2006 New York Code - Contingent Or Unliquidated Claims; Retention Of Assets For Estate Taxes

 
  § 1804. Contingent  or  unliquidated  claims;  retention  of  assets for
            estate taxes
    1. Whenever at the death of any person there shall be a contingent  or
  unliquidated claim against the decedent's estate or an outstanding bond,
  recognizance  or  undertaking  upon  which  the  decedent was principal,
  surety, or indemnitor and on which at the time of the  decedent's  death
  the  liability  is  still  contingent  or  unliquidated, a claimant or a
  surety shall have the right to file  with  the  fiduciary  an  affidavit
  showing the facts upon which the contingent or unliquidated liability is
  based   and   the  probable  amount  thereof,  and  there  shall  be  no
  distribution without reservation of such estate assets as the court,  by
  a special proceeding or upon the final accounting, shall determine to be
  adequate  to  pay  the  contingent or unliquidated claim when the amount
  thereof shall become due  and  payable.  In  fixing  the  amount  to  be
  reserved  for  payment of the claim the court may determine the value of
  any security or collateral to which the creditor may resort for  payment
  of  the  debt  and may thereafter direct the reservation if necessary of
  sufficient estate assets to make up the difference between the value  of
  such  security  or  collateral  and  the  amount  necessary  to  pay the
  contingent or unliquidated claim.
    2. If before a final judicial accounting and decree the contingent  or
  unliquidated  claim or liability shall have become fixed and liquidated,
  then evidence thereof shall be filed with the  fiduciary  in  accordance
  with  the  provisions of 1803.   If the contingent or unliquidated claim
  has not become so fixed and liquidated the decree on a final  accounting
  shall  direct  that  the assets found sufficient to satisfy the claim or
  the proportion to which it is entitled be retained in the hands  of  the
  accounting party for such period or periods as the court may deem proper
  for  the purpose of being applied to the payment of the claim when fixed
  and liquidated and that so much of the assets as are not needed for that
  purpose be afterwards distributed according to law.
    3. Where the state estate tax is or may be due and the amount  thereof
  has  not  been  finally  determined or such tax cannot for any reason be
  paid at the time of final judicial accounting and  decree  thereon,  the
  decree  on  a final accounting shall direct that assets found sufficient
  to satisfy the tax or possible tax be  retained  in  the  hands  of  the
  accounting  party  for  such period as the court may deem proper for the
  purpose of being applied to the payment of the tax. In  that  event  the
  commissioner  of  taxation  and finance shall be among those served upon
  the final accounting. Such portion of the assets as are not  needed  for
  that purpose shall be distributed according to law.