In re Hausman

858 N.Y.S.2d 330 (2008)

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In re Hausman

New York Supreme Court, Appellate Division
858 N.Y.S.2d 330 (2008)

Facts

In October 2000, Lena Hausman executed a will that divided her residuary estate between her son, George, her daughter, Susan, and seven grandchildren. At the time she executed the will, Lena owned real property located at 1373 56th Street in Brooklyn, New York. In October 2001, George executed articles of organization to form 1373 Realty Co. LLC (the LLC) for the purpose of owning, operating, and managing the real property. George and Susan also signed an operating agreement providing that they were the LLC’s sole members. On November 2, 2001, Lena executed a deed transferring the real property to the LLC. However, the LLC’s articles of organization had not yet been filed with the New York Department of State at the time Lena transferred the property, and no attempt was made to file the articles of organization until November 16, 2001. After Lena died, George, Susan, and the grandchildren disputed whether the deed conveying the property to the LLC was valid given that the deed predated the LLC’s legal formation. George asked the New York Surrogate Court to determine whether the deed and property transfer were valid. The court determined that the LLC was a de facto entity when conveyance was made and thus concluded that the deed was valid. The grandchildren appealed.

Rule of Law

Issue

Holding and Reasoning (Mastro, J.)

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