DEBRA ZEGELSTEIN RICKY ZEGELSTEIN ELSA ZEGELSTEIN v. << (2026)

This is a proceeding instituted by Howard Zegelstein ("Howard"), decedent's son, seeking to compel an accounting of decedent's daughters, Debra Zegelstein ("Debra") and Ricky Zegelstein ("Ricky") as co-executors. The pertinent facts underlying the current controversy are as follows:

Decedent, Joseph Zegelstein ("Joseph"), died on July 14, 2008 survived by his spouse Elsa Zegelstein ("Elsa"), and his three above mentioned children. His last will and testament, which was admitted to probate in December 2008, nominated Elsa and Debra as co-executors. The will created two testamentary trusts which, in general terms, mandated income to be paid to Elsa during her lifetime, permitted discretionary distributions of principal to her during this time, and upon Elsa's death, the payment of any remaining principal to decedent's issue per stirpes. Elsa and Debra were also appointed co-trustees of both trusts.

Elsa subsequently died on February 24, 2019, leaving a last will and testament which was admitted to probate on November 19, 2019. Ricky was appointed executor of Elsa's estate. That estate is being administered in Nassau County.

While Joseph's distributive plan was not complex, the administration of his estate was, unfortunately, not seamless. In fact, years of litigation ensued between Debra and Elsa which included proceedings for discovery, accountings, and contempt. The root of the disconnect between the co-fiduciaries involved several valuable parcels of real estate that decedent and Elsa had owned and managed during their lifetimes. At various points over the years, each parcel had been titled, managed, and reported for tax purposes (both income and estate) in different manners. Disagreements concerning the fundamental question of what interest, if any, decedent's children may have in these properties, as well as what share of income they may be potentially entitled to are fueling the current imbroglio.

As stated above, Joseph's testamentary plan was straightforward. His will established two testamentary trusts to receive all assets of his estate. However, ascertaining what assets comprised his estate was convoluted. During his life, decedent and Elsa became 50% partners of J&E Realty Partnership, which apparently managed and operated four parcels of real estate on East 60th street in Manhattan.

The deeds for these parcels were initially titled in the names of Joseph and Elsa as tenants by the entirety. Obviously, real property titled and maintained in this fashion would pass by operation of law at death, would not constitute part of a decedent's testamentary estate, and thus would not be transferred pursuant to Joseph's will. Yet, Joseph and Elsa, their accountants, and their attorneys, whether due to inattention, misremembrance, or perhaps simply lofty tax avoidance aspirations, have categorized ownership of these assets differently in various official government filings over the years.

Obviously, given the terms of the attorney drafted and supervised will and trusts, and the nature and extent of his other assets, Joseph's understanding of the nature and composition of his estate apparently did not contemplate his real estate assets passing solely to Elsa by operation of law. Furthermore, Joseph's estate tax returns, signed by Elsa, and the J&E Partnership winding up accounting both list the parcels as partnership assets. Those documents also show the credit shelter and marital trusts as receiving several million dollars in assets. And while Joseph's 50% share of J&E Realty, described as the owner of four parcels of real estate, was valued in excess of $4.5 million, nothing was listed under the schedules for jointly owned property.

Finally, pursuant to a stipulation entered into between Debra and Elsa dated August 18, 2010, Elsa consented to file a judicial accounting in her capacity as the winding up partner of J&E Realty on notice to the co-executors of the estate. Schedule A of her accounting showed decedent owned a 50% interest in J&E valued in excess of $4.8 million. It further averred J&E had owned the four subject parcels of real property since 1972.

When Elsa died in 2019, Ricky was appointed fiduciary of her estate. Elsa's will provided that the assets in her estate should pass to the Elsa Zegelstein revocable living trust, which was created in 2011 and amended and restated in April 2014. Ricky was named as sole trustee of this trust. The terms of this trust provide that any residuary be poured over into two further sub trusts — one for the benefit of Ricky and one for the benefit of Howard. Debra was deemed, for the purposes of distribution, to have predeceased Elsa.

Elsa's estate tax return, filed in July 2020, shows a date of death valuation of Elsa's revocable trust in excess of $19 million, contained an acknowledgement that Joseph's testamentary trusts were never funded and might have to be, and listed two of the subject properties as being owned by Elsa's revocable trust at the time of her death. Public records show that in and around 2011 various deeds had been executed by Elsa and Ricky changing record ownership of several of these parcels.

Howard has now initiated this proceeding, and contends, given the above, that he is entitled to an accounting of Joseph's estate from Debra and from Ricky, as fiduciary of Elsa's estate. Ricky has moved to dismiss the petition.

Ricky first posits, pursuant to CPLR 3211(a)(5), that this proceeding is time-barred on the grounds that more than six years have elapsed since Elsa's fiduciary obligations were repudiated upon her death.

