The Gottlieb Estate: When Dying without an Estate Plan Impacts Real Estate

New Yorkers are fond of telling real estate stories.  It's our urban past time.  But when they include a cast of characters seemingly ripped from the pages of a Dickens novel and some properties made extremely valuable as a result of gentrification, the mix is irresistible.  Add an estate controversy, and the story becomes even more compelling.

Labeled a "tightwad" by the New York Times, William Gottlieb learned about real estate from Harry Helmsley when he worked for him as a leasing representative.  Gottlieb observed how Helmsley made money by buying buildings and then cutting their operating costs.  When New York began experiencing tough economic times in the 1960,  Gottlieb went on a buying spree, purchasing foreclosed properties in what would become some of New York's trendiest neighborhoods.  Though he suffered from poor eyesight, William Gottlieb was blessed with great real estate foresight.

In 1972, Gottlieb had executed a Will leaving his entire estate to his sister Mollie, who had done clerical work in his office for years.  Together with their brother Arnold, she was named co-administrator of William's estate.  Mollie had two children:  Neil Bender and Cheryl Dier.  Dier had one son, Michael Corbett, from a previous marriage.  Michael Corbett had been raised by his grandparents.

In 1985 Mollie executed a Will that left everything to her husband and her son Neil, and expressly disinherited her daughter Cheryl.  After falling and breaking her hip in 2007, Mollie appointed her son Neil as administrator of the Gottlieb estate. She passed away a week later.

Thereupon Dier and Corbett filed suit against Neil Bender in Surrogate's Court claiming Neil's incompetence as executor, citing over 500 violations against Gottlieb properties as evidence.  Corbett launched a website to attract attention to the neglect of Gottlieb properties.  Corbett also alleged undue influence by Neil over his grandmother and claimed that his grandmother had promised his 25% of the estate.  The Surrogate's Court held that Bender's actions did not rise to the level that would merit disqualification as executor, and that Corbett had no standing to dispute the Will.  Dier and Corbett appealed.

In May 2010, the Appellate Court upheld the Surrogate's Court, finding Neil Bender to be fit to serve as executor.  The ruling paved the way for a potential redevelopment of the properties.  Only time will tell the fate of these Manhattan properties and their tenants.

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