Published on:

Courts Discuss Bond Provisin in Estate Documents

On 4 February 2007, a resident of Nassau County died leaving a will dated 20 September 2006. She was survived by her two (2) children, a grandchild and two (2) minor grandchildren. Such will has been offered for probate by the nominated executor (decedent’s husband).

The will created a trust to be funded with the “exemption amount.” The trust shall terminate upon the death of the decedent’s husband who has a limited testamentary power of appointment over the trust principal. If or to the extent that the decedent’s husband failed to exercise the limited power of appointment, the remaining trust principal is payable to the decedent’s husband 1993 Insurance Trust. The residuary estate is then payable to the decedent’s husband. The decedent’s husband and the children are named under the will as trustee and successor trustees, respectively. Also, “no bond or other security shall be required of any Executor for the faithful performance of such person’s fiduciary duties in any capacity.” Thereafter, the attorney-draftsman submitted an affidavit and averred that he inadvertently used the word “Executor” instead of “fiduciary.” Apparently, the decedent’s prior will dated 2 April 1993, which contained one trust, dispensed with a bond in the case of any “fiduciary.”

In the instant case (estate litigation or estate administration) there is no will contest. However, the court is asked to dispense with the filing of a bond by the nominated trustee due to a purported scrivener’s error in the will.

The rules mandate that a testamentary trustee post a bond unless the will provides otherwise. The bond filed by the testamentary trustee shall be “in such amount as the court directs.” A testamentary trustee is required to file a bond where the will does not exempt the trustee from this requirement unless clear and convincing reasons are presented to dispense with the bond or to fix it at a reduced amount. Such clear and convincing reasons might be the consents or a showing that the filing of a bond is not economically feasible.” The court did not dispense with the filing of a bond by the trustee. The court reasoned that “a will is required to contain written directions as to a decedent’s intent and to be executed with certain formalities to avoid speculation with regard to the last wishes of the decedent”. A New York Probate Lawyer said that although the court noted that it had no doubt that the decedent trusted the proposed trustee since he did in fact nominate him, it concluded that it could only speculate as to whether the decedent would have dispensed with a bond if he had known the cost. Moreover, the court declined to dispense with the bond based upon the consent of the income beneficiary. The court reasoned that if the income beneficiary failed to live until the trust terminated, there would be no bond to protect the interests of his issue, who were either too young to give their consent or were not yet in existence.

NYC Probate Lawyers said the court ruled that reformation of a will may occur simultaneously with a will’s admission to probate where the provision in question clearly makes no sense as drafted and appears to be the result of a scrivener’s error. “Generally, extrinsic evidence may not be used to show that a provision was inadvertently omitted from a will, but [the court] should admit extrinsic evidence if there is an ambiguity on the face of the will.

Clearly, the bond provision is evident and does not appear on its face to be the obvious result of a scrivener’s error. Queens Probate Lawyers said that hence, the court has declined to reform the will. On the other hand, based upon the attorney-draftsman’s affidavit, clear and convincing reasons have been presented to dispense with the requirement of a bond by the trustee (upon submission of consents by the decedent’s children and their respective spouses, the grandchild of legal age and the trustee of the 1993 Insurance trust).

Do you know what a bond is and when it is required? At Stephen Bilkis & Associates, we explain everything to you. Know what you need to know when you need to know them. Our Nassau County Estate Lawyers are more than ready to answer your questions. Protect yourself. Know your options.

Contact Information