending economic disaster, but in such event, it might be too late to take any action to improve the situation. Although the court has no reason to doubt that the infants' grandfather will be as generous as possible in preserving their home, their funds cannot be put at risk based upon an unenforceable promise to make a gift in the future. Consequently, the petitioner failed to establish that the purchase of the property utilizing the infants' funds is in the best interests of the infants.
Accordingly, this decision constitutes the order of the court denying the petition and directing the petitioner's attorney to pay, from the amount he holds in escrow, the sum of $1,403 to the GAL for legal services and disbursements. The Chief Clerk shall mail a copy of this decision and order to counsel for the petitioner and the GAL.
SURROGATE
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