A proceeding to compel an accounting by a fiduciary is governed by a six year statute of limitations (see CPLR 213[1]). "The claim does not begin to accrue until there is either an open repudiation of the fiduciary's obligation or a judicial settlement of the fiduciary's account" (Matter of Meyer, 303 AD2d 682, 683 [2d Dept 2003] [citations omitted]; see Matter of Behr, 191 AD2d 431 [2d Dept 1993]). Where a fiduciary has died, the statute of limitations runs from the date of death (see Mater of Steinberg, 183 AD3d 1067 [3d Dept 2020]).

It is undisputed that Elsa died on February 24, 2019. Ricky avers that this proceeding, which was filed on August 19, 2025, is therefore time-barred as the time to compel an accounting would have expired on February 25, 2025.

The court notes, however, that such calculation failed to take into account the 228 days of tolling that began on March 20, 2020 and ended on November 3, 2020 due to COVID-19 Executive Orders (see 9 NYCRR 8.202.8, 8.202.67; Brash v Richards, 195 AD3d 582 [2d Dept 2024]).

Contrary to Ricky's contention, the filing of Joseph's estate tax return did not constitute the type of open repudiation required (see Matter of Eisdorfer, 188 AD3d 674 [2d Dept 2020]). In fact, far from being a repudiation, Joseph's estate tax return was a confirmation of Joseph's estate plan and did not signify Elsa's claim to ownership of its East 60th Street properties as jointly-held property. This is especially true given the confirmatory averments made by Elsa in her judicial accounting filed in 2010.

Based on the above facts, the court finds the statute of limitations did not expire prior to the commencement of this proceeding and does not bar Howard from instituting this proceeding.

Ricky next contends that the doctrine of laches requires that Howard be barred from compelling her to account for Elsa.

A fiduciary is not entitled to rely upon the laches of a beneficiary as a defense unless he or she additionally repudiated the relation to the knowledge of such beneficiary (see Matter of Barabash, 31 NY2d 76 [1972]).

As explained above, Ricky failed to establish that Elsa openly repudiated her fiduciary obligations to the trust beneficiaries. Thus, there was no delay (see Matter of Eisdorfer, 188 AD3d 674 [2d Dept 2020]). To the extent Ricky contends Howard's failure to make inquiry while Elsa was alive constitutes laches, such failure does not demonstrate the prejudice laches requires (see Matter of Rodken, 270 AD2d 784 [3d Dept 2000]).

Moreover, and fatally, laches is an equitable defense that is not available to a party with unclean hands (see Simmons v Bell, 220 AD3d 647 [2d Dept 2023]). Here, Ricky has personal knowledge regarding the various manners in which the properties were categorized in numerous official documents. More significantly, she was also an active participant in an attempted transfer of two of these parcels to herself outright, in contravention of Joseph's will and trusts. As such, Ricky actively participated and benefitted in the delay and obfuscation regarding the need for an accounting. Consequently, her reliance on equitable remedies is baseless.

Ricky's next argument is that compelling her to account for Elsa is not in the best interest of the estate because it would cause undue delay and inordinate expense for all involved. While touched by such concern for the beneficiaries, as well as the court's time, the fact remains that the two testamentary trusts created under Joseph's will remain unfunded and there has never been an accounting by the estate fiduciaries.

If the trusts had been funded and administered as written, Elsa 's needs should have been provided for and Howard, Ricky, and Debra would have received one-third of the trusts' remaining assets.

Instead, two of the properties were transferred by Elsa to Ricky outright. The other two parcels were transferred by Elsa into Elsa's revocable trust, of which Ricky serves as the sole trustee. Given Ricky's control, custody, and involvement in the transfer and administration of these assets, requiring Ricky to account is unquestionably in the best interests of Joseph's estate.

In fact, numerous questions remain unanswered regarding the administration of Joseph's estate including the assets comprising such estate, the true nature of J&E Realty, the funding of the testamentary trusts as well as the tax and ownership implications of the various filings made (see Matter of Cassini, 170 AD3d 775 [2d Dept 2019]). Contrary to Ricky's arguments, compelling Ricky to account is obviously in the best interests of Joseph's estate so the court can determine, once and for all, the extent of Joseph's testamentary estate and ascertain how it has been administered.

Lastly, Ricky contends that the applicable statutes of limitation have run under various cognizable theories available to challenge the conveyances of the East 60th Street properties. This argument is clearly premature. Whether any objections will be filed, much less be successful, will ultimately depend on the information set forth in the petition and information revealed after discovery.

Accordingly, the motion is denied, and Ricky shall file an answer to the proceeding within 10 days of service upon her of a copy of this decision and order by petitioner.

Alternatively, Ricky can file an affirmation consenting to the entry of an order directing the filing of an accounting and service of citation of same within 90 days from the date of service upon her of this decision and order.

This constitutes the decision and order of the court.

The Clerk of the Court is directed to forward a copy of this Decision to all parties who have appeared in this proceeding.

Dated: _________, 2026

Hon. Peter J. Kelly, Acting Surrogate

Peter J. Kelly, S